SBI to avoid interest rate war despite ongoing deposit pressure, says new chairman C S Setty

Deposit war: The State Bank of India's new chairman, C S Setty, announced on Friday that the bank will steer clear of engaging in an interest rate war to attract deposits, even as pressures to increase deposits persist across the banking sector. Setty, who assumed his new role on Wednesday, emphasised that the country’s largest lender will instead focus on leveraging its customer service and extensive network to drive deposit growth.

"Competition on deposits is expected to continue for some time," Setty remarked while speaking at the Global Fintech Fest (GFF) in Mumbai. He noted that SBI is targeting a credit growth of 14-16 per cent for the fiscal year 2024-25, which he believes can be sustained with an 8-10 per cent growth in deposits, thanks to the bank's substantial base of liabilities.
On the sidelines of the event, Setty elaborated on his strategy to strengthen SBI’s robust balance sheet. He also shared plans to launch the highly anticipated YONO 2.0 in a closed user group in November, with a broader rollout to follow. The upgraded platform is part of the bank’s digital strategy, which aims to source 90% of its retail unsecured loans through digital channels. To date, SBI has disbursed ₹1.3 trillion in personal loans via the YONO app.

In addition to his remarks, Setty introduced three new offerings aimed at enhancing the commute experience across India: the MTS RuPay NCMC prepaid card for offline payments, the One View mobile app, and an advanced design for SBI FASTag.

At the same event, Axis Bank CEO and Managing Director Amitabh Chaudhry commented on the broader banking landscape, noting that the celebrated zero balance accounts have yet to reach a significant scale. He also expressed concerns over the rising incidence of fraud, which has made consumers more hesitant to engage in banking transactions.
Chaudhry revealed that Axis Bank will soon offer a new service on its mobile app, allowing customers of other banks to conduct transactions, expanding beyond the current capability of merely viewing account details. He also highlighted that Axis Bank is running 15 pilots involving artificial intelligence and machine learning, including one focused on human resources to streamline the hiring process.