Public sector, Union Bank of India (UBI) that has recently announced a slew of measures to support the micro, small and medium enterprises (MSME) has decided to hire about 5,000 employees out of which 300 specialist officers will be focused on MSMEs.
Also the bank has decided to open 400 new branches by the end of current fiscal. With a view to increase focus on the MSME sector, the bank will start 175 specialized branches including 75 branches exclusively for the small and medium enterprises. 27 of the specialized branches of the bank would come up in South India alone. They will be opened in Tamil Nadu, Andhra Pradesh, Kerala and Karnataka.
UBI field general manager north zone A K Bansal said, "They are meant for customers in this segment with limits up to Rs 35 crore or having a turnover less than Rs 1,000 crore."
The bank has also aimed to grow its advances to the MSME segment by 30%. These advances stood at Rs 13,884 crore on September 2008. Presently the bank has about 16% of its total advances directed towards the MSME sector and it targets to take them to 20%. "The bank's endeavour will be to increase this share of MSME advances to 20 percent of its total advances by the year 2012," said Bansal.
UBI has entered into a tie-up with Small Industries Development Bank of India (SIDBI) for identifying and financing working capital component of MSMEs where term finance has been extended by SIDBI. The bank has also singed an MoU with Credit Guarantee Trust for Micro and Small Enterprises to extend credit up to Rs 100 lakh without seeking a collateral.
The hiring process of the bank is going to start in 2009.