SBI will acquire 1% mkt share every year to become 25% of India’s GDP, says chairman CS Setty

Thank you for giving this opportunity. The YONO launch, while we popularly called it 2.0, is a completely reimagined and redeveloped digital asset. We are very proud that months of effort, with people putting their heart into it, could become a reality. I must compliment my teams. As I mentioned at the launch, this is not a simple mobile application. We have completely reinvented the underlying technology and built it for scale. At least 50% of our customer base eventually has to move to this mobile application or net banking. This is our ambition.

Yes, it is. The multilingual capability makes it more accessible. There is natural traction for this app even among non-SBI customers. But the large population we want to reach requires handholding. We are putting floor managers across almost 10,000 branches — they will manage floor operations in heavy footfall branches and help people onboard and use the app as a self-service channel, explaining the most used features. The ambition is doubling the registered user base from 10 crores to 20 crores, and more importantly, making them actually use the services so they become digitally savvy. The core of this app is security, and we are also giving features where individual customers can choose their own security features.

It's for everyone. The design features are very intuitive, reflecting the diversity in our customer base — from almost 150 million financial inclusion customers to ultra high net worth individuals. We will be building many more features; I think we have 100 more journeys to build. This is also an extension of what we built digitally to expand to all other processes within the bank — what I call simplification. Simplification will be the heart of our processes, focusing on serving both the financial inclusion customer and the wealth and premier banking segments.

Wealth is a natural extension of what we are doing. I don't think subsidiarization in wealth works for our customer base. Customers want good quality banking services coupled with investment products, and they can be better served within the bank. This is not private banking in the conventional sense. We have customers with significant relationship value, and we want to keep them happy with excellent service and investment options based on their risk appetite. Our wealth AUM is predominantly deposit-based at around 4 trillion. Our aspiration is to grow it to a 15 trillion book contributed by wealth and premier banking teams, with at least 4 trillion from investments. We aim to achieve this by 2030.

We would be. But it fits well with our natural business model — combining the trust of SBI with the agility of our internal and market resources to serve customers.

First, I want to clarify — this heading is Moneycontrol's, not mine. When people asked about monetization, I said let us talk about it later. Let us first enjoy the transformation and new experience for customers. But to set the record straight: the value of YONO, if compared with a fintech, is capable of creating value to SBI multifold — potentially 30 billion, 40 billion, though those numbers varied. But I believe YONO and SBI are mutually reinforcing assets; it is very difficult to see them separately. We have built elements in new journeys and technology features that are replicable across the banking industry. If some can be monetized, we will definitely do that. But as a property, YONO is inseparable from SBI.

There are three important areas for any bank beyond wholesale banking. First, are we strong in retail? We are probably the dominant player. Second, wealth and premier banking — we are building the blocks with investments in technology and people. Third is transaction banking. While we built payment applications inside and outside the bank, we did not bring the required convergence. We are now trying to bring all payment systems under one umbrella. SBI Payments as a subsidiary will continue outside the bank, but within, we have half a dozen payment assets — cash management, Fastag, e-payment solutions, and our own payment gateway. We are the only bank with our own payment gateway. From first April, one single unit will manage all payments. These three areas — retail, wealth management, and transaction banking — will be our renewed focus to create other income.

Scale has never been a problem. Our strength is handling scale with efficiency. Scale brings complexity, which requires qualified manpower. I proudly claim we have the largest and best risk and compliance professionals across the bank, with a complete vertical down to the regional office level. Scale is our advantage. People ask about our cost-to-income ratio, but at scale you cannot compromise on cost — you must invest in the right technology, tools, and people. We are bringing efficiencies through digitalization. We doubled in six to seven years and will probably double again — we are talking about 200 lakh crore by 2032. But this is a function of the Indian economy. Our assets of 780 billion dollars are almost 20% of GDP. If India becomes an 8 trillion economy, we would like to be at least 2 trillion — 25% of GDP. The important thing is how you handle complexity. Products, processes, technology can all be replicated, but our strength is people. We keep investing in people, reflected in our attrition rate of less than 0.5%. People make the difference.

The size of a bank is a function of the economy. JP Morgan is 13% of the US economy. Despite being 20% of India's GDP, we are not in global rankings because India needs that scale. India's growth story is SBI's growth story. Our aspiration is to grow from 20% to 25% of GDP. We have to grow faster than GDP — if GDP is 8.2%, we grow at 12%. We are dominant in many micro markets with 40-50% market share in some districts. But if you only defend, you stay at 20%. Our objective is to acquire market share everywhere. The internal directive is simple: in each district, add 1% market share every year. Acquiring share from dominant positions will make us a quarter of the Indian economy.

As the economy grows, the market grows. If you don't acquire in the incremental market, someone takes share from you. We cannot be a sitting duck. We are reimagining through YONO to reach people not banking with SBI. We have done extensive micro-market studies, and while we have a broader bank-level strategy, micro strategies are designed by regional managers who understand where they lack and how to gain share. We leave it to local leadership, and we have seen excellent results.

It's better than expectations, both from an economic perspective and within the bank. The Indian economy has consistently outperformed on growth and inflation. Despite global uncertainties, trade disruptions, and tensions, India stands out as one of the most resilient large economies. SBI has done very well in business levels and protecting margins. We completed a successful capital raise program, each time bettering our previous performance on both equity and debt sides.

An investor looks not only at past performance but at future potential. They are investing in our future. We have consistently engaged with the investor community with an open, transparent, and forward-looking communication strategy. We had not been in the market for seven or eight years, so there was pent-up demand. But our consistent performance and forward-looking narrative have been the key drivers.

That is another highlight. It's not only about a profitable exit from a very difficult entry, but more importantly, we were able to conclude one of the most difficult and different restructuring plans ever attempted in the banking industry. SBI played a very significant role along with other partner banks, with the support of the regulator and the Government of India. It is an example of how collaboration and understanding between various entities can save, restructure, and make available a very big strategic play.

As you mentioned, you don't have to have a common playbook of merger, which is a very important thing. The merger always creates, especially when two disparate entities are sought to be merged, culturally and technologically it always leads to friction. So nobody could imagine that you can have a different playbook and bring that and make it successful. So I think it's a great learning.

It's not about friends or not being friends. I think what we need in the Indian banking industry is very good, strong strategic players. And if capital is a constraint and if somebody is coming with the capital, I think it's a good move. I believe that it will obviously strengthen these banks to do better than what they're currently doing. But another important element is that whoever has come now, the names which you mentioned, they're all very respectable names. In the sense, in their jurisdiction they are fairly large banks with deep pockets and willingness to invest in India. They're not short-term players. So obviously I think it will bring a new energy into the banking sector and those private players can play a significant role. As far as competition, I think competition has never been a concern for State Bank of India because we have a very loyal customer base and people have great amount of trust in our processes, in terms of our services. They may be sometimes unhappy that they're not getting what they are getting elsewhere, but this unhappiness also comes from the fact that they feel their own bank, why my bank is not doing this service. So this kind of loyalty and attachment is the one which drives us. And also as I mentioned repeatedly, the quality workforce what we have, I think can face any competition.

So I think the stage is set now. I hope that the consumption demand sustains. Obviously, both on the fiscal side, whether it is a tax cut for certain segments of people, and GST reforms, rationalization, and on the regulatory side, both in terms of simplifying or removing the overhangs which have been there for many years. In fact, the oldest regulation that was repealed dates back to pre-independence and it was about financing of LCs. There were quite a few of them. Apart from the whole regulations being simplified and rationalized, many things what we have been seeking from RBI have been taken care of. The willingness of RBI to come out with solutions whenever they feel that liquidity is constrained, and the assurance by the governor himself that durable liquidity will be ensured, is a great comfort for the banking industry and it also is helping for monetary transmission. So I think the combination of regulatory and the fiscal measures, in my view, have already set the stage. Hope that this consumption demand will be sustained and which will again propel capital expenditure and better utilization of working capital limits by corporates. So I think there are quite a few things which I'm hopeful that 2026 will be a good year.

So our house view is also, while we believe that 5.25% is a good rate to be in, but if the wider expectation of terminal rate at 5%, there could be potentially another rate cut. We hope not, but I think 5% is a good policy rate to be in, and especially when growth is decent. So if growth concerns are not there, I think this kind of repo rate, either 5% or 5.25%, should be adequate. And we have a very good inflation trajectory, one of the best trajectories which we can visualize. So the combination of modest inflation and a decent growth rate, hopefully we'll see that the inflation also somewhere brings a reason to think whether we're doing the right thing, is it too low? It doesn't support a growth narrative. Most of the modest inflation is also because of food inflation. We'll have to see how it plays out.