SBI TAPS TECH TO BOOST PROFITS
Fortune India|July 2024
India's biggest lender banks on technology to grow in the face of onslaught by fintech players and private banks.
RAGHU MOHAN
SBI TAPS TECH TO BOOST PROFITS

LAST MONTH, State Bank of India (SBI) chairman Dinesh Khara said the bank will recruit 12,000 probationary officers and associates this fiscal. A whopping 85% will be engineering graduates. While Khara said this is in keeping with the bank’s thrust on technology and not an indication of a “bias towards engineers,” we have to look at the strands at play here— the biggest being the rapid adoption of technology in banking—to fully appreciate SBI’s moves.

But before that, here are the headline numbers. SBI reported a 21.59% rise in standalone net profit to ₹61,077 crore in FY24. Operating profit rose 12% to ₹93,797 crore. Market share of deposits and advances was 22.55% and 19.06%, respectively. This achievement should be seen in the light of the overall share of state-run banks. According to the Trend and Progress of Banking in India FY23, the share of state-run banks in consolidated banking sector balance sheet fell from 58.6% in FY22 to 57.6% in FY23 while the share of private banks rose from 34% to 34.7%. During this period, state-run banks accounted for 61.4% deposits and 57.9% advances. This tells you about the centrality of SBI in India’s banking sector.

Technology & People

The reasons for massive hiring of technology talent have been clear for a while. Legacy banks are up against fintech players, whose technologies are reshaping frontiers, both in retail and corporate banking. In the background is the regulatory aspect. Reserve Bank of India (RBI) has of late come down heavily on regulated entities it believes have invested inadequately in technology and processes, leading to downtimes, outages and inconvenience to customers. SBI has read the tea leaves.

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Esta historia es de la edición July 2024 de Fortune India.

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