With competition hotting up in the country’s banking space, the largest lender, State Bank of India (SBI), is preparing to become more aggressive to take on new payments banks, small finance banks and other entities.
SBI chairman Arundhati Bhattacharya on Saturday said the bank is rapidly ramping up its digital products, as well as its franchise model, as she believes “the best form of response is not being defensive, but being on the offensive”.
According to her, after two universal banks (Bandhan and IDFC), 11 payment banks and 10 small finance banks, four new entities might also enter the fray. “The other four that I am told are foreign banks, some of whom may come in a totally digital model. So you have suddenly got 27 new banking entities getting into this particular area,” Bhattacharya said during an event in Kolkata.
“What cannot be denied is the fact that competition is going to heat up… We (SBI) have come up with several new products and several new processes, and I believe the way we are going, most of the other (incumbent) banks are also going the same way,” she said.
Bhattacharya said SBI might not require any more capital to support its business growth in the current financial year. The lender aims to achieve a 14% loan growth this fiscal.
“We are seeing pick-up in credit in sectors like renewable energy, mining and road infrastructure. We expect pick-up in other sectors like railways, defence, transmission and ports in the coming months,” she said.
The country’s largest bank is planning to raise resources by listing its subsidiaries like SBI Life Insurance and SBI Cards. “We are talking about listing the subsidiaries, but not this year. It is very difficult to tell you when, but we are considering it,” Bhattacharya told reporters.
Pointing out that the bank would require ‘huge’ capital to support growth in the next two-three years, she said, “We are looking at various ways to raise capital. We are looking at options like listing some of our subsidiaries, leveraging various assets and fund infusion from the government.”