In a bid to boost the Indian SME sector, HSBC India has initiated a business banking unit in New Delhi, which will cater to SMEs that have a minimum turnover of US$1 million.

In this context, Onil Chandna, owner of KS Chandna and Co. a mid-sized financial consulting firm in New Delhi, said, “There are several banks which offer loans at competitive interest rates to SMEs. If HSBC India offers better interest rates on loans, it would definitely help SMEs in business growth and consequently in profit accumulation. Since SMEs can already approach to several other banks for credit, HSBC India should ideally seek to offer products which offer more than the existing ones.”

Besides offering services such as international banking, HSBC India will also seek to offer the SME sector an all-inclusive set of working capital products. This development is expected to facilitate international trade for numerous export-based SMEs in the country.

However, Satish Jain, owner of Swastic Drilling Company Ltd, a small-sized unit in New Delhi which manufactures and exports drilling machines, said, “HSBC being a reputed MNC bank, it would be good to see what new they have to offer, where most other banks fail in delivering.”

Significantly, HSBC India is also planning to constitute similar business centres in Chennai and Bengaluru. Earlier in 2008, HSBC India had launched a special product for SMEs named HSBC Direct, which sought to boost the SME sector in the country.