Oriental Bank of Commerce Lowers Rate of Interest for MSME’s

The Oriental Bank of Commerce has lowered down its rate of interest for MSME’s which have a good CIBIL MSME Rank aiming to benefit more than 11 Lakh MSME's in India.

Oriental Bank of Commerce has offered up to 0.25% concession on interest rates for CMR1 TO CMR3 MSME’s with an internal risk rating of OBC1 to OBC3. The risk of Non-Performing Asset (NPA) increases with the increase in CIBIL MSME Rank (CMR).

oriental bank of commerce

The Micro, Small and Medium Enterprise (MSME) form a major part of the Indian Economy and is a profitable sector for the credit industry. There are potential chances of its growth and healthy returns in the future as well.

Mr. Mukesh Kumar Jain, The Managing Director and Chief Executive Officer of Oriental Bank of Commerce believes that reducing the interest rates on MSME Loans will reward good borrowers and promote a credit culture which is disciplined making a good MSME portfolio for the Bank. 

Oriental Bank of Commerce is a public sector bank which is committed to offer financial aids to people in the form of low-risk loans and with the MSME Sector, this step has come as a good news for all the deserving enterprises.

CIBIL MSME Rank (CMR) helps banks and other loan lending institutions to create a standard for risk management process and offer risk-based prices for loans.  

CMR creates a ranking system for MSME’s based on its credit history on a scale of 1 to 10, where CMR 10 is the riskiest rank and CMR1 the most profitable one. It makes the facility of availing credit cheaper for MSME’s with a good CIBIL Rank.

CMR uses smart algorithms with machine learning which can easily predict the probability of MSME becoming a Non-Performing Asset. In the MSME segment, the Net Interest Margin (NIM) ranges from 4% to 7% and depends on the risk associated with the applicant and type of loan being applied.

To all this, there is a healthy Rate of Return which is estimated to be at 2% to 5% which is why the reduction in interest rates aims to benefit more than 11Lakh MSME’s.