Banks look to corporate segment to fuel personal loan growth

Banks are looking to increase their unsecured loans portfolio by providing personal loans to corporate sector. The banks are going cautious by checking the credit history of the borrowers, but are also lending to first time borrowers. In case of first time borrowers, the bank makes a more stringent checks.

The banks have also limited the principal amount to first time customers. Corporate customers can however benefit if their company has a tie-up with the lender, since banks allow advances to such customers even if they do not have a credit history. Also such clients get a quick appraisal and sanctioning within an hour. However the banks do not take into consideration any other debt which the customer has with any other bank.

HDFC Bank's Priority Pass is one such product for the corporate clients, setting up terminals outside their offices, where the application is received and processed at the branch office, and once the loan is approved, the amount can be disbursed within 48 hours. To attract more customers, the banks are also waiving off processing fees, which has resulted in higher queries for personal loans.