A unique public-private partnership has launched an initiative designed to improve access to banking services, including letters of credit (L/Cs), for small- and medium-sized enterprises (SMEs) near the Indian capital of Delhi.

The initiative will initially operate in Gurgaon, a district identified as a major "cluster area" for SMEs. It will then be rolled out into other parts of India.

Public-private partnership

Operated by private sector Yes Bank and the state-owned Small Industries Development Bank of India (SIDBI), the initiative is known as "Yes SIDBI- expertise for SMEs".

It is the first initiative of its kind between a private and public bank. SIDBI already has similar tie-ups with two public sector banks - Bank of India and UCO bank.

One-stop shop

The alliance aims to be a one-stop shop providing a comprehensive range of financial products and services for SME customers. Yes Bank will combine its advisory services and technological assistance with SIDBI's SME initiatives.

According to CEO and managing director of Yes Bank, Rana Kapoor, the venture aims to improve conditions for SME customers who have had to face not only the problems of approaching different banks for different purposes, but also a lack of technological facilities and information on aspects of business.

Facilities

Chairman and managing director of SIDBI, N Subramanian, said the venture reflected SIDBI's vision of a "bank within a bank"', giving SME customers the option of accessing a wide range of financial products and services, all under one roof.

As well as L/Cs, facilities to be provided in the initiative include term loans, working capital, guarantees, foreign exchange, cash management, investment products, insurance, internet banking, ATM facilities, phone banking and advisory services.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.