The State Bank of India (SBI) is looking to develop an automated system that will help minimise the operational costs of “no frills” or zero balance savings accounts.

These zero balance accounts, according to P.K. Malhotra, Deputy Managing Director (Operations) of the bank, has led to higher operational costs but has not resulted in an improvement in the CASA (current and savings account) ratio.

“The CASA is under pressure. We are opening a lot of free savings bank accounts as part of the financial inclusion plans but these have not resulted in improving the CASA. Operational costs have moved up,” he told newspersons on the sidelines of an annual IT conclave — Infocom — here on Thursday.

SBI’s CASA ratio has been under pressure during the fiscal. In the September quarter, CASA stood at 43.58 per cent against 44.95 per cent in the same quarter last fiscal (FY13).

Accounts, he said, opened through the business correspondent model stand at 34 per cent of the new savings accounts.


According to Malhotra, an automated technology platform is being mooted that will help reduce operational costs. The technology will be introduced as part of the financial inclusion drive.

Appropriate investments would also be made in technology. IT spends are expected to move up by around 10 per cent during the fiscal. Last year, it stood at Rs 900 crore for the bank.

Loan growth

Agri-credit, he said, was growing at 20 per cent. Gold loan as a portfolio too, witnessed a high 70 per cent growth.

“We have a gold loan portfolio of over Rs 30,000 crore and it is growing at 70 per cent. But, we are not pushing this product as we do not want to be recognised as a gold loan company,” Malhotra said.

(This article was published on December 5, 2013)
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