Business Mantra News
- SBI has started to grant loans to small business and SME units based on their cash flows instead of their Balance Sheet Analysis.
- Bank Accounts of the units shall play vital part in the sanction of Loans.
- Even based on Bank Account turnover, the medium enterprises shall also be getting loans from banks.
- Bank Account Statements for the last one year is the basis for analysing collectively with the Balance Sheets.
- The earning capacity of the units shall be considered to be on the turnover in the Bank Account.
- State Run Banks have been reeling under pressure because of high level of NPAs, so SBI has taken this initiative to assess borrowers differently.
- Now the focus of the Bank shall be on cash generation rather than Asset Creation. No doubt asset must be created out of the Bank Loan, yet cash generation shall also be the criteria for repayment of loans.
- AS SBI sets the example for other lenders in the country shall also be looking for cash flow based funding to the borrowers.