SBI targeting unbanked in expansion plans, says chairman Sreenivasulu Setty

In the face of intense competition for deposits, State Bank of India Chairman Challa Sreenivasulu Setty has announced a focus on the country's unbanked population. In a Bloomberg Radio interview, Setty explained that India’s largest bank has made substantial investments in digitalization and technology in recent years, enabling it to acquire new customers at a "much lower cost." That’s also enabled the lender to boost its operational efficiency and productivity, he noted.

The newly appointed SBI chairman noted that many banking needs remain unmet in India, and the investment in technology and digitalization has enabled the bank to effectively reach the bottom of the pyramid at a significantly lower cost.

As it aims to increase deposits, the bank is also planning to open branches in locations where it currently has no presence, according to Setty. He mentioned that a mobile application is facilitating the addition of 50,000 to 60,000 new savings accounts each day. Setty said the physical presence is very much important in terms of deposit mobilisation.

As per reports, India's leading banks are facing pressure due to tighter liquidity and slower deposit growth compared to credit expansion. The Reserve Bank of India has raised concerns that an increasing credit-deposit ratio and substantial portfolios of unsecured retail loans could threaten the stability of the financial system.

According to Setty, the SBI is investing in wealth-management technology to enhance its appeal to India's affluent clientele. This puts SBI in competition with global banks like HSBC Holdings Plc, Barclays Plc, and Standard Chartered Plc as they vie for a slice of India's growing wealth.

A recent report from the Boston Consulting Group noted that India generated approximately $590 billion in new wealth in 2023, marking the largest increase in its history.

SBI has engaged about 2,000 relationship managers and intends to develop and distribute wealth-management products through its broad network.