In order to lend a helping hand to the micro, small and medium enterprises (MSME) sector, which is under enormous stress, the State Bank of Hyderabad (SBH) has decided to slash the interest rates to the MSME sector across the board.
The reduction in the interest rate range from 100 basis points to 250 basis points across various slabs. Further, the bank has clubbed all the separate interest rate slabs below Rs 25 lakh into a single slab with a lower rate of interest.
In order to encourage the MSME borrowers to improve their financial strength, the bank has an internal rating system, wherein for credit facilities of Rs 25 lakh and above every MSME borrower is given a credit rating by the bank and the borrowers with higher credit rating are charged a lower rate of interest.
The revised rates of interest will become applicable from July 1, 2012.
The bank is also launching an MSE campaign commencing July 1, 2012, and extending up to August 31, 2012, wherein various incentives such as reduction in applicable interest rates and concession in processing charges are offered to micro enterprises, State Bank of Hyderabad said in a release on Friday.