| 36 | | 37 | INTERVIEW: STATE BANK OF INDIA Programming Interfaces (APIs), and standards, to which all financial sector players can connect in a ‘plug and play’ model. This initiative simplifies the integration of vital financial data through open APIs and boosts operational efficiency. Centralizing potential borrowers' information on a unified platform streamlines processes. During the pilot program, the platform will focus on products such as Kisan Credit Card (KCC) loans of up to Rs 1.6 lakh per borrower, dairy loans, MSME loans (without collateral), personal loans, and home loans through participating banks. As the bank with unmatched presence across the rural and non-urban areas, SBI remains fully geared to usher in value to target communities, particularly small and marginal farmers. On pilot basis, we are launching the first phase of this project in January, going live in three large states namely Maharashtra, Uttar Pradesh, and Madhya Pradesh to disburse loans digitally. The India Stack is winning global eyeballs. One of the innovations based on the India Stack, UPI, is beginning to grow a global footprint. How do you see this export of soft power from India? The latest sectoral data shows that annual credit growth at the end of October 2023 rose by 17.5% to agriculture and allied activities; to services sector by 20.1% with ‘nonbanking financial companies (NBFCs)’ and ‘trade’ being the major contributors; and for personal loans by 18.0%. Credit to industry too is showing signs of a pick-up and grew by 5.9% during this period. With corporates signalling their intent to step-up capex and taking into account the credit demand in pipeline, we see an increase in credit offtake in coming quarters. Reserve Bank of India (RBI) is pushing for friction-less credit and has recently launched a pilot. How is your bank readying for this? RBI launched a pilot project in the form of a public tech platform on 17 August to ease access to credit. This move is aimed at providing digital information to lenders to facilitate credit or loans in just a few minutes. This platform for frictionless credit is an end-to-end digital platform that has been developed by the Reserve Bank Innovation Hub, a wholly owned subsidiary of the central bank. The platform will also have an open architecture, open Application ‘Cross border payments will see a major boost due to internationalization of UPI’ The banking sector today is once again healthy — at a time when business sentiments are reviving. Are you beginning to see an uptick in credit? Credit growth continues to grow in double digits and has become broad based across sectors. ASCB’s annual credit growth has been accelerating since early 2022. In 2023-24, ASCB’s credit grew by around 20.6% at the end of midNovember--compared to 17.2% in the same period last year. Some of this year growth is due to merger of HDFC with HDFC Bank. If we exclude HDFC data, the credit growth at 16.2% is quite healthy. Going forward, SBI is looking at a credit growth of 1415% in 2023-24, broadly in sync with the systemic growth. What is the nature of this credit growth? Credit growth has been broad based. It is interesting that credit demand from rural and semi-urban areas are accelerating. Working capital loans of the industry is witnessing double digit growth. Personal loans have continued to increase at a higher rate. The share of personal loans in bank credit has successively increased to over 30% from 22% five years ago. Dinesh Khara Chairman, State Bank of India Credit growth continues to grow in double digits and has become broad based across sectors. When the November issue of Banker magazine makes UPI its cover story it is not soft power but hard power. Perfecting a technology and making it scalable in short time is an accomplishment that UPI has achieved. Today UPI has achieved transactions in excess of ₹1 trillion. It is active in Singapore, Belgium, the Netherlands, Luxembourg, Switzerland and France. It may soon be rolled out in Nepal. If one looks at growth of UPI outside India, it is mostly to offer cheap and efficient mode of money transfer for Indians abroad. It is not intended to compete with home country payment systems. With digital rupee being perfected in coming years, UPI is bound to see another jump. Commercial payment particularly cross border payments will see a major boost due to internationalization of UPI. In the last decade, India has banked over 400 million people. How do you see this playing out for the economy? The Indian government has taken several steps to promote financial inclusion in the country, including launching the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme, which aims to provide every household in India with a bank account and access to other financial services. The government has also promoted the use of technology, such as mobile banking and digital transactions, to reach remote and underserved populations. These initiatives aim to improve the economic well-being and financial stability of individuals and to bring the unbanked into the formal financial system. Access to the appropriate financial products and services to the deprived section of the society and bringing them into the mainstream for development activities is the pre-requisite for economic growth. And financial inclusion plays an important role in attaining the holistic economic growth in India. Various empirical results validate the positive and significant impact of financial inclusion on GDP. •
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