[sbinews] SBI goes hi-tech to prop retail customer base (Economic Times)

  • From: "Rajendra S. Pai" <rs.pai@xxxxxxxxx>
  • To: <sbinews@xxxxxxxxxxxxx>
  • Date: Fri, 26 Mar 2004 08:40:13 +0530

SBI goes hi-tech to prop retail customer base
(Economic Times)
PUNE: The domestic banking behemoth, State Bank of India (SBI), has moved
into over drive, using technology. The aim: to grow its retail customer base
while getting back customers it may have lost to new private sector banks.

Technology will thus play a bigger role, and not just in the urban or
semi-urban areas, senior bank officials said. Set to be launched "very
shortly" in rural areas, are mobile ATMs, targeted at specific segments like
the dairy industry in the Baramati area, grape growers in the Nashik region
and onion growers in Aurangabad . Market gardeners (vegetable growers) are
also of special interest to the SBI.

"We want to push contract farming, for which the central government's
ministry of food processing gives subsidies.

The bank will fund the supplier of seeds and other inputs, who will have
entered into a contract with the farmer to buy produce of a certain quality,
quantity and standard for a pre-determined price. This makes a winning
proposition, since the buyer gets produce he wants at a price which is
beneficial to both. The farmer gets an assured buyer and his profit margin
in advance," Ramesh Kumar, chief general manager, SBI, Mumbai circle, told

"This is a very unstructured and totally untapped segment," Diwakar Gupta,
general manager (development and personal banking), SBI, said, referring to
the mobile ATM business.

The SBI has 260 ATMs in the Mumbai circle (covering Maharashtra and Goa ),
which will be increased to 320 by March 31, and 700 by the end of the next

Mr Kumar said SBI Backbone, the broadband service of the bank on which its
back office operations run, currently covers 100 cities. It is set to roll
out and cover more cities. Currently, the bank is holding seminars and road
shows to get corporates and other entities to use SBI's Internet banking
services for corporate salary payments or for payment to vendors. It has
90,000 users of Internet banking globally.

"This very specialised product has been launched very recently. The
Maharashtra government is currently paying salaries and pensions using our
Electronic Clearing System (ECS) for its employees in Pune. It wants to
expand this service," Uttara Dasgupta, deputy general manager, Pune zone,
SBI, said.

Referring to the specialised personal banking branches being set up by the
SBI, Mr Kumar said this is targeted at high networth customers where they
could pay an additional charge for the services offered. He cited the
example of safe deposit boxes, where rents are usually in the range of Rs
500. At a specialised branch, this could be as much as Rs 2,000 for the
privacy and other services offered.

Ms Dasgupta said SBI has witnessed a return of its customers, from private
sector banks, since the latter discouraged customers coming to the branch.
Mr Gupta added that the hidden costs charged by the newer banks was another
reason for customers coming back. SBI has also launched its Core Banking
Facility at its new special personal banking branch. This allows customers
to use anywhere banking. SBI will invest Rs 800 crore to implement the core
banking solution across 3,000 branches by '05.

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