SBI to tap e-commerce, digital space

Planning to increase SME portfolio growth to 10-12%

State Bank of India (SBI) is planning to tap the potential of e-commerce business and focus on digital platform in the near future, said B Sriram, managing director (National Banking Group), SBI. The Bank is also looking at increasing its growth in Small and Medium Enterprises (SMEs) portfolio to 10 to 12 per cent by the end of the year.
The Bank, which already entered into agreement with some of the e-commerce players, would look at covering the entire e-commerce value chain, he said while speaking to the reporters after inaugurating the SBI HNI Branch in Ashok Nagar, the 1,000 branch of the bank in Chennai circle.

Besides the payments business from these firms, which is part of its debit and credit card initiatives, the bank would also like to address the vendors who supply to the e-commerce space, to finance them in all e-commerce platform and also to offer personal loan to the customer for their purchase from these platforms.
"Even the e-commerce player, we can do remittance, we can do their funding, we can do their warehousing financing, a lot of things of the Amazon and Snapdeal we can do. The whole value chain will be on digital space," he said.
"It (e-commerce) is a big business. We have just started, but the e-commerce economy is growing. We will have to wait and see how much it will grow," he added.

In the next one or two years, the bank's plan is to go in a very big digital platform, a journey which was started last year with the touch branch as the first initiative.

"We will define our processes digitally. Lot of products we are now giving like loan against shares, loan against Fixed Deposits and all are on the digital platform. We would like to put more and more products on that," added Mr. Sriram.
During the year, the focus would also be in maintaining the current account, savings account (CASA) and engaging with the corporates for corporate salaries and other products, apart from the growth in retail, agriculture and SME products.

The Bank has been putting in a system in the last one year, which is now implemented across the country, to bring in growth on the SME portfolio. The growth in this portfolio is muted for a marginal two or three per cent growth in the recent past and in the first quarter of this fiscal year, it was just at one per cent growth.
SBI has introduced a system in which relationship managers were appointed for the SMEs to identify potential customers from the public domain, track them by finding good leads through due diligence and convert those leads into business, with the help of digitization. The due diligence is also strengthened including a scrutiny by experts within 48 hours after the loan has been sanctioned, to make the sanctions and processing in the low value SMEs to space much stronger, he said.

It is also trying to push risk mitigated products, such as the Electronic Dealer Financing Scheme (EDFS) in a big way. The EDFS product, which was Rs 3000-3,500 crore three years ago, currently crossed Rs 10,000 crore and hardly any New Pension Scheme (NPS) there, said Mr. Sriram.