You are here: Home » Finance » News » Banks
Business Standard

SBI to raise share of financial inclusion to 20% by March 2022

To cut C/I ratio to 38%; hive off client servicing to BC channel

sbi | Financial Inclusion

Abhijit Lele  |  Mumbai 

Around 8,000 branches in rural and semi-urban areas have been identified for providing specialised services to the micro-segment

State Bank of India (SBI) expects to raise the share of the newly created business vertical — and micro-markets (FI&MM) — from the current 12 per cent to 20 per cent by March 2022.

The emphasis will be on enhancing income-generation work (deposits and loans) at around 8,000 branches under the FI&MM vertical. This will be completed once customer servicing — currently handled by the branches — is shifted to the business correspondents (BC) network to bring down the cost-to-income (C/I) ratio.

had recently created a separate FI&MM vertical within the bank with an exclusive focus on rural and semi-urban areas to improve customer experience in the hinterland.

Under this newly launched vertical, the bank will offer loans predominantly for agriculture and allied activities and micro/small enterprises.

Around 8,000 branches in rural and semi-urban areas have been identified for providing specialised services to the micro-segment, including micro-credit for small businesses and farmers.

C S Setty, managing director (retail and digital banking), SBI, expects the bank’s FI&MM division to contribute 20 per cent to the business - covering both advances and deposits - by the end of the next financial year (March 2022).

The implementation of the FI&MM got delayed due to the back-to-back nationwide lockdowns imposed by the Centre to curb the spread of the novel coronavirus.


will also look at expanding the number of customer service points (CSPs) — or bank mitras — for its vertical to 75,000 by March-end, from the current 64,000 CSPs.

The bank will optimise the BC channel to manage costs better. The cost structure for branches under FI&MM will not be any different from the regular retail network.

Today, many of the 8,000 branches are engaged in servicing the customer where digital adoption is slower. “We will have the information technology (IT) to improve the performance of the BC channel,” added Setty.

It will leverage its BC network for collections and recoveries, and generate leads for agriculture gold loans.

These functions will need IT enablement. The bank will augment the technological wherewithal of the BC channel (with 66,508 outlets as of end-September) to reduce the burden on branches. So, customer acquisition and transaction cost will be vastly reduced. This is expected to bring down the FI&MM branch’s C/I ratio to 38 per cent, from the current 55 per cent.

At present, the bank has not decided upon a definite timeline to reach the 38-per cent level since the transition involves external features. The bank will factor in issues like training of BCs and then roll out the technology.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, November 09 2020. 18:00 IST