SBI may redesign current, savings and salary accounts: Report
An external consultant will be hired for the project and will have to execute it within a year of hiring, the report said, adding that the timeframe, if required, would be extended by another 12 months.
The State Bank of India (SBI) may revamp its current and savings accounts (CASA), salary accounts, and transaction banking businesses, according to a report in Livemint, which cited an internal document of the country's largest bank.
Why the revamp?
Ashish Kumar Choudhary, SBI's Managing Director (retail business and operations), described it as 'a two-pronged strategy'. Speaking to analysts on August 6, Choudhary said, “The first is to acquire new, valuable customers so that the bank can open fresh accounts, and the second is to enhance its relationship with existing customers”.
In a bid to attract customers ahead of the upcoming festive season, several banks have announced limited period offers on deposits.
Traditionally, banks prefer low-cost CASA deposits; while there is no interest on deposits under current account, savings account offers interest at less than 4%, way below the offer of 6% and above by several banks on term deposits.
SBI's CASA deposits grew 6.5% year-on-year (Y-o-Y) to ₹17.7 trillion as of June 30, and its term deposits rose even faster, at 9.3% to ₹21.3 trillion, in the same period.
How will the revamp be carried out?
Citing the internal document, which invited bids for the exercise, the report noted that the public sector institution will hire an external consultant to redesign strategy for these businesses. For this, the consultant will work with SBI's various internal units and circle teams.
SBI aims to complete the project within a year of hiring the consultant; however, if required, the timeframe is extendable by another year.