New Delhi, Oct 11 (KNN) Adding to the processing cost and leading to delays in sanction of loans to small industrial units, the State Bank of India is insisting on double legal verification of the collaterals and double check on the valuation of the same, SMEs have complained.

According to the stipulations of the SBI, circulated to the branches, “the borrower is required to file TIR (Title Investigation Reports) from two different advocates and valuation reports from two different valuers empaneled with the State Bank of India.”

However, the move has not gone down well with the industry.

“The insistence on TIR from two different advocates and valuation reports will put additional cost on us and result in delay in sanction and disbursement of loans, as it’s a pre-disbursal condition,” said Managing Director of Chakradhar Chemicals Pvt Ltd, Neeraj Kedia from Muzaffarnagar.

“For the first time such a provision has been included by the SBI.  As a client, we are ready to share the cost of one valuation, that too of the choice of the banks. The second cost should be borne by the bank,” Kedia added.

Despite several attempts the email questionnaire to the State Bank of India remained unanswered.

MSMEs believe that the move will only make the process lengthier and more complicated.

“From a banker’s point of view, I feel there is no point in getting the re-verification done,” said Financial Advisor to the Federation of small and medium and micro enterprises (FISME) Rajesh Dubey.

It will only lead to doubling of the processing charges for sanction and disbursal of loans, he added.

As the first check is done by the valuers empanelled with the SBI itself, some of the MSMEs even said that, “SBI is doubtful about its own internal checks.” (KNN/SD)