Public sector lender Indian Overseas Bank is aiming towards setting up 40 small and medium enterprises (SME) cluster branches in different parts of the country in this fiscal.

Speaking on the plan, CMD of the bank, Mr M Narendra said, "The micro, mini and small enterprise (MSME) sector is one of the focus areas for us. We have applied for licence from the Reserve Bank of India to open SME cluster branches across the country."

Seeing the need for emergency working capital by SMEs, the bank is also planning to set up a scheme catering to this called 'SME Instant Cash'.

The lender is also eyeing for lending to the mid corporate segment. "There is huge credit appetite among the mid-corporates particularly in tier II and tier III locations,'' said Mr Narendra.

"Though there are some concerns on asset quality in some sectors in the banking industry, as a whole, the credit growth potential still looks positive," Mr Narendra said.