Staying ahead of curve to reinforce Prime position: SBI chairman Khara
Mindful of the changing landscape in Indian banking after the HDFC-HDFC Bank merger, the country’s largest bank, State Bank of India, has begun to take steps to stay entrenched in the “prima donna” position in a highly competitive market.
SBI Chairman Dinesh Kumar Khara said, “We very closely look at this and see to it that we stay ahead of the curve and there is no challenge for us.” The network branch expansion and ramping up digital platforms and services are key planks for managing competition.
The July-September 2023 was the first quarter when HDFC-HDFC Bank did business as a combined entity, escalating competition for loans as well as deposits.
SBI loans stood at Rs 34.11 trillion and deposits were at Rs 46.89 trillion as of September 30, 2023. HDFC Bank’s loan book was at Rs 23.54 trillion and deposits stood at Rs 21.72 trillion at the end of September 2023.
Besides revamping the digital banking platform YONO, SBI is opening 600 branches over the current and next financial year. The bank has already identified potential areas to set up branches. The fully re-hauled YONO is to get rolled out in 9-12 months.
“We already have 22,400 branches and 79,000 CSCs. So when it comes to footprints, I think this is a decent number which we have on the ground,” Khara said at a media interaction after announcing results for Q2 FY24. HDFC Bank has 7,945 branches and 15,352 Business Correspondents centres, which are primarily managed by Common Service Centres (CSCs).
“The mergers will continue to happen, but we keep on reading the situation and ensure that we stay ahead,” Khara said.
The emerging competition is tough. Shashidhar Jagdishan, Managing Director and Chief Executive of HDFC Bank, in an analyst concall for Q2 FY24 results said, “The bank will have the energy to continue to grow at a pace that we have done in the past even on such a larger book.”
About 67 per cent of SBI’s network is in semi-urban and rural spaces. “Actually, they (Private sector peers) are trying to ape what we have already done,” Khara said, referring to private banks making inroads into semi-urban and rural areas.
Along with a network on the ground, skilled and experienced talent is equally crucial for managing competition. “It is not that we only have to chase them. It is not that brighter minds are only theirs,” Khara asserted.
Perhaps he has a point. A top-notch digital banking expert, Nitin Chugh, is currently head of digital banking and transformation at SBI. Incidentally, Chugh worked at HDFC Bank for over 18 years from 2001 to mid-2019 in the retail banking space. He was the group head of digital banking, where he oversaw digital transformation at the country’s largest private bank from 2013-2019.
Later he moved to Ujjivan Small Finance Bank to take the mantle of MD&CEO, where he worked for 22 months and joined SBI in 2022.