No concerns on asset quality front in foreseeable future, says SBI chairman

On creating a new position as an assistant general manager (deposit) for every branch, Dinesh Khara said that the Indian economy is evolving, and in order to grow, we need to generate more income

Dinesh Khara, chairman of State Bank of India (SBI), said that the SBI is more aggressive in providing for any stress on the balance sheet and, hence, sees no concern for the asset quality in the foreseeable future.

Talking to Business Standard's consulting editor, Tamal Bandyopadhyay, at the Business Standard BFSI Insight Summit 2023 in Mumbai, Khara said, "We see no concerns on asset quality front in foreseeable future."

On creating a new position as an assistant general manager (deposit) for every branch, he said that the Indian economy is evolving, and in order to grow, we need to generate more income. "So, in order to promote the idea of having an appreciation for the customer's preference for the asset class, and guiding them appropriately in terms of where they should look for the appropriate asset class, this particular position was created," he said.

 

He said, "We have around 22,500 branches, and over 500 regional offices to serve our varied customer base. We ensure that we showcase the right products to our customers."

On mobilising deposits, he said, "Mobilising deposit is not a challenge, one can raise deposit, but at what price the deposits are getting raised is very important. This will eventually decide the trajectory in terms of lending."

On having a grand portfolio, Khara said, "Our domestic credit deposit ratio is around 64-65 per cent, and internationally, it is 72 per cent. Our balance sheet is about Rs 60 trillion."

On deploying technology for wider customer reach, Khara said, "On the technology font, it is important to upgrade and evolve to meet new expectations. We need to invest in technology as we represent 20 per cent of the Indian economy.'

He said that the SBI is serving close to 480 million customers. "Around 84 per cent of our transactions are through digital channels, and around 97 per cent of the transactions happen outside the branch."

He said that the SBI is making continuous efforts to upgrade the technological standpoint. "Our ambition is to create a digital bank within the bank. We will bring YONO 2.0 in 8-9 months to step up our consumer capacity, and create a modular structure to offer the best products to our customers. Around 10 million customers are logging into YONO everyday," he added.

On enhancing customer services, Khara said the bank started evaluating the branches on net promoter score and it created competition in the minds of employees to improve their net promoter score.

He said, "We continue to have the highest CASA [current account and savings account] even today. I am also mindful that we have to really fight to ensure that our market chair in CASA is maintained or even improved. So, we are evolving our strategies to meet these requirements of the customer and also of the bank."

He said that the SBI's provision coverage ratio is 92-93 per cent, and at the corporate level, it is 96-97 per cent. "Our gross NPA is 0.70 per cent," he said.

On retail, he said that one should have an elaborate structure regarding sourcing, underwriting, control and follow, and an effective recovery mechanism. He added that one has to be mindful of the credit score and how the account is conducted, as this is a recipe for ensuring retail quality.