SBI to tap e-commerce, digital space

State Bank of India (SBI) is planning to tap the potential of e-commerce business and focus on digital platform in the near future, said B Sriram, managing director (National Banking Group), SBI. The Bank is also looking at increasing its growth in Small and Medium Entreprises (SME) portfolio to 10 to 12% by the end of the year.

The Bank, which already entered into agreement with some of the e-commerce players, would look at covering the entire e-commerce value chain, he said.

Besides the payments business from these firms, which is part of its debit and credit card initiatives, the bank would also like to address the vendors who supply to the e-commerce space, to finance them in all e-commerce platform and also to offer personal laon for the customer for their purchase from these platforms.

"Even the e-commerce player, we can do remittance, we can do their funding, we can do their warehousing financing, a lot of things to the Amazons and Snapdeals we can do. The whole value chain will be on digital space," he said.

"It (e-commerce) is a big business. We have just started, but the e-commerce economy is growing. We will have to wait and see how much it will grow," he added.

In the next one or two years, the Bank's plan is to go in a very big digital platform, a journey it started last year with the touch branch as the first initiative.

"We will define our processes digitally. Lot of products we are now giving like loan against shares, loan against Fixed Deposits and all are on the digital platform. We would like to put more and more products on that," added Sriram.

During the year, the focus would also be in maintaining the CASA and engaging with the corporates for corporate salaries and other products, apart from the growth in retail, agri and SME products.

The Bank has been putting in a system in the last one year, which is now implemented across the country, to bring in growth on the SME portfolio. The growth in this portfolio is muted or a marginal two or three% growth in the recent past and in the first quarter of this fiscal year, it was just at one% growth.

SBI has introduced a system in which relationship managers were appointed for the Medium and small industries to identify potential customers from the public domain, track them by finding good leads through due deligence and convert those leads into business, with the help of digitisation. The due diligence is also strengthened including a scrutiny by experts within 48 hours after the loan has been sanctioned, to make the sanctions and processing in the low value SME space much stronger, he said.

It is also trying to push risk mitigated products, such as the Electronic Dealer Financing Scheme (EDFS) in a big way. The EDFS product, which was Rs 3000-3,500 crore three years ago, currently crossed Rs 10,000 crore and hardly any NPS there, said Sriram.

For instance the Bank has already offered its service to around 1,500 drivers tied up with Ola Cabs to offer loan to buy vehicle, where the ticket size would be lower, but the volume is higher since it can offer the product to various service providers. The Bank is designing some products on the digital space, he added. He said that almost 60% of the government business for SBI has also moved into electronic mode till now.