State Bank of India (SBI) is setting its sights on India’s wealthy, reportedly roping in 2,000 relationship managers to capture a share of the nation’s growing financial assets.
With an increasing number of affluent individuals, SBI aims to transform its wealth management approach to better serve this lucrative market.
Chairman Dinesh Khara said the move is aimed at rejuvenating the lender’s wealth management unit. “We manufacture all the products in the financial sector and have the largest distribution network,” Khara said.
He highlighted SBI’s capacity to directly reach customers without the need for external partnerships. However, he did not disclose the bank’s current assets under management.
SBI, which boasts over 22,500 branches across India, is stepping up its game amidst stiff competition from both global players like HSBC and Barclays and local firms such as 360 One WAM Ltd., ICICI Bank, and Axis Bank.
This move comes as India saw a record $590 billion increase in new financial wealth in 2023, according to the Boston Consulting Group.
Despite its massive branch network and new wealth management push, SBI faces challenges. The bank reported an 8.2 percent year-on-year deposit growth for the April-June period, one of the lowest in the industry and significantly behind its 15 percent loan growth. For FY25, SBI expects credit to expand by 14-15 percent, with deposits also showing double-digit growth.
Khara remains confident about managing the gap between credit and deposit growth, thanks to SBI’s excess liquidity of ₹3.7 trillion. “We don’t have any liquidity challenge for the simple reason that we have got excess liquidity — excess SLR to that in about ₹3.7 trillion,” he explained. This liquidity stems from SBI’s holdings of government bonds under statutory liquidity ratio (SLR) requirements, which exceed the mandatory 18 percent.
While offloading government bonds to meet credit demand can be complex, SBI’s investment strategy aims to minimize the impact of adverse market conditions. By adjusting its SLR holdings and strategically extending credit, SBI plans to maintain robust growth without compromising liquidity.
