Consumer loans have come a long way. To such an extent that they've almost become a way of life. And the credit for this phenomenon is due in large part to foreign banks as it is they who've managed to shake the mindset of the public sector banks. Some of these public sector banks have reacted, and positively enough.

Among those trying their best to strengthen and popularise their consumer loan portfolios are State Bank of India, Canara Bank, Uco Bank, Syndicate Bank and Allahabad Bank. On offer are both the old and the new. The new is in news-and the old's in news, too, this time in better shape though.

Of the lot, SBI's in the best form. It's a place where things are moving towards a much stronger tomorrow, in terms of loan products and services. And one can safely say that SBI is using a clever combination of matter and packaging. Although the bank has kept it low in terms of publicity drive, plans are under way.

Ashok Kini, general manager (personal banking), SBI, says 100 specialised branches for consumer banking will be opened in another six months. And that will be in addition to the consumer banking already being offered by SBI branches across the country.

Around 25 consumer loan products are already in operation at SBI, and many more are on the way. The strengthening of the consumer loan business by SBI is much more than it appears because it's likely to influence the banking sector on the whole, says an official at another public sector bank.

Explaining the modus operandi, Kini says the exclusive consumer banking branches will also act as the nodal centres for the SBI credit cards, once they're launched. Hoping to give a tough run to the foreign and private sector banks, SBI is keeping its focus well-trained on customers of all kinds and of all social and economic strata.

There are certain grey areas, of course, about which senior officials would rather not talk. For instance, loan disbursing officials at many of the SBI branches are unable to communicate to the consumer at one go all that is required by the bank to grant a loan. As a result, the consumer is forced to make multiple trips to the bank to fulfill the loan formalities, making it a frustrating experience.

Probably realising the deficiencies in the ongoing system, the bank is planning exclusive branches with more communicative staff.

To the other hurdles, too, SBI has the answers. For instance, guarantors are mandatory for big SBI loans, a condition that may put off many potential customers. Kini says: ``Each bank determines its lending criteria and SBI has decided that guarantors are mandatory.'' Point taken. ``You have to give something to get something,'' is how Kini explains the price for cheaper loans at SBI.

The price is not too steep for a bank that has been disbursing loans for things, both big and small-from lending Indian Airlines the sum required for a Boeing aircraft to a farmer for a bicycle. After all, the bank's journey has been pretty long-spanning almost two centuries and changing in status from Presidency Bank to Imperial Bank to State Bank of India.

Apart from SBI, other banks such as Canara Bank and Syndicate Bank are also focussing on the consumer loan business. But they're more inclined towards publicity than value-addition. Officials at several branches of both these banks admit that there's a conscious attempt to popularise the consumer loan products. Eager to have customers borrowing for a purpose, they're marketing their products, but the drive is missing. They're publicising their lower interest rates, but officials in charge of consumer loans may be hard to trace.

Among the others in the mart, Allahabad Bank is quite visible on the consumer loan scene. The bank, for instance, has devised a consumer finance scheme for full-time permanent employees of its corporate clients. The bank elaborates that the loan scheme is for the purpose of buying any consumer durable. If you are eligible for a loan, you just have to pay 15 per cent of the price of the product, and the installments are deducted from your salary.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.