Likely Job Cuts, Salary Reductions To Have a Relatively Low Impact On SBI: Chairman

SBIBecause the proportion of business from government and the quasi-government sector, Rajnish Kumar the SBI Chairman has assured shareholders that job cuts and reduction of the salary due to a pandemic will leave the bank with a relatively low level of stress.

Despite the clouds over economic growth, State Bank of India will continue to achieve great performance as it did in 2019-20, SBI Chairman said in a letter to the bank shareholders.

The Chairman of the SBI also said, “Despite the economic headwinds, the Bank is well prepared to adjust to the challenges posed by the COVID-19 pandemic. I am more than hopeful that the robust performance achieved in FY20 will continue in FY21 as well”.

The impact of COVID-19 will also have to consider the bank’s customers’ behavioral impact and portfolio composition before its impact on this year can be calculated, said by the Chairman.

In the annual report of SBI, the SBI chairman said, “For instance, likely job cuts and salary reductions will have a relatively low level of stress on account of a higher proportion of Govt/ Quasi Govt. sector customers”.

He also added, “As of now, only 21.8 percent of the customers have availed the benefit of the moratorium. Furthermore, the Bank was able to achieve 98 percent branch operability as well as 91 percent alternate channel operability during the period of lockdown”.

Kumar also added  that an elaborate Business Continuity Plan (BCP) is also in place to manage disruptions.

The annual report also mentioned that traditionally SBI has been the banker of choice to the GOI and major Central Government Ministries and Departments look at SBI as the accredited banker.

The report also mentioned that the State Bank of India contributes significantly towards e-governance initiatives taken by the Government of India and also helps in the development of e-solutions for both the Central and State governments.

Kumar also added, “This has facilitated their transition to the online mode, providing greater efficiency and transparency, resulting in ease of doing business and relaxation of living for the citizens”.

Rs 52,62,643 crore was the State Bank of India’s total government business turnover during fiscal 2019-20.

Rs 14,488 crore in 2019-20 was the highest yearly net profit the bank has ever achieved and Rs 862 crore was the net profit during 2018-19.

Kumar also said, due to the pandemic there is uncertainty in the global economy and its impact will be seen next year.

Also, there will be a contraction in the Indian economy, as expected by RBI during the current financial year.

Customer preference has changed and it presents a big opportunity for the bank because now executing banking transactions with the use of digital platforms will be more acceptable, he said.

The bank will also scale up YONO and in the next 6 months will also set a target to double user registrations, and will provide various products such as pre-approved car loans, end-to-end home loans, and personal gold loans to further pre-approved car loan to further strengthen the platform.

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