The State Bank of India’s chairman Rajnish Kumar has revealed that the bank is planning to spilt up its digital platform Yono into a separate subsidiary. Yono or You Only Need One App is the SBI’s integrated banking platform.
"We are in discussions with all our partners to hive it (Yono) off as a separate subsidiary," Kumar said at an annual banking and finance conference - Sibos 2020, organised by the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Post Yono obtaining its independent entity, SBI could even become one among its users, he said adding that discussions were at a embryonic stage and a valuation exercise for the entity was pending. Furthermore, Yono’s valuation is estimated to be $40 billion.
Rajnish further clarified, "The statement (on valuation of Yono) which I made was that if I look at valuations of all start-ups and compare, then definitely Yono should not be less than USD 40 billion. As of now, we have not done any valuation exercise but that is what I believe is the potential."
Post its launch, Yono has 26 million registered users. It witnesses 5.5 million logins per day along with more than 4,000 daily disbursals of personal loans and 16,000 Yono Krishi Agri Gold loans.
In August this year, the RBI had released a framework for authorisation of a pan-India umbrella entity for retail payments. The last date for submitting the application for the same to the RBI is February 26, 2021.
Rajnish states, "We are very seriously considering it. SBI can naturally lead the process by virtue of being the largest player in the payment space in the country. We are actively devoting our time and attention and will be in a position to take a firm view within the next few months but well before February 2021, which is the last date for applying to RBI.”
Currently, the National Payments Corporation of India (NPCI) is the only retail payment entity in the country.
"Presently, the dependence is only on one entity. That is where RBI is thinking about more players which will bring in competition and innovation and ultimately benefit the payment system in the country," Rajnish said.
He also said the pandemic has accelerated the pace of digitisation and the need for contactless banking has gone up.
According to Rajnish, footfall at branches has come down and there is a huge shift in the pattern of transactions."Seven out of 100 transactions happen only at branches. The percentage of ATM transaction, which was a very popular mode of transaction, has come down from 55 per cent to 29 per cent in the last three years."