State Bank of India (SBI) intends to reach the first milestone in its journey to make Yono an app for every Indian in March 2023, by onboarding 100 million customers, chairman Dinesh Khara told FE in an interview. The lender hopes to mobilise Rs 1 trillion worth of assets through the mobile app this year compared with Rs 62,000 crore in FY22. SBI today has 450 million customers while Yono’s customer base stands at 52.5 million.
“We’ve given ourselves a year to take Yono to a larger number of customers, having started in February-March. The idea is to take it to a point where customers can do payments transactions before they come into the login screen, like it is done on other payment apps like Google Pay,” Khara said. About 65% of the bank’s fresh liabilities were sourced through Yono last year.
SBI is also evaluating a Buy Now, Pay Later (BNPL) product offering. “Essentially, it’s a loan on the go. It may not be termed ‘BNPL’, but we can always do it,” Khara said. The bank will have to evaluate the potential of BNPL as a product and also work out some technological upgrades, he added.
On SBI’s new operations support subsidiary, the chairman said it will help the lender to better sweat its presence in rural India.
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Khara pointed out that at present, SBI’s branches across the hinterland typically have two employees each – an officer and a clerk – who are often engaged in facilitating transactions. The new subsidiary will focus on generating business as also on carrying out functions like opening new accounts and offering doorstep services.
“We are seeing this as a vehicle for support. There may be a hub-and-spoke approach within a radius of a few kilometres,” Khara said, adding, “Actual business development was not happening much. The rural space is changing and we would like to sweat the opportunities in the rural economy better.”
The subsidiary will not be an investment-heavy entity and will employ 2,000 people to start with.
In addition to the Rs 5 trillion worth of working capital and term loans that are unutilised, the chairman said another Rs 1.2 trillion worth of loans were in the process of being sanctioned. “Corporates were de-leveraging and depending on equity capital and other means of funding. Now the equity market is running dry and G-Sec yields have risen. So the unutilised limits have come down to 49% from 55%,” Khara observed.
The chairman noted that the lender’s credit-deposit ratio currently is just 63% and therefore, it doesn’t need to chase deposits aggressively. “While we hope to take up the ratio to 75%, given the uncertainty, it’s hard to say how soon this could happen,” he added.
Speaking about the MSME portfolio, the chairman said, MSMEs saw disruptions in their cash flows during the pandemic. “Our restructured MSME book has behaved pretty well. We had created a provisions buffer for that, but the restructured portfolio has come down from Rs 32,000 crore to Rs 28,000 crore,” he said. Even the emergency credit line guaranteed scheme (ECLGS), Khara said, has a non-performing asset (NPA) ratio of only 1.41%.
The chairman observed the bank has switched to cash-flow based lending for MSMEs from balance-sheet based lending. “We are also looking at vendor financing in a big way,” he said.