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SBI: Big Daddy Of Banking

In view of the crisis in the banking sector, sbi’s showing in 2020 will have a direct impact on other banks

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With the banking sector under stress for a large part of the year gone by, India’s largest lender State Bank of India or SBI’s performance is being closely watched by the banking fraternity in the new year for clues to their own functioning. 

With over 43 crore customers, SBI is the oldest commercial bank in the subcontinent, tracing its ancestry to Bank of Calcutta founded in 1806.

In 2020, SBI is going to be more relevant to the Indian economy than ever before. “Our transformation strategy going forward will focus predominantly on five areas: customer service, corporate credit revamp, digitisation of banking operations, synergy between subsidiaries and human resource,” says Rajnish Kumar, Chairman, SBI. 

Despite being one of the oldest financial institutions in the country, the bank has embraced digital technology with an aim to improve customer service. The bank’s digital application, YONO, has achieved two crore downloads and boasts around 73.49 lakh registered users. 

Additionally, ‘YONO-Cash’ has been made available to customers for cardless cash withdrawal through ATMs. The bank has also set up 2,200 e-corners across the country where customers can avail services through ATMs, ADWMs, SWAYAMs, Check Deposit Kiosks and online banking kiosks. 

Currently, more than 1.4 crore transactions are routed through the bank’s ATM network on a daily basis. Further, to ensure safety of ATMs and customers, the bank had approximately 13,000 ATMs under e-surveillance as on 31st March 2019. 

From January 2020, the bank would introduce an OTP-based cash withdrawal system to ensure further safety of consumers. “Introducing the OTP-based cash withdrawal system to help protect you from unauthorized transactions at ATMs. This new safeguard system will be applicable from 1st Jan, 2020 across all SBI ATMs,” the company recently tweeted.

In FY19, the bank’s total deposits grew 7.58 per cent to Rs 29,11,386 crore from Rs 27,06,343 crore in FY18. The banking industry’s credit growth picked up in FY19, with gross advances of the bank growing 11.96 per cent to Rs 22,93,454 crore by March 2019 from Rs 20,48,387 crore in FY18. According to the annual 2018-2019 report, credit to corporates increased 14.83 per cent in FY19 with a major share going into sectors such as infrastructure and services especially NBFCs. In addition, the net interest income of the bank stood at Rs 88,349 crore, which was 18.03 per cent more than the previous year. 

This year, SBI Cards is set to list on the bourses. It had filed the draft red herring prospectus with market regulator Securities and Exchange Board of India (SEBI) on November 27 last year. It plans to raise around Rs 9,600 crore through an IPO. 

SBI Cards has a market share of 18 per cent, which is second only to HDFC Cards’ 27 per cent market share. The company had 9.4 million outstanding cards as of September end. According to the draft prospectus, the company expects the number of credit cards to increase at an annual rate of 25 per cent.

According to Chairman Rajnish Kumar, global growth moderated to 3.6 per cent in 2018 with a slowdown witnessed in both the developed and the emerging markets. Protectionist policies by the US, uncertainty over Brexit and slowing GDP growth globally heightened the slowdown. 2018 was a year that saw increased volatility in the financial markets. 

“India is a beacon of growth. Structural changes such as IBC and stabilisation of GST are expected to provide impetus to economic activity. Low inflation, accommodative monetary policy and government income support to farmers are also likely to support domestic economic activity. However, prolonged US-China trade war and rise in oil prices remain key risks to the growth momentum,” Kumar stated in the annual report 2018-2019.  

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