Every chairman of the State Bank of India (SBI), the largest bank in the country , has contributed to the growth and stability of the bank. The current chairman Rajnish Kumar who took the baton from Arundhati Bhattacharya in October 2017, has also grown the bank and is steadying the ship in a most challenging time for the banking industry to set the foundation for future growth.
Kumar, who is the twenty-fifth chairman of the SBI, will retire in October. He has set specific priorities for the bank in the coming years in the fast-changing banking landscape. Kumar has spelled out the strategy in the recently released annual report. Here are the key focus areas:
Improving market share in the five metros
The entry of new generation private banks in the mid-90s and the subsequent expansion of these banks in the retail banking saw public sector banks losing market share. While SBI is quite big in home loans and deposit mobilisation, it has to improve its market share in many key areas in top five metros — Delhi NCR, Kolkata, Chennai, Bengaluru and Hyderabad.
Follow fintech model of cashflow-based SME lending
The banks have historically lent to SMEs based on past financial performance and the hard numbers for three to five years. But the shift is happening with the start-ups and new enterprises generating good cashflows within few years of starting their operations. SBI is now readying with advanced analytics by using GST network data and other inputs like POS volumes for underwriting small loans.
Partnerships with NBFCs for co-lending
The bank is in discussion with dozens of new age NBFCs, fintechs and traditional NBFCs for co-lending. Over half a dozen NBFCs have already been onboarded where the bank is lending based on the lead generated by these new players. The bank is also digitising the entire process where the loan leads would flow directly from an NBFC platform to the bank with very little human intervention.
Supply chain financing
The bank has always been active in the supply chain financing but there is now a focussed approach to reach out to more players in the supply chain ecosystem. In the just concluded financial year, the bank has signed new partners like Bosch, Hero Electric, OPPO Mobile and Dabur etc. The bank has also worked on the risk-based pricing under supply chain financing.
Cost and productivity
Two and a half years ago, the bank had merged five of its associate banks with itself, which brought in additional people and the branches. Since digitisation is reducing reliance on people and the branch channels, the bank is focussing on rationalisation and reskilling of workforce, improving employee productivity and redeployment of workforce from admin to sales roles.