State Bank of India shifts lending power to branch managers

State Bank of India is giving up its half-a-decade of centralised loan processing.

The lender has given back the loan sanctioning power to branch managers in semi-urban and rural centres.

Loan sanctioning capacity of branch managers varies depending upon their seniority. For high-value loans, which are beyond the power of a branch manager, the bank is setting up processing cells at regional offices under the supervision of senior managers.

"The transition is expected to be over in the next two months," an SBI official said.

The country's largest bank said it will close down all rural central processing units by March. It has 326 units in all and the employees in these centres are being relocated. The bank said no employee will be asked to leave.

"This will save time and cost, especially for crop loan delivery," said SBI Chairman Pratip Chaudhuri.

told ET. Incidentally, that was the stated objective of the bank when it had built all these units alf-a-decade ago.

"These units were not yielding the desired results," another senior SBI official said. "The idea was to reduce delivery time which did not really happen. The move is also expected to control nonperforming assets."

SBI's gross NPA rose to 5.15% as on September from 4.19% a year ago, while its net NPA rose to 2.44% from 2.04%, with significant contribution from the farm and SME sectors . The Reserve Bank in its financial stability report released on December 28 said that bad debt from lending to the farmers may rise from 5.2% in September 2012 to 5.8% by March 2013, the highest among all sectors.

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