State Bank of India (SBI), the nation's largest lender, has introduced an innovative strategy to ensure on-time loan repayments—unexpected home visits with a pack of chocolates. This unconventional approach aims to motivate borrowers, particularly those in the retail sector, to fulfill their repayment obligations.
SBI's rationale behind this strategy is grounded in the observation that borrowers on the verge of default often ignore reminder calls from the bank. Therefore, the bank has chosen to proactively visit these borrowers at their residences, catching them by surprise.
This initiative arises against the backdrop of a surge in retail lending and a concurrent increase in delinquency levels, influenced by rising interest rates. SBI's retail loan portfolio expanded by an impressive 16.46% to reach ₹12,04,279 crore in the June 2023 quarter, compared to ₹10,34,111 crore in the same period the previous year. This retail loan segment, which includes personal, auto, home, and education loans, has become the bank's largest asset class. SBI's overall loan portfolio now stands at ₹33,03,731 crore, reflecting a year-on-year growth rate of 13.9%.
SBI holds a dominant position as the largest mortgage lender, with a home loan portfolio exceeding ₹6.3 lakh crore as of June. This innovative approach to loan recovery underscores SBI's commitment to maintaining the integrity of its retail lending portfolio amid evolving economic dynamics.