Money & Banking

SBI is well placed to adjust to the challenges posed by Covid-19 pandemic, says Chairman

Our Bureau Mumbai | Updated on June 20, 2020 Published on June 20, 2020

Despite the economic headwinds, the State Bank of India (SBI) is well prepared to adjust to the challenges posed by the Covid-19 pandemic, according to Chairman Rajnish Kumar.

“FY21 will be challenging as the full impact of the Covid-19 outbreak will be felt in this financial year,” Kumar said in his message to shareholders in the Bank’s latest annual report. However, he emphasised that from the bank’s point of view, the true impact of Covid pandemic must also consider the behavioural impact on bank’s customers, composition of portfolio etc.

 

“For instance, likely job cuts and salary reductions will have relatively low level of stress on account of higher proportion of Govt/ Quasi-Govt sector customers (in SBI’s loan portfolio). As of now, only 21.8 per cent of the customers have availed the benefit of moratorium,”Kumar said

Furthermore, the bank was able to achieve 98 per cent branch operability as well as 91 per cent alternate channel operability during the period of lockdown, he added.

Managing disruptions

According to Kumar, an elaborate Business Continuity Plan (BCP) is in place to manage disruptions. Business continuity hub branches have been identified to cater to customers in case of emergency and BCP sites identified to support essential back-end services.

“The focus going forward is on cost rationalisation, rationalisation and re-skilling of workforce, improving staff productivity and redeployment of workforce from admin offices to sales roles,” said the SBI chief.

As per the report, SBI will use cash flow-based lending models for SME (small and medium enterprise) segment; leading to lower early delinquency. Further, advanced analytics based models for underwriting in the P (personal) segments and low value SME loans is also under consideration.

‘Big opportunity’

Kumar observed that “the pandemic has changed the preference of our customers. It is a big opportunity for us as there is now more acceptability to adopt digital channels for doing banking transactions.

“The bank will further scale up YONO and has set a target of doubling user registrations in the next six months and further strengthen platform through new product offerings like end-to-end home loans, pre-approved car loan and personal gold loans.”

Published on June 20, 2020
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.