SBI Chairman foresees democratization of finance through financial inclusion drive

Dinesh Khara, Chairman of State Bank of India (SBI) on Friday said that the ongoing financial inclusion initiative is set to democratize the financial landscape. The initiative has recommended changes spanning ecosystem enhancement, product diversification, and regulatory adjustments.

Leveraging insights from previous years, the SBI Chairman at the B20 Summit stressed the significance of financial inclusion. In the exclusive conversation, he emphasized that credit linkage will play a crucial role, requiring a collective embrace of the credit culture. Expressing strong conviction, he anticipates the widespread adoption of this culture.

The push for digitalization is set to fuel lending to small borrowers through formal banking channels. SBI's introduction of YONO in 2017 marks a step in this direction, with ongoing upgrades to this platform. Established players in the banking sector are actively integrating technology into their operations, aiming to provide digital-centric services.

YONO is an integrated digital banking platform offered by SBI to enable users to access a variety of financial and other services such as flight, train, bus and taxi bookings, online shopping, or medical bill payments. It also has YONO Krishi that integrates online mandis and provides agri info, and credit and investment solutions. It has also created YONO Business to cater to SMEs.

The banking behemoth recently allowed any bank customer to use its YONO app for United Payments Interface (UPI) payments. With ‘YONO for Every Indian’, now any bank customer has access to UPI features like Scan and Pay, Pay by contacts, and request money, among others. Banking analysts have called the initiative a 'game changer'.

However, the Chairman underlined the importance of maintaining a balance between physical and digital services, coining the term "phygital." SBI has proactively upskilled its workforce to ensure a seamless transition into the realm of digital banking.

Regarding economic trends, the Chairman cautioned against considering the July monthly inflation as indicative of a broader trend. He highlighted the banking sector's preparedness in terms of sourcing and underwriting, ensuring sound machinery to manage potential challenges.

Lastly, the Chairman downplayed concerns over unsecured loans, indicating that they aren't as daunting as perceived.