We lend for projects and perseverance, not for securities, says Andhra Bank CMD

Hyderabad, Feb 5 (KNN)  Chairman and Managing Director of Andhra Bank, CVR Rajendran, has called upon the small and medium entrepreneurs to come up with zealous commitment on their projects, before seeking lending from the bank.

Addressing entrepreneurs during an interactive session convened by Federation of Small and Medium Enterprises, Andhra Pradesh (FSME-AP), here on Tuesday, Rajendran who was chief guest on the occasion explained the bankers’ perspective of lending. 

“We, representing the Andhra Bank, are lenders, and not conventional money- lenders, who lend money against pledging.  We lend for a project, we lend while understanding the social importance of every offering,” he said.

According to him, it is the faith and commitment of the promoter that propels them to come to terms with the entrepreneurs, and not the securities they pledge.

“If the promoter is good, there is no need for documents; if he is bad, there is no use of mere documents, which remain as bundles in our premises,” he said.

Drawing attention to the alarming situation for both for bankers and entrepreneurs, he said the echelons of Andhra Bank, similar to their counterparts in other banks, are under tremendous pressure.

“Andhra Bank is still bleeding with gross non-performing asset (NPA) ratio which has risen sharply in the previous 18 months to 6 per cent and our total restructured standard advances have been high at 13 per cent of total advances,” he said.

Further, commenting on the bank’s health, he said they were not doing well this year due to increase in non-performing assets in the power and infrastructure sector. However, the bank continues to sail with SMEs, as their area of passion is MSME, he asserted.

Offering his comments, Advisor, FSME and former Secretary General, FAPCCI, M V Rajeshwara Rao requested for the extension of moratorium on loan repayments.

“It should be extended for two years, in view of the slowdown phase which will change to growth phase in this period. Banks should clearly spell out their restructuring norms with clear time frames and ensure that these are available at all level of branches,” he said.

Meanwhile, former president of FISME, V B Sankar, urged the CMD of Andhra Bank to consider giving working capital term loans for the units having standing track record of 5 – 10 years at base PLR with repayment schedule of 36 months so that they can infuse capital for smooth working of the unit.

In his power point presentation, Vice Chairman, Institute of Indian Foundrymen, Southern Region, C Chandra Mouli, explained the plight of Indian foundry industry, particularly the AP scenario.

President, FSME-AP, APK Reddy in his welcoming address explained the ‘mission objective’ of federation.  According to him, FSME has been assisting SMEs in Andhra Pradesh in building capabilities to respond to changing external environment and also to exploit new opportunities by becoming market centric. Gopal proposed vote of thanks.