 "Staying ahead of curve to reinforce Prime position: SBI chairman Khara")
Mindful of the changing landscape in Indian banking after the HDFC-HDFC Bank merger, the country’s largest bank, State Bank of India (SBI), has begun to take steps to stay entrenched in leadership position in a competitive market.
SBI Chairman Dinesh Kumar Khara said “we closely look at this and (we will) see to it that we stay ahead of the curve and there is no challenge for us”.
Branch expansion and ramping up the digital platform and services are key planks in managing competition.
July-September 2023 was the first quarter when HDFC-HDFC Bank did business as a combined entity, escalating competition for loans as well as deposits.
SBI loans stood at Rs 34.11 trillion and deposits were at Rs 46.89 trillion as of September 30, 2023.
HDFC Bank’s loans were at Rs 23.54 trillion and deposits at Rs 21.72 trillion at the end of September 2023.
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Besides revamping YONO, the digital-banking platform, SBI is opening 600 branches over this financial year and the next. The bank has identified areas for this. The fully re-hauled YONO will be rolled out in 9-12 months.
“We have 22,400 branches and 79,000 Common Service Centres (CSCs). So when it comes to footprint, I think this is a decent number which we have on the ground,” Khara at a media interaction after announcing the results for Q2FY24.
HDFC Bank has 7,945 branches and 15,352 business correspondent centres, which are primarily managed by CSCs.
“Mergers will continue to happen but (we) keep on reading the situation and ensure that we stay ahead,” Khara said.
The emerging competition is tough. Shashidhar Jagdishan, managing director (MD) and chief executive, HDFC Bank, in an analyst concall for the Q2FY24 results, said the bank would have the energy to continue to grow at a pace that “we have done in the past even on such a larger book”.
About 67 per cent of SBI’s network is in the semi-urban and rural space. “They (private sector peers) are trying to ape what we have already done,” Khara said, referring to private banks making inroads into semi-urban and rural areas.
Along with the network, skilled and experienced talent is crucial for managing competition.
“It is not that we only have to chase them. It is not that bright minds are theirs only,” Khara asserted.
It is important to mention here that digital-banking expert Nitin Chugh, who was at HDFC Bank, is head of digital banking and transformation at SBI. He worked at HDFC Bank for over 18 years from 2001 to mid-2019 in retail banking. He was group head of digital banking, in which he oversaw digital transformation at the country’s largest private bank from 2013 to 2019.
Later he moved to Ujjivan Small Finance Bank to take on the mantle of MD and chief executive officer and worked there for 22 months before joining SBI last year.