Market correction may drive deposit growth for banks: SBI MD Tewari

Correction in the equity markets could help banks regain deposits, State Bank of India’s managing director Ashwini Kumar Tewari said on Wednesday, while asserting that banks are also driving innovation in order to raise deposits.

“As the market [equity] corrects over some time, everything (deposit growth) will ultimately correct. I think some of the money which used to be with us (banks) will also come back,” he said on the sidelines of the Global Fintech Fest on Wednesday.

He said that there are several segments that SBI is focusing on, to garner resources.

“Sectors which we are focusing on are trusts, societies, and hospitals, and other segments. Then there is this entire base of the pyramid segment which possibly apart from Jan Dhan we haven't really focused on,” he said.

Bank deposit growth has been lagging credit expansion for nearly two years, a pattern also observed by the SBI.

Tewari said that the deposit and credit gap is expected to correct next year as per the SBI’s research.

“This (credit deposit gap) has persisted for the last two years. Our house view is that it has happened earlier also a number of times…It will correct sometime next year,” he said.

He said that the bank is focusing on small ticket deposits and actively going out to the market to attract them. Previously, the efforts to garner deposits were more digital, but now the bank has outbound teams specifically for liability marketing, in addition to the asset teams to drive the deposit growth.  

“Small ticket deposits can be of some use for us. I think the Finance Minister has also said on record that we have to actually go out in the market (to raise deposits); it is no longer enough for us to try to get it digitally… so we have to go out and actually seek deposits which we are doing. We now have outbound teams for liabilities, earlier we used to have assets teams, now we also have liability marketing teams,” he added.

In the monetary policy statement earlier this month, RBI governor Shaktikanta Das said that banks should focus more on mobilisation of household financial savings through innovative products and by leveraging fully on their vast branch network.