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SBI’s Manju Agarwal: Our UPI success rates, if not best, must be best in industry

‘When UPI was launched, the idea was not to limit it to P2P transactions. The idea was both for P2P and P2M (person-to-merchant) transactions.’

State Bank of India (SBI) commands pole position in all digital banking channels, with a 52% market share in mobile banking and 30.8% in debit card spends, Manju Agarwal, deputy managing director (corporate strategy and new business), tells Shritama Bose. Edited excerpts:

Tell us how SBI has been taking on the digital challenge.

We are the largest player in internet banking, both in terms of customers on-boarded and volume and value of transactions, and way ahead of competition. Last year, ICICI Bank had said that their total digital turnover was R3 lakh crore. For us, the internet banking turnover alone was R56 lakh crore. In terms of traffic, our internet banking site is ranked fifth among all financial sites globally. In mobile banking transactions, our market share is about 52% in terms of value of transaction. Our wallet, Buddy, has 9.7 million customers today.

We were late entrants in UPI as we had certain reservations with their reconciliation and on-boarding processes. When they (NPCI) promised to modify these two things in Version 2.0, we decided to join. We now have 3.9 million customers transacting through UPI. Our success rates, if not the best, must be the second best in the industry.

In the acquiring space, we have the largest number of PoS terminals. So far as spends on debit cards are concerned, again we are the largest. Our market share in debit card spends has improved from 26.3% to 30.8% over the period of last three to four months.

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We have applications for AadhaarPay and BharatQR ready and are acquiring merchants in a controlled environment.

We have over 11 crore Jan Dhan and no-frills, or small-value, accounts (around 30% of our customer base). Despite that, more than 10% of our total customers have been transacting on internet banking or mobile banking, which I believe is a very good performance. If I add the customers transacting through debit cards, the number will be as high as 30% of our customer base.

Do digital modes of payment continue to be a push product with merchants after demonetisation?

During demonetisation, there was huge demand and they were complaining that they were not given PoS terminals after asking for them. The merchant is not aware that with a smartphone, he can actually accept digital payments. We are trying to make him aware. The kind of acceptance which was there during demonetisation is not there. But, people are still willing to listen to you. To this extent, demonetisation has done a great job.

What will it take for UPI to be adopted by merchants?

When UPI was launched, the idea was not to limit it to P2P transactions. The idea was both for P2P and P2M (person-to-merchant) transactions. But, as of today, there is no clear-cut identification of a transaction as P2P or P2M. For a P2P transaction, the remitter pays if there’s a cost or a charge. In a P2M transaction, it is the merchant who pays. So the whole dynamics of the transaction change. Unless there is a very strong machinery to identify a transaction as P2M or P2P, there will be issues. NPCI is aware of the problem and is working on it.

NPCI says that of 19.16 million people who have downloaded the BHIM app, only 5.1 million have linked it to their bank accounts as most people in the country don’t have their phone numbers seeded into their accounts…

The problem is not that. If I have 300 million accounts, maybe 150 million have given their mobile numbers, but only 10 million have registered for mobile banking with SBI. I have the option to either restrict it (UPI usage) to the 10 million or 150 million or open it to the full 300 million. We have opened our entire customer base to UPI, whereas other banks have opened it up only to their mobile banking customers. This was discussed in a meeting with the principal secretary to the Prime Minister’s Office on February 27 when banks were instructed to open it up to their entire customer base. If that happens, success rates will go up. Bankers must also run a campaign to seed all accounts with mobile numbers.

You have a 30% stake in the upcoming Jio payments bank. What is the progress on that?

The technology platform is getting ready and we should be able to launch it by May.

Last year you launched SBI Exclusif to offer wealth management service to middle-income groups. How much traction are you seeing there?

It has been doing very well. We have not launched it across the country yet. So far, we have done limited launches in six-seven centres. One reason for this was demonetisation, which saw us diverting our energies to that. The fresh AUM (assets under management) we are getting from our existing customers is higher than what we would have expected from them. AUMs are more than R2,400 crore and the average AUM per user is about Rs 75 lakh.

In January 2016, we launched it in Bengaluru. In July, we went to Delhi. After that, we have now covered Mumbai, Pune, Chennai, Hyderabad and Cochin. Maybe some time next year the business can be expanded more. For this, you need specialised skills and these people need to be hired from the market and that’s a time-consuming process. Once we are able to hire these people, we can expand.