State Bank of India Chairman Rajnish Kumar is highly on the side that ownership of banks – whether they are in the private sector or government agencies – is insignificant, the primary concern is the question of bank governance. He says that privatizing some of the Public Sector Banks (PSBs) is no harm.
Answering questions after delivering the seventh G Ramachandran Memorial Lecture, organized by the Chamber of Commerce and Industry of Southern India through video conferencing, Kumar said he had always held the view that ownership of a bank is not a problem, the imprinting aspect is how it is handled. Also, he adds that ownership of banks is not an issue, whereas the governance of banks is a major problem. So, he says that privatizing is a good option for improving administration and governance.
Kumar said the closure of any company, whether public or private, is against the common man’s and taxpayers’ interests. Recently, after the consolidation of the PSU (Public Sector Undertaking) banks, six large public sector banks can take care of the country’s social sector commitment. Not only that, but the current economic situation differs from that of the 1970swhenthe banking sector nationalization was completed.
The SBI chief also spoke about digital banking that mobile banking could become the most favoured banking platform, even more so than internet banking. It is set to overtake Internet banking in the days ahead. Only nine transactions are made in branches out of 100 at SBI. While transactions at ATMs were around 55 per cent at the time of demonetization, they are now down to about 30 per cent; and now, digital, mobile banking is up from 25-30 per cent to 55 per cent. Internet banking and mobile banking will make a big splurge. The model also makes a lot of economic sense, because the transaction costs are reduced. In branch, for example, transaction costs are less than Rs 60, in ATM Rs 9, in mobile and online than Re 1. If it involves business correspondence, it’s about Rs 13.
Mr Kumar says the lockdown has caused transactions through digital banking to increase. SBI delivered all of its services during COVID without any interruption. Mobile transactions were more or less on par with internet banking transactions. Three years ago, that was not the case.
Asserting that the increase in digital banking is primarily due to the younger generation’s use of mobile phones, Kumar said it will continue to grow. The bank currently has more than 2.7 mobile Crore users and adds 10 lakh users every 10-15 days.
