The State Bank of India's newly appointed chairman said he's targeting the country's unbanked population as it seeks to expand amid intense competition for deposits.
India's largest bank has made significant investments in digitalization and technology over the past few years, helping it amass new customers at a “much lower cost,” Challa Sreenivasulu Setty said in an interview on Bloomberg Radio. That's also enabled the lender to boost its operational efficiency and productivity, he said.
“We would like to leverage that technology and digitalization to reach the under-served across the country,” he said. “There are lot of banking needs which are unmet in India. This investment in technology and digitalization has helped us to reach the bottom of the pyramid in a much lower cost.”
(Photo Source: Bloomberg/Kanishka Sonthalia)
As it seeks to build out deposits, the bank is also planning to add branches in areas where it has no presence, according to Setty. A mobile application is helping it add 50,000 to 60,000 savings accounts per day, he said.
“The physical presence is very much important in terms of deposit mobilization,” Setty said.
India's top lenders are getting squeezed as they grapple with tighter liquidity and deposit growth that's lagging behind credit expansion. The Reserve Bank of India has expressed concern that a growing credit-deposit ratio and large portfolios of unsecured retail loans pose risks to the financial system.
The State Bank of India is also investing in wealth-management technology to help boost its share of India's affluent customers, according to Setty. That's pitting it against global banks such as HSBC Holdings Plc, Barclays Plc and Standard Chartered Plc in trying to grab a share of India's rising wealth. The country generated about $590 billion in new wealth in 2023, its largest increase in history, according to a recent report from the Boston Consulting Group.
SBI deployed about 2,000 relationship managers and planned to manufacture and distribute the product through its vast network.
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