SBI planning automated system to cut zero balance account cost

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State Bank of India (SBI) is trying to put an automated system that would minimise the cost on zero balance saving accounts which are adding to higher cost but not improving the bank's CASA ratio. Reuters State Bank of India (SBI) is trying to put an automated system that would minimise the cost on zero balance saving accounts which are adding to higher cost but not improving the bank's CASA ratio. Reuters
SummaryState Bank of India (SBI) is trying to put an automated system that would minimise the cost on zero balance.

State Bank of India (SBI) is trying to put an automated system that would minimise the cost on zero balance saving accounts which are adding to higher cost but not improving the bank's CASA ratio.

"CASA (current account savings account) is under pressure as we are opening a lot of free saving bank accounts as part of financial inclusion and carry a cost. But we are trying to address this," SBI Deputy Managing Director P K Malhotra said today on the sidelines of INFOCOM 2013 organised by the ABP group.

A high CASA ratio would mean that high portion of deposits is from current and savings accounts.

"The account opening from business correspondent is 34 per cent of the new saving bank accounts. So, this has an affect on CASA," he said.

Malhotra said a lot of initiatives are being taken to bring down costs. "We are trying to put in automated technology

platform with focus on financial inclusion accounts mobilsed by business correspondents ... We are trying to take out the manual intervention to slash cost."

The bank's CASA ratio is under pressure since the last three quarters of the current fiscal. CASA ratio in September quarter was 43.58 per cent against 44.95 per cent in the same quarter FY 2013.

Malhotra said SBI's agri credit growth is 20 per cent and witnessed healthy growth in gold loan business portfolio.

"We have a gold loan portfolio which is over Rs 30,000 crore and it is growing at 70 per cent. But, we are not pushing this product separately as we do not want to be recognised as a gold loan company," he added.

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