SBI's New Chairman C S Setty Aims to Target Unbanked Population in Expansion Strategy

SBI's New Chairman C S Setty Aims to Target Unbanked Population in Expansion Strategy

The newly appointed chairman of the State Bank of India C S Setty has announced an ambitious strategy focused on reaching India's unbanked population as the bank aims to expand its operations amidst growing competition for deposits. In an interview with Bloomberg Radio Setty highlighted the significant investments SBI has made in digitalisation and technology in recent years. These advancements have enabled the bank to attract new customers at a considerably lower cost while also enhancing its operational efficiency and productivity.

Setty expressed a strong commitment to leveraging these technological advancements to serve the underbanked segments of the population stating that there remains a substantial demand for banking services that are currently unmet across the country. He noted that the investments in technology and digitalisation have allowed SBI to effectively reach the bottom of the economic pyramid more affordably.

To further bolster its deposit base SBI plans to open new branches in regions where it currently lacks a presence. The bank is also utilizing its mobile application to onboard between 50,000 to 60,000 new savings accounts each day indicating a robust digital strategy. Setty emphasized the importance of physical presence in mobilizing deposits stating that having a local branch network remains vital.

As the competitive landscape intensifies India's leading banks are facing challenges due to tighter liquidity and slower deposit growth compared to credit expansion. The Reserve Bank of India has voiced concerns regarding the rising credit-deposit ratio and the accumulation of unsecured retail loans which could pose risks to the financial system.

In addition to targeting the unbanked population Setty revealed that SBI is also investing in wealth management technology aimed at increasing its share among affluent customers. This initiative puts SBI in direct competition with international banking giants such as HSBC Holdings Plc Barclays Plc and Standard Chartered Plc as they all seek to capitalize on India’s growing wealth. A recent report by the Boston Consulting Group indicated that India generated approximately $590 billion in new wealth in 2023 marking the largest increase in history.

To support its wealth management ambitions SBI has deployed around 2000 relationship managers and intends to leverage its extensive network to manufacture and distribute related financial products.