India's largest lender, State Bank of India will be slashing costs for consumers and shutting unprofitable business as bank is trying to be more nimble-footed than private banks to sustain in the competitive market, said Mr. Pratip Chaudhuri, Chairman of SBI.
Last year, SBI had slashed processing fees and waived off the prepayment penalty on home loans, the bank is again planning to do the same with corporate loans to survive in the hotly contested market.
SBI has scrapped away the prepayment penalty on term loans to attract more customers in an uncertain economic condition.
Mr. Chaudhuri said, "I am against any sort of prepayment fee. Let it go. This will also keep us on edge because you have to be constantly doing well".
The bank has also waiver of the minimum balance and is also promoting multi city cheques. Decision to shut down SBI Global Factors will save bank's capital. Mr. Chaudhuri also took forward the reorganization of credit card business.
Mr. Chaudhuri has tried to tackle the problem of bad loans by increasing provisions, but the problem may grow bigger in the coming years and will have to be dealt with firmly.
The bank's focus will be more on retail sectors like home loan and auto loan to small and medium-scale sectors. Though, the slowdown in economy will weaken the corporate loan demand for some time.