Job, salary cuts won’t impact SBI much: Chairman

SBI chairman Rajnish Kumar assured shareholders that the likely job cuts and salary reductions in the wake of COVID-19 pandemic will leave ' relatively low level' of stress on the bank as the proportion of business from government and quasigovernment sector is high.

In a letter to the bank's shareholders, Kumar exuded confidence that despite economic headwinds, the robust performance achieved by the country's largest lender State Bank of India (SBI) in 2019-20 will continue in the current financial year.

".despite the economic headwinds, the Bank is well prepared to adjust to the challenges posed by the COVID-19 pandemic. I am more than hopeful that the robust performance achieved in FY20 will continue in FY21 as well," the SBI chairman said.

Observing that the full impact of COVID-19 outbreak will be felt in the current financial year, Kumar said from the bank's point of view, the true impact of COVID pandemic must also consider the behavioral impact on bank's customers, and composition of portfolio, among others.

"For instance, likely job cuts and salary reductions will have relatively low level of stress on account of higher proportion of Govt/ Quasi Govt. sector customers," he said in the letter, as per SBI's annual report.

"As of now, only 21.8% of the customers have availed the benefit of moratorium. Furthermore, the Bank was able to achieve 98% branch operability as well as 91% alternate channel operability during the period of lockdown," Kumar added.