Mumbai,Manju AB: State Bank of India (SBI) is fighting a long battle in the technology space. The country’s largest bank has managed to migrate about a tenth of its 280 million customers to the internet platform. SBI plans to take its branch network to 17,260 by setting up 560 new branches during this fiscal, of which 200 will be fully digitised. For Manju Agarwal, deputy managing director in charge of corporate strategy & new businesses, it is hardly a challenge. After a long 32-year stint with the bank, handling various portfolios from rural banking to a foreign assignment at Frankfurt, she now handles the most happening portfolio – the digital banking. Though a late entrant, SBI is in a hurry to take over the space which is getting crowded by private banks and the new set of payment banks. In a chat with Manju AB, she says, “We are close to being the leaders in the digital banking space.”
Q. You were credited for achieving the impossible in your foreign posting at Frankfurt…
A. I was responsible for Trade Finance at our Frankfurt office. We had to undertake Systems change twice over a period of one year – we moved from Doka to Flexcube (it was necessary to ensure regulatory compliance) and then to Finnacle (all foreign offices moved to a single system). All our foreign offices are thinly staffed and the number of India-based officers (IBOs) is far too low. As locals will not be willing to work over weekends, the responsibility devolves only on IBOs. For almost a year, we would be in office on all the weekends from 8 am to 8 pm. For me, it was truly a baptism by fire.
Q. It is said that you convinced the Reserve Bank governor Raghuram Rajan against the loan waiver in Andhra Pradesh and Telangana during 2012-14. Why did you not want to give a loan waiver to the farmers?
A. Credit goes to our chairman Arundhati Bhattacharya. We believe that any loan waiver spoils the repayment culture. It is a disincentive to prompt repayment. The Andhra Pradesh government told RBI that the state had suffered crop failure, and hence banks should be asked to restructure agri loans and sanction fresh loans to farmers. There was actually no distress. RBI wanted a feedback on bank credit data in AP and Telangana during 2012-13 and 2013-14. We collated the data and showed RBI that the balances in the savings accounts of farmers actually swelled post harvest and thinned out during sowing season. Clearly, farmers had stopped routing the monies through the crop loan accounts in the hope of loan waiver. This was the time when the NPAs of our bank in agri segment swelled to an all-time high level. We also collected data on food production for the year 2012-13 and 2013-14 from the state government site where production was stated to be higher than previous years. Rest is history.
Q. Setting up the Jan Dhan accounts for the bank was an incredible feat. What was your experience?
A. We opened around 45 million Jan Dhan accounts in a short span of 8 months, from August 2014 to March 2015, a majority of which were in the remote areas. As of today, we have 70 million Jan Dhan accounts. The scheme was implemented in a mission mode by all stakeholders. We had areas under snow, and areas affected by left wing extremism (LWE), among others. In fact, our teams were accosted and their papers seized and torn several times in naxal-hit areas. Next challenge was to identify customer service personnel (CSPs) and train them, deploy them and integrate them into the system. This was the most difficult part in the implementation. Also, telecom connectivity was a huge challenge in some areas. All customers were issued debit cards to have ease of operation. Since most of these customers are illiterate and would see card for the first time, the usage of card and confidentiality of PIN was also explained. Financial literacy material was standardised and attractive pamphlets and small movies were shot and displayed. The task was onerous and challenge very real, but we worked as a team.
Q. What are you plans for branch expansion?
A. We are planning to set up 560 new branches during the financial year 2016-17 which will take our branch network to 17,260. Of these, around 200 will be InTouch branches which are fully digitised outlets. We have expanded the InTouch branches from 7 in July 2014 to around 100 branches in 2015-16. These are primarily sales outfits, which help us acquire customers, mobilise deposits and also book home loans and auto loans. The customers can select the car of their choice, surf for a home as we have large listings of properties (smart table or wall). The customers can also talk to a remote relationship manager for their banking needs. We plan to open these branches in metro and urban centers where people are comfortable with the virtual bank. If you have all your KYC documents like the Aadhar card and PAN card, you can open an account instantly, deposit money, avail a car loan or home loan provided you have the requisite documents for a loan (like salary slip, I-T Returns, Cibil history, etc).
Q. Have you managed to shift customers to internet banking?
A. Out of our total customer base of 280 million, we have managed to migrate about one tenth on to the internet platform. Considering that majority of our customers are in rural and semi-urban areas, that’s a very decent number. We have 26 million internet banking customers, of which around 25 million are retail customers and remaining, corporate customers. Total internet banking transactions in a year are about Rs 130 crore. As the information on other banks is not available in public domain, we really do not know how other banks are faring, but we believe that we should be the industry leader in this space also. Our net banking site ‘onlinesbi.com’ is the world’s eighth biggest finance site (and the only bank from India) registering 846.6 million average monthly visits (source: India Infoline News Service). Also, SBI is the third most searched site, after IRCTC and Flipkart as per Google Search Trends Calendar Year 2014 and 2015.
Q. What about ATMs and point of sale terminals? At present, HDFC Bank has more POS terminals than SBI?
A. We have set up more than 3 lakh POS terminals by the end of March 2016. We need to wait for the final numbers from other banks to see who has the largest POS network now. We plan to roll out 9,000 ATMs this financial year; 2,000 will replace the old ATMs and 2,000 will be the recyclers. This will take our ATM network to 51,300 all over the country. This excludes the ATMs of our associate banks.
Q. From December 2015, your mobile banking transactions really jumped. How did you do that?
A. We did transactions for around Rs 4,000 crore during October 2015 and Rs 6,000 crore during November 2015. But the transaction value for the month of December 2015 was a whopping Rs 17,600 crore. This was made possible as we launched two applications for our corporate clients – ‘State Bank Anywhere-Saral’ and ‘State Bank Anywhere-Corporate’. Though these applications were lunched in May and October, it took us time to create awareness and migrate customers. We have been constantly working to improve our products both in terms of features and the ease of usage and customer experience.
Q. What is the SBI no-queue application about?
A. It is a smart phone-based application to book an instant queue ticket (token) for selected services at select branches. The No-Queue app can be downloaded from Google Play store. The app will be available in Apple Plays store also in about a week’s time. Based on the services selected by the customer, the list of branches with addresses and approximate wait time within a configured radius of 15 kilometre will be populated in the application. Once customer chooses a branch, he gets a virtual token on his mobile. On reaching the branch, he has to activate his Q-ticket and he will be serviced immediately, avoiding wait time at the branch. About 2,200 plus branches are linked to this application and we are planning to bring more branches under this facility.
Q. How is your mobile wallet ‘SBI Buddy’ doing, considering that you were a late entrant in the segment?
A. We may be a late entrant, but we have 2.7 million Buddy customers and we are the only bank to have so many. This goes to demonstrate our capability in terms of customer migration. Also, Buddy is a very special product in as much as this is the only wallet available in 13 Indian languages making it easy to adapt for people across geographies. We also plan to link Buddy with the business correspondents so that people in rural areas can also load and withdraw cash from customer service points.
Q. SWAYAM initiative is also used by customers in a big way.
A. Bank passbook is the most important document for many customers. For this, SBI launched SWAYAM-Barcode based passbook printing kiosk in November 2014. While developing the solution, utmost care has been taken for the security and user friendliness of the utility. Once the customers get the barcode affixed sticker to their passbook, they can print their passbooks in 2-3 simple steps with video and audio guidance in 10 regional languages apart from Hindi and English. After the launch in November 2014, the rollout started in January 2015 and in last 15 months, more than 6,000 SWAYAMs have been installed across the country reducing the crowd in the branches. More than 20 million passbooks are being printed in a month now. SWAYAMs are being placed in eCorner, ATM kiosks.