Union Bank may reschedule some small and medium industry loans

12 December 2008

Union Bank has taken a series of measures to help the micro, small and medium enterprises (MSMEs) facing liquidity crisis, including rescheduling of loans, on a case by case basis, top sources at the bank said.

''The global turmoil has affected the MSME sector and the bank wants to reduce the severity of the pain,'' said M V Nair, chairman and managing director.

He, however, said while the slowdown in economy has affected the sector most, it has not resulted in higher NPA levels for the bank, which worked out to 1.24 per cent as of September 2008.

Although the possibility of higher NPAs cannot be ruled out as the scenario unfolds, he said the bank has taken a proactive approach to the issue.

Union Bank will offer ad hoc advances and offer extended stock holding period as also reschedule loans on a case by case basis to ease liquidity problem in the sector, he said.

Also, the bank, he said, will extend the period of credit on bill purchases and reduce margin payments wherever warranted.