 "SBI’s Bold Strategy: Quality Over Rates Amidst Banking Challenges")
At the Global Fintech Fest in Mumbai on August 30, 2024, SBI Chairman Challa Sreenivasulu Setty emphasized that banks will focus on improving service quality instead of engaging in a rate war for deposits. He mentioned a slight adjustment in interest rates, particularly for the popular 1-2 year term deposits. SBI recently launched the “Amrit Vrishti” retail term deposit scheme, offering 7.25% interest for a 444-day period. Setty noted that while credit growth is strong, deposits are growing at a slower pace. He also discussed the upcoming launch of YONO 2.0, which aims for a complete overhaul of the app to enhance user experience amid the bank’s broader digital transformation strategy.
SBI Chairman Challa Sreenivasulu Setty speaks at the Global Fintech Fest in Mumbai on August 30, 2024, emphasizing the ongoing competition among banks for customer deposits. Instead of engaging in a rate war, banks are shifting their focus towards enhancing service quality to attract and retain customers. Setty mentioned that while interest rates in the popular 1-2 year tenure might see some adjustments, the main strategy will prioritize improving customer experience.
In line with this, the State Bank of India has introduced a new retail term deposit scheme called ‘Amrit Vrishti,’ offering a competitive interest rate of 7.25% for a tenure of 444 days. Setty also noted a change in how customers are allocating their investments, with more individuals diversifying into other asset classes, impacting overall deposit growth.
He highlighted the banking sector’s challenge of sluggish deposit growth, now lagging behind credit growth. However, Setty reassured that SBI is comfortable with its current credit-deposit ratio and anticipates robust credit growth of 14-16%. He pointed out that corporate investment in brownfield expansion is being funded internally for now, but once this changes, demand for credit will rise.
Setty also announced the upcoming launch of YONO 2.0, which aims for a comprehensive transformation of SBI’s digital platform that currently serves around 80 million users. This initiative focuses on creating a more stable and scalable application, aiming to enhance the overall user experience.
With these efforts, SBI is positioning itself to navigate the evolving financial landscape while focusing on technology and customer service enhancements.
Tags: SBI, Challa Sreenivasulu Setty, Global Fintech Fest, banking, deposits, YONO 2.0, interest rates, customer service, digital transformation, Amrit Vrishti
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What did the SBI Chairman say about competition for deposits?
The SBI Chairman mentioned that competition for deposits will continue for some time, indicating that banks are vying for customer savings. -
Why is there a competition for deposits among banks?
Banks want to attract more customers and increase their savings so they can have more funds to lend and invest. -
How does this competition affect customers?
Customers may benefit from higher interest rates on their savings accounts as banks try to attract more deposits. -
Will this competition last long?
According to the SBI Chairman, the competition for deposits is expected to continue for a while as banks strive to grow their deposit base. - What should customers do during this time of competition?
Customers should compare savings account interest rates and terms from different banks to find the best option for their needs.
