Sbi, Associates To Network Banking Operations

The State Bank of India (SBI) and its seven associate banks, including the State Bank of Hyderabad (SBH) are in the process of launching a joint core banking programme involving the setting up of a shared technology platform, Rajesh Kakker, managing director, SBH, said.

The programme will initially network a majority of ATMs of SBI and its associate banks. Later it will network other banking operations with more common facilities.

The networking programme will cover 49 cities initially where the SBI and its associates are operating, Kakker said. SBH has 25 ATMs, which will be increased to 50 by the end of this financial year.

He, however, was not for a merger of SBI and its associates. "All the SBI associates have their own loyalty base and market presence, so the present arrangement is the best," Kakker said.

The bank's focus is on improving the quality of assets and technology inputs. The stress is on low-cost deposits. SBH has shed 50 per cent of its high-cost deposits, bringing the base down by Rs 800 crore.

In another move, Kakker said, the bank is focussing on the small and medium enterprises (SMEs). It is working out a scheme for this sector on the lines of the SBI's SME Plus scheme.

This is because blue-chip companies are not drawing their monies, while the SME segment can provide better margins for the bank.

The SME sector contributes to 50 per cent of India's GDP. Kakker said after the announcement of debt recovery ordinance, the bank has identified over 1,000 defaulters' accounts to whom recovery notices are being issued.

Kakker said SBH has NPAs of 4.97 per cent and a return on assets of 1.02 per cent. In the first quarter ended June 30, 2002, SBH clocked a 44.22 per cent increase in net profit at Rs 61.90 crore compared with Rs 42.92 crore in the first quarter of the same period.