WEBVTT - Bank of India Chairman Talks India's Banking Expansion

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. All Right, folks, now,

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<v Speaker 1>let's get to a region of the world that we

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<v Speaker 1>are seeing increasingly catch the attention of investors.

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<v Speaker 2>And that is India. JP Morgan, CEO Jamie diamond says

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<v Speaker 2>there's a substantial opportunity for India as companies look to

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<v Speaker 2>diversify their supply chains away from China. Let's according to

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<v Speaker 2>an interview with US CNBC TV eighteen. He did caution, though,

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<v Speaker 2>that the transition will take years as firms navigate the

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<v Speaker 2>complexities of relocating operations. Increasingly, Carol, we see a growing

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<v Speaker 2>number of stories about companies expanding their presence in India

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<v Speaker 2>and investors certainly making bets there.

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<v Speaker 1>Yeah, I printed out a bunch of them with a

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<v Speaker 1>view on the Indian economy. We are delighted to have

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<v Speaker 1>with us the chairman of the State Bank of India CSSETI,

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<v Speaker 1>which is the largest public sector bank and the biggest

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<v Speaker 1>lender in India. He joins us here in studio, chair

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<v Speaker 1>SETI so nice to have you here on Bloomberg Television

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<v Speaker 1>and Radio. You were in DC. Let's start there for

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<v Speaker 1>the IMF meetings. What if the meetings gave you optimism

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<v Speaker 1>for India and the World War broad and what did not.

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<v Speaker 3>Yeah, thanks for having me on the show. I think

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<v Speaker 3>the positive news which are merged and the IMF matings

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<v Speaker 3>is that global inflation is coming down. I'd say it's

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<v Speaker 3>a good news. While the growth rate seems to be moderate,

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<v Speaker 3>still in the range of three to three point five percent.

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<v Speaker 3>The bright spark, obviously is India, which is expected to

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<v Speaker 3>grow at around seven percent to seven point two percent.

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<v Speaker 3>Even the IMF play places the growth rate out of

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<v Speaker 3>seven percent, the Central Bank of India believes that the

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<v Speaker 3>growth rate could be seven point two percent. I think

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<v Speaker 3>it's a it's a it's a really interesting story which

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<v Speaker 3>is unfolding in India, both in terms of growth trajectory

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<v Speaker 3>which the country is taking on, and the equity market

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<v Speaker 3>is doing well and the inflation is also moderating there

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<v Speaker 3>while the food inflation is still a matter of concern.

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<v Speaker 2>Then, so let's talk about some different sectors of the economy.

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<v Speaker 2>You heard me mention the comments by Jamie Diamond over

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<v Speaker 2>at JP Morgan Chase about supply chains transitioning to India

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<v Speaker 2>on the ground, what can you tell us about that

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<v Speaker 2>actually happening in India right now.

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<v Speaker 3>Yeah, I think there's most visible success stories. Of course,

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<v Speaker 3>Apple twenty five percent of Apple sixteen is produced in India.

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<v Speaker 3>A couple of things which are very seriously being pursued

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<v Speaker 3>by the Government of India is a performance linked incentive

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<v Speaker 3>for various industries, more than sixteen to twenty industries, particularly

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<v Speaker 3>in the areas of electronics and you know, semiconductors. So

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<v Speaker 3>these are the sectors which are getting the performance linked

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<v Speaker 3>incentive from the Government of India. And there's a good

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<v Speaker 3>amount of foreign capital which is coming into these sectors.

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<v Speaker 1>Yeah, and what in particular tell us a little bit

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<v Speaker 1>about that. I think I'm not kidding when we say

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<v Speaker 1>the ton of stories. I have a pile stock stories

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<v Speaker 1>India clipsing China and MSCI Global stock ages to dry flows.

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<v Speaker 1>That was back in mid September. Blackstone sees Asia as

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<v Speaker 1>growth engine, has scale in India.

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<v Speaker 2>Juans and Wong was there last week Brookfield.

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<v Speaker 1>To add to its thirteen billion dollar bet on India's projects.

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<v Speaker 1>So there's so much going on. You point that out.

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<v Speaker 1>We're in particular give us some insight for our Bloomberg audience,

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<v Speaker 1>who's a global audience, but where the money has picked

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<v Speaker 1>up dramatically.

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<v Speaker 3>So the money is mainly coming in the couple of sectors,

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<v Speaker 3>particularly in the renewables. I think there's a huge amount

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<v Speaker 3>of focus with the commitment what India has given under

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<v Speaker 3>the twenty six that you know, by twenty thirty, the

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<v Speaker 3>addition in the renew br energy would be almost five

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<v Speaker 3>hundred gigabytes. That is attracting a lot of attention. And

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<v Speaker 3>the logies sticks is another area, the ware housing, roads, sports,

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<v Speaker 3>These are all the areas which are attracting the global

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<v Speaker 3>investment in a big manner.

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<v Speaker 1>You know, I was in India now like ten twelve

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<v Speaker 1>years ago and one of the things that I found

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<v Speaker 1>so dramatic, and it was a trip that I took

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<v Speaker 1>it like two in the morning with my team. We

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<v Speaker 1>were going to Agra to see the taj Mahal. But

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<v Speaker 1>what was fascinating is that's when you saw everything moving around,

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<v Speaker 1>because that's when the roads were less busy and just

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<v Speaker 1>so much infrastructure moving around. What can you tell us

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<v Speaker 1>too about the infrastructure build out that many have deemed

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<v Speaker 1>so necessary to take India to the next level.

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<v Speaker 3>Absolutely, I think one of the most important requirements for

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<v Speaker 3>Indian economy to continue to grow is strengthening the infrastructure.

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<v Speaker 3>And there are two things which are happening. I think

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<v Speaker 3>there's a significant government expenditure capital expenditure which is focused

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<v Speaker 3>on the infrastructure building up, and there's a private investment

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<v Speaker 3>also is coming in in a big manner. In terms

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<v Speaker 3>of infrastructure, we see a lot of airports being built,

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<v Speaker 3>seaports being strengthened, and road network of course is one

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<v Speaker 3>of the best now in India. And we have dedicated

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<v Speaker 3>freight corridors which are coming in, you know, to enhanced

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<v Speaker 3>the speed of moving the roots from one place to another.

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<v Speaker 2>So I think, yeah, I was just going to say

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<v Speaker 2>we only have a few minutes left, but I want

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<v Speaker 2>to move from the macro to the micro and talk

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<v Speaker 2>a little about your plans over at SBI and where

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<v Speaker 2>you're thinking about expansion in terms of parts that you're

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<v Speaker 2>focused on growing. What are the goals for growth over

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<v Speaker 2>the next six months two years.

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<v Speaker 3>So, as you know, I think in terms of the reach,

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<v Speaker 3>we have one of the best reaches. We have the

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<v Speaker 3>largest network of branches, largest network of ATMs. We have

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<v Speaker 3>served almost five hundred million customers and every Indian family

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<v Speaker 3>in some way you know, is engaged with SBI. We

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<v Speaker 3>have significantly invested in the technology and digitalization in the

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<v Speaker 3>last two three years, and we would like to leverage

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<v Speaker 3>that technology and digitalization to reach the underserved unserved across

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<v Speaker 3>the country. Still, I think, you know, there are a

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<v Speaker 3>lot of banking needs which are unmat in India which

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<v Speaker 3>we want to reach them. And this investment in technology

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<v Speaker 3>and digitalization has helped us to reach the bottom of

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<v Speaker 3>the pyramid in a much lower cost, which means that

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<v Speaker 3>you know, the investment in technology helped us to increase

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<v Speaker 3>our operational efficiency. My focus in the next six months

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<v Speaker 3>would be that how do I leverage the investments of

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<v Speaker 3>what we met in technology to increase the operational efficiency

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<v Speaker 3>and productivity for employees.

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<v Speaker 1>I am curious too that you know, we've noticed too

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<v Speaker 1>that deposits have been challenging for a lot of really

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<v Speaker 1>all Indian lenders for the past few quarters. So your

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<v Speaker 1>strategies that have worked and what else do you plan

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<v Speaker 1>to do what's really worked in terms of building out

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<v Speaker 1>the positive.

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<v Speaker 3>Yeah. One thing, of course is you know, in India,

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<v Speaker 3>despite so much digitalization, Yeah, the physical presence is very

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<v Speaker 3>much important in terms of deposit mobilization, and we have

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<v Speaker 3>the largest physical presence there number two we have.

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<v Speaker 1>Does that mean you continue to build out the physical

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<v Speaker 1>presence we do.

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<v Speaker 3>We want to enter into areas where we know we

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<v Speaker 3>don't have a branch, we would like to set up

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<v Speaker 3>that physical branch. And we have a very strong mobile

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<v Speaker 3>application which is you know currently you will be surprised

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<v Speaker 3>that every day we open fifty to sixty thousand Savings

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<v Speaker 3>Bank account a day, so we have twenty seven percent

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<v Speaker 3>market share and Savings Bank which is the low cost deposits.

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<v Speaker 3>So our focus would be, you know, how to be

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<v Speaker 3>strengthen this franchise and start mobilizing more and more low

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<v Speaker 3>cost deposits.

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<v Speaker 1>And increasingly just got about fifteen seconds. Are they wealthier

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<v Speaker 1>deposits too? That you're noticing a lot of wealth creation

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<v Speaker 1>we're seeing in India and.

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<v Speaker 3>We have largest number of clients who qualify to be

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<v Speaker 3>wealth management customers and we are investing in wealth management technology.

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<v Speaker 1>To reach out to the air AI too. Just quick ya.

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<v Speaker 3>Of course there's a large scale adoption of the I.

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<v Speaker 3>You can't you can't speak about banking without talking about.

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<v Speaker 1>You can't speak about anything it assumes without talking about AI.

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<v Speaker 1>Chair SETI thank you so much. We really appreciate it

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<v Speaker 1>c s Seti, Chairman of the State Bank of India.

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<v Speaker 1>For those who are watching on TV, the closes coming

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<v Speaker 1>your way. Tim and I continue on Business Week