Mumbai: State-owned State Bank of India (SBI) has changed its approach of serving corporate clients to one extending beyond supply of credit, its Chairman Rajnish Kumar said on Thursday.
Kumar said the new approach involves giving solutions to a variety of needs of the corporates and their stakeholders like supply chain vendors, distributors and employees.
“Our relationship with corporates was more about giving credit. But, in the past couple of years, we have shifted focus,” Kumar said at an event to announce a tie-up with the country’s largest fast-moving consumer goods firm Hindustan Unilever.
He said corporates have a large ecosystem consisting of their supply chain, logistics and their own employees.
“If we look at them holistically, it is more than the need for money by them. It is the solutions that matters the most,” he said.
Kumar said the tie-up with HUL is a pioneering step and will pave the way for similar relationships where SBI integrates its systems and processes with that of another corporate having a diverse set of stakeholders.
Speaking at the same event, Managing Director Dinesh Kumar Khara, who has been selected by the Banks Board Bureau to succeed Kumar, said the lender has now created a “corporate solutions group” to support such big-ticket clients with their banking and finance needs.
The group is designed to act as a one-stop window for the corporates to come for their needs beyond banking as well, he said.
Bank officials said preparatory work on the tie-up with HUL announced on Thursday began in August last year and culminated in the specific solutions being identified and launched.
As part of the tie-up, the bank will extend an overdraft of Rs 50,000 for retailers registered with HUL on their app and process the requests for the short term credit instantly on its digital banking platform Yono.
The bank will also install point of sale (PoS) machines at the retailers’ end and provide other unified payment interface-based payments solutions to the merchants. It will also look at salary account relationships for HUL’s employee base.
Kumar said the lending to the small retailers will help expand the Mudra loans portfolio for the lender as well.
Both HUL and SBI said the partnership will also have a social impact as many of the stakeholders who will make use of the service will be from the lower strata of the society.
Khara said the bank has created a new ‘financial inclusion and micro markets’ vertical to address the needs of such sections itself.
Meanwhile, answering a question on auto loans, Kumar said credit extended in August and September 2020 is higher than the same two months in the year-ago period.
He added that the overall performance of the bank will be visible in its financial results for the September quarter to be declared on November 2.
