In order to boost its deposit base, State Bank of India (SBI) is focusing on various segments, including JanDhan account holders, trusts, societies, and the segment below the affluent class but above the normal account holders.
According to Ashwini Tewari , managing director, SBI, the bank is focusing on three broad segments.
One is wealth banking, where the bank is focusing on individuals who perhaps do not qualify for private banking but are above regular accounts and require individual attention.
“So, that is one segment we are focused on.
"We have created a vertical and a separate platform for this,” Tewari said.
Additionally, the bank is targeting trusts, societies, associations, and clubs.
“We are approaching these segments with a set of dedicated products, including transactional banking, tying up with fintechs, and outreach by way of dedicated sales forces,” Tewari added.
Further, the bank is also looking at some of the low-value segments, which come broadly under the JanDhan accounts.
“There is a lot of deposit which is sitting there,” Tewari said, adding that the bank is now using bank correspondents as marketing arms to mobilise deposits from such accounts.
“Have we actually asked them to deposit? We possibly have not.
"We can reach out to them, give them small offerings such as insurance, mutual funds, etc.,” he said.
According to Tewari , the larger message is that deposit-gathering is no longer a walk-in phenomenon.
Rather, it has to be an outreach to different segments with dedicated products and special attention.
This comes at a time when the clamour is growing among banks to mobilize deposits as increasingly household savings are moving towards other high-yielding financial instruments.
Both the Reserve Bank of India (RBI) and the finance ministry have expressed concerns on numerous occasions over the sluggish pace of deposit growth as compared to credit growth, which is creating a divergence that may lead to asset-liability management problems for banks.
Additionally, they have instructed banks to employ innovative methods to accrue more deposits.
Tewari also highlighted that the challenge that banks are facing on the deposits front is a short-term one and a cyclical issue, which will revert to normal.
However, he emphasized that there could be a secular movement (of household savings) towards investments, which is a good thing because all developed markets move towards that ultimately.
Meanwhile, speaking at the FICCI-IBA event, Prashant Kumar, MD & CEO of Yes Bank, stressed how innovation can come in for deposit mobilization if banks are allowed to offer differential rates of interest to different customers, depending on their risk profile.
“Today we need to offer the same rate of interest for the same amount for a particular bucket irrespective of the risk of the customer.
"Innovation would depend on if the banks would be allowed to offer differential rates of interest, depending on the risk profile of the customers,” he said.
