 "Challa Sreenivasulu Setty, Challa Sreenivasulu")
Mumbai: SBI Chairman Challa Sreenivasulu Setty during the ‘Global Fintech Fest’, in Mumbai, Friday, Aug. 30, 2024. (Photo: PTI)
The competition for deposits amongst banks is likely to continue for some time, and banks, instead of getting into a rate war to mobilise incremental deposits, would focus more on improving the quality of their services, said CS Setty, chairman, State Bank of India (SBI).
Nevertheless, there will be some tweaking in the interest rates in the 1-2-year bucket, which is the most popular bucket, Setty said, speaking at the Global Fintech Fest. “Most of the banks… we are not getting into a rate war. We want to attract customers by way of improved service quality, improved access. Everybody is looking at how do we get value out of the existing customers, and also attract new customers by offering better quality services,” Setty said.
Meanwhile, SBI has launched a new variant of retail term deposit scheme ‘Amrit Vrishti’ for a 444-day tenor, offering 7.25 per cent to customers.
Setty also highlighted that there is a change in asset allocation among customers as some amount of investible surplus is going to other asset classes. Additionally, the increased credit growth and the diversion of savings to other asset classes is putting pressure on the deposit growth of the banks, he said.
The banking sector has seen sluggish growth in deposits for some time, and credit growth has been outpacing deposit growth, heightening concerns about banks’ liquidity management. Amid this, the Reserve Bank of India (RBI) governor has instructed banks to offer ‘innovative products and services’ and effectively use their branch networks to attract household savings as deposits.
Setty said SBI is comfortable with its credit-deposit (CD) ratio and is not under any pressure to bring it down. “We have robust credit growth; we are anticipating a credit growth of 14-16 per cent. Deposits, even if we have 8-10 per cent growth because of a large base, in absolute numbers it will be more than the absolute amount of credit,” Setty added.
Speaking on the revival of private capital expenditure in the economy, Setty said the brownfield expansion is being met by the corporates with their own cash, which they have accumulated over a period of time. Once they consume that, the credit drawdowns will start.
“We have the sanctioned, approved, and under-disbursement loans of about Rs 4 trillion. If this is an indication of capital expenditure, then it is a robust indication,” he said.
YONO 2.0
Setty underscored that SBI is undertaking a deeper technological transformation with YONO 2.0. The state-owned lender is not just tweaking the journey of YONO 1.0 and calling it 2.0.
“YONO 1.0 is robust, but what we are looking at is a complete transformation of the app. The app is about 5-6 years old. While the design elements will remain, we are focusing more on the stability, scalability, and robustness of the applications, which entails deeper technology transformation,” Setty said, adding that SBI would like to create an omnichannel experience with YONO 2.0.
SBI would launch YONO 2.0 in November in a closed user group, he said. YONO currently has 80 million registered users. Almost 10 million users log in each day.
Additionally, Setty highlighted that SBI is on a digital transformation journey. “We are focusing more on technology and technological resilience, which requires you to invest in data architecture, revisit your infrastructure, network,” he said.
First Published: Aug 30 2024 | 5:57 PM IST