Fintech competition noted




Technology is definitely impacting positively and raising the productivity hugely, with which the credit cost will come down and that benefit will be passed onto corporate clients.

Assuring this, the State Bank of India Chairman Rajnish Kumar pointed out that India is not far behind in adoption of technology.

“If you look at it, India is not far behind in adoption of technology, which in turn is enhancing the overall productivity. Unless our productivity goes up, we can’t compete at the global level,” Kumar said at the first edition of “FICCI Dialogue for Actionable Insights?” held in Hyderabad on 4 Jan 2020.

“I believe in India’s vision for sure, on account of its demography, adoption of technology and the productivity, but there are several issues which needs to be sorted out before we realize our full potential.”

Speaking on “Outlook on the Indian Economy”, he noted complaints about high rate of interest, and pointed out that one of the contributing factors is high a default ratio and a high loan loss ratio. The banks have to recover the credit cost and all that gets loaded to the customer.

Noting the technologies’ role in shaping global economies, he acknowledged new competitors in the form of Fintech, which are bringing in lot of innovation.

“So, a historic or a legacy bank like us has to respond to the rapid changes that are taking place. Some satisfaction is (that) we have been able to match that.”

For consumers, SBI has a state-of-the-art offering in the form of YONO.

Over the last two year, SBI has focused on retail banking and have 1.7 crores registered users, said Kumar, observing a huge shift from internet banking to mobile banking.

“We, as a banker, view corporate not just as a client but as a large ecosystem comprising of various stake holders associated with it.

“We want to be an integral part of the entire ecosystem and tap the complete structure. Our focus with Corporate Banking is no more lending money alone, the performance criteria is how much we are helping the ecosystem around the corporate,” said Kumar.

He was also happy to note MSME sector getting more and more formalized, calling it as a positive sign of Goods and Services Tax (GST) and demonetization.

Today, the availability of data on MSME is much more and that enables banks to lend loans in an easy manner end to end, loans up to Rs.5 crores is now possible, he assured.

After 31 January 2020, this loan will be raised to Rs.100,000 crore with digitized application. There will be no paperwork and no manual interference, he added.


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