Comments
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.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.