The seasoned banker with 33 years’ experience explains how before the pandemic, banks had been investing heavily to adapt to the revolutions in the banking and financial sectors, and particularly in its digitalized platform, which helped maintain its business operations. Ex-COO at SBI New York branch, Sudhir Sharma views the bank’s local performance as remarkable in this pandemic period, with both its top-line and bottom-line showing a growth streak.

Two lockdowns within one year, a severe economic GDP contraction of almost 15% in 2020 and a general slowdown of the main economic sectors. To what extent have SBI’s overall operations been impacted?

Indeed, Covid-19 has played spoilsport in the economic growth of the country, and for the entire world. Lockdown measures have hugely impacted on tourism and allied sectors, which were still in the double-digit decline. But our bank business has been resilient over the period and our performance has improved compared to year 2020. While our overall asset size has grown by 17.32% in June ’21, as compared to June’20, deposits have grown by 30% and net profit has jumped by 139%. Our retail products, particularly housing and car loans, have received ove- rwhelming response from customers and our retail business has grown by 32% during the same period.

Given the fact that the pandemic has changed the “modus operandi” of many financial institutions, with the concept of “work from home” gaining ground globally, the physical presence of customers is limited to a minimum. How has SBI responded to this new phenomenon?

Our parent bank has always been a pioneer in introducing various digital platforms for creating better customer experience and convenience of banking. One of such platforms being the YONO digital app. We also launched the Mauritius version of the app in May last year and the response from the customers has been exciting. Similarly various other highly secured channels for customer interaction are in place, which take care of customers’ banking needs. However, over the period, we have seen customers visiting branches for various regular banking needs and we are following strict Covidnorms for the safety of our customers and staff. For employees wherever possible, we have introduced ‘work from home’ and various roles and media, like Microsoft Teams, are used for meetings with clients and internal deliberation.

Would you say that these exceptional circumstances following the pandemic outbreak have prompted the bank to digitalize its operations?

Much before the pandemic, banks had been investing heavily to adapt to revolutions in the banking and financial sectors. However, such circumstances have taught us how to survive under a calamity of such unprecedented scale, taking together the interests of customers, management and society at large. Remember, the banking sector as a whole was offering services, just like other essential services, during the peak pandemic days when the whole country was under lockdown conditions. Digitalization has definitely helped the bank’s business continuity and this experience will prompt the adoption of more and more technological innovations in the banking sector.

‘‘Being part of the large SBI group conglomerate, we have the advantage of leveraging from the digital journey adopted by the parent bank.’’

SBI is not the only financial institution operating a digital platform as others are innovating rapidly in this field. What is the bank’s competitive edge?

Venturing into any digital technology platform needs huge investment and a scale for operation. Being part of the large SBI group conglomerate, we have the advantage of leveraging from the digital journey adopted by the parent bank. One of such examples being the YONO platform, which has shown remarkable traction since its launch last year. At the end of the day, customers nowadays have various choices before them and only the most convenient, secured, and trusted platform is opted by them. Our endeavour is to make our customers’ digital banking journey one such experience.

 It goes without saying that there is cut-throat competition within the banking sector with two domestic banks taking more than 60% of the market share. How is SBI, as a medium-sized bank, managing to survive in this highly competitive environment?

Each bank has its own strategy of serving the customer and acquiring business. We have been operating over three decades now and we very well understand our customer needs and the market offerings. Being medium-sized, we have the advantage of being nimble-footed and achieving quick decision-making to ensure prompt and efficient service. Being medium-sized also helps in lower operating costs that result in offering competitive pricing to customers. We have experienced the same when we started offering competitive rates in housing and car loan products in recent times.

 As a commercial bank, SBI is offering a whole range of services to both its corporate and retail customers. What are their profiles?

Are you targeting a specific market segment? We have varied customer segments, which include clients in the top 100 corporates of the island, SMEs, as well as retail customers, who reside in the village side. Our network of branches is capable of creating relationship-based banking both with individual and corporate customers. We are also deeply looking to the banking needs of the Gen-next and will keep them engaged through various innovative products and offerings.

‘‘The country’s listing in the FATF & EU has its negative impact particularly warranting extra due diligence.’’

 How would you assess the bank’s financial performance, which shows a slight progress from its 2020 audited accounts?

As discussed above, our performances have been remarkable in this pandemic period with both the topline and bottomline showing growth streak. The growth during the first quarter of the current financial year has been encouraging and sustainable which indicates financial year 2021-22 would come out as another performing year. Our non-performing asset size has improved substantially with recoveries and on net basis standing at 1.09% of the asset base as at end of June 21. We have high capital base to support our business growth plan and have been able to create value for our shareholders.

 SBI is operating a Global Business cluster targeting investors within the region. Given the fact that the country is grey and black-listed by FATF and EU respectively, to what extent has the bank suffered adverse impact from the jurisdiction’s inclusion on these two lists?

Yes, being rooted in India and part of the SBI group, we play a key role in the India-Mauritius investment corridor. The country’s listing in the FATF & EU has its negative impact particularly warranting extra due diligence. We have not observed any major decline in business as such. Moreover, the parallel existence of the pandemic makes it more difficult to judge the real cause of any fall. But the country has made significant efforts to exhibit its determination to exit these lists and we are hopeful that this becomes the reality very soon.

 What are your future plans to drive the bank’s growth?

We have recently undergone a business-strategy ideation exercise. Based on the recommendations, we are step-by-step implementing the initiatives. Our focus will remain on creating the brand awareness as well as sustainable business performance and engagement with the society. In the medium-to-long-terms, we may look at opportune times to unlock our market value to make ourselves more responsive and create more value for its shareholders.