Mobile, Internet, e-banking - the way to go

In tune with the times, the Thiruvananthapuram-headquartered State Bank of Travancore is setting great store by mobile and Internet-based banking as well as harnessing the e-platform to executing Government business.

Mr P. Nanda Kumaran, who has taken over Managing Director in recent times, says that the mobile banking services are steadily gaining traction and monthly registrations have touched ‘the five-digit mark' over the last three months, compared to the sub-1,000 levels a month earlier.

More importantly, the value of mobile-based transactions has crossed the Rs 1-crore mark a month during this period.

“We expect Internet banking and mobile banking to grow in a big way in the coming months,” he said in an interview.

“One other real success story has been the e-payment of commercial taxes in Kerala, wherein we are seeing around 60,000 Internet transactions worth Rs 900 to Rs 1,000 crore every month.”

The bank has 900 ATMs of our own, which are part of the 25,000-plus State Bank Group network, touching every nook and corner of the country. ATM transactions are growing at around 18 per cent every year at over Rs 1,500 crore worth of transactions every month.

“Going forward, we expect over half of all transactions would be through self-service channels such as ATM, Internet and mobile banking,” Mr Nanda Kumaran adds.

Excerpts:

Could you spell out a road map for the bank which had broken into the Rs 1 lakh-crore territory in December 2010 itself?

The bank is continuing with the steady growth trend in business, with the total turnover touching Rs 1.1 lakh crore at the end of the latest half year.

As the processes in regard to consummating a Rights issue are already apace, it may not be proper to give a forward guidance at this stage, according to the guidelines of Securities and Exchange Board of India (Sebi).

Public sector banks are looking at new opportunities in areas such as financial inclusion, mobile banking and rural banking. What is the outlook for SBT with respect to each?

We have already fulfilled our financial inclusion target by extending banking services to all our allotted villages in Kerala with one branch having been opened in one of the 29 such villages and Business Correspondent/Business Facilitator (BC/BF) services being rolled out in the remaining 28.

Our mobile banking services are steadily picking traction and monthly registrations are touching the five-digit mark over the last three months, compared to the sub-1,000 levels a month earlier.

More importantly, the value of mobile-based transactions crossed the Rs 1-crore mark a month during this period.

We expect Internet banking and mobile banking to grow in a big way in the coming months.

One real success story has been the e-payment of commercial taxes in Kerala, wherein we are seeing around 60,000 Internet transactions worth Rs 900 to Rs 1,000 crore every month.

Innovative new products and services would be a key differential that would separate nimble-footed and result-oriented banks from laggards. How is SBT measuring up?

SBT has always been in the forefront of bringing in innovative and consumer-friendly products to meet the needs of all segments of customers.

It would not be possible to name all of them. Latest initiatives such as selling gold coins and SBT Gold savings scheme are among such in the large array of our products.

I believe our responsiveness and customer-friendly approach will continue to be the key service differentiator.

Have you been able to reach these products to the customers? What has been the overall response to each?

Definitely. The steady growth achieved over the years is sufficient testimony to the attractiveness and acceptability of our products.

Our extensive network of over 600 branches in Kerala and about 200 outside help us to reach out to a variety of customers and cater to their needs.

What steps does SBT contemplate with regard to emerging challenges on the business environment, especially in IT security and risk management?

SBT has always been in the forefront of implementing technology and modern risk management initiatives.

It was among the first pubic sector banks to implement total computerisation of branches in year 2003 and thereafter migrate fully to a core banking system in 2005.

We also migrated to the Basle II framework, ahead of schedule in March 2008 itself.

I am confident that our bank will not be found wanting in being able to cope with the emerging challenges of Basle III and IFRS etc.

How successful has been SBT's efforts at finding the right mix of assisted and self-service channels aimed at providing the best banking experience to customers?

We have 900 ATMs of our own, which are part of the 25,000-plus State Bank Group network, touching every nook and corner of the country.

ATM transactions are growing at around 18 per cent every year at over Rs 1,500 crore worth of transactions every month. As stated earlier, both Internet and mobile banking transactions are growing even faster now.

Going forward, we expect over half of all transactions would be through self-service channels such as ATM, Internet and mobile banking.

Does SBT intend to further broadbase engagement in three different areas of business enterprise which it has strongly involved in, namely (i) road transport operators (ii) cross-selling and (iii) Government business?

We have a significant portfolio in road transport companies/automobile finance, with tie-ups with all major players for financing customers.

We are corporate agents for SBI Life and Mutual Funds, five other mutual funds, United India Insurance and SBI Cards.

Our income from such cross-selling activities has been steadily growing up every year.

In terms of Government business, we are of course Bankers to the Government of Kerala and a majority of Government transactions are routed through us.

We expect to maintain our dominant position in Government business in Kerala in the years to come, with active support of the Government authorities.

During the next half of the financial year, what will be the bank's strategy on lending to (i) agriculture (ii) SME and MSMEs and (iii) retail loans – housing, car and personal?

As already indicated, I preclude myself from making any forward-looking statements at this point in time. Replies on these areas will have to await another day.

Is there a fresh line of thinking on combating the industry trend of deteriorating asset quality? Would you look at a dedicated mechanism to deal with NPAs?

NPAs are part and parcel of banking business. Exercising effective supervision and control over advances is part of our DNA.

We face greater challenge compared to other banks due to the sheer numbers of our retail portfolio.

One of the new initiatives that we have rolled out is the Asset Tracking Centres (ATCs) where we have a technology that enables outbound calls by our personnel to engage with our borrowers over telephone at their landline/mobile numbers and persuade them to remit their dues in time.

This is beginning to have an impact on improving our recoveries painlessly.

Would you have a new look at the gold loan category, especially after an RBI directive on loans sanctioned to NBFCs for on-lending not eligible for classification under priority lending?

We have traditionally been an active player in gold loans, though volumes have been lower compared to the current times. Our gold loan portfolio is growing at a steady clip now.

We have plans to open exclusive gold loan branches at all district headquarters in Kerala shortly. We expect to carve out a greater share of this segment in the coming months.

We do not have had a sizable exposure to on-lending to NBFCs' gold loans. Hence the RBI directive has had limited impact on us.