‘SBI uses analytics to track stress across sectors’ | Rare Techy


MUMBAI : State Bank of India (SBI), the country’s largest lender, wants to use the granular data generated in its branches every day to predict stress and prevent defaults to protect its balance sheet. Accordingly, the state-owned lender is looking for ways to use advanced analytics to analyze data and find patterns that indicate early stress. In an interview, Ashwini Kumar Tewari, director in charge of risk, compliance, and stressed assets at SBI, explained how the bank has digitized its stressed asset management processes. Edited sections:

What types of stress do you see among retail and small business borrowers?

Most of our retail customers are salaried; therefore we do not see any difficulty. Our non-salary group, although small, is facing some stress, but the net amount taken together is fully under control. While the credit to the micro, small and medium enterprise (MSME) segment was clearly affected, our lending parameters to this segment are very strict. As payday lenders, we do not give them a loan amount and the loan amount is lower. Even in the payroll department, people have lost jobs and their wages have been cut, but because we don’t go to low credit score profiles, our overall experience in covid-19 has not been bad.

Has technology helped in solving tight material turnaround times?

For one-time compliance and compliance, we have an open platform where one can apply online instead of coming to a branch. We have an in-house dashboard to track this at an operational level as well as a management level. In this way we can control the rotation time and see the quantum of recovery. The legal team is a key component of the firm’s vertical assets. We have an application called Court Management System with modules like National Company Law Tribunal (NCLT), debt recovery court, and courts. Here, the entire case history is available and, among other things, provides reminders for documents to be updated for the next hearing. We have also digitized the voluntary waste management system.

What are some new technology initiatives your department has planned?

We have a lot of data in the system. It will be useful to use this data not only from a risk perspective, but also to see how things are going in real time in different parts of the country and different sectors. This is an area where we want to use artificial intelligence and machine learning. Indeed, our analytical teams are in risk, product divisions and operational risk areas. We capture all non-performing asset (NPA) data from across the country, including individual account data, and aggregation is done at the circle level. They say that there are problems in the steel sector in a particular state; one way to know is to follow the media reports but does our database show near stress from that area? It needs to be dealt with once it becomes NPA, but if there are early signs of stress, then this can be managed proactively.

Do you think it is faster to resolve stressed debts outside the scope of the Insolvency and Bankruptcy Code (IBC)?

In the few cases where we realized that getting the down payment is important and the process itself may take a long time, it is better to sell to reconstruction companies. I believe there are some changes being considered in the IBC. If they happen, like the pre-packaged nonsense for companies, we might have some other cases better handled. Everyone is talking about lighted cases, but smaller cases 5 thousand or 10 thousand are not in the media. There are cases from branches in tier 3 and tier 4 cities that are doing very well.

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