TLDR: SBI Chairman Challa Sreenivasulu Setty highlighted that Public Sector Banks (PSBs) must integrate innovation, resilience, and trust to remain competitive in a rapidly evolving digital banking landscape. He stressed the importance of digitalization, cybersecurity, and adapting to changing customer expectations, citing impressive financial performance and technological advancements within PSBs.
State Bank of India (SBI) Chairman Challa Sreenivasulu Setty recently underscored the critical need for Public Sector Banks (PSBs) to seamlessly blend innovation with unwavering trust to thrive in the face of accelerating digital transformation. Speaking at the AIMA’s (All India Management Association) 52nd National Management Convention in New Delhi, Setty emphasized that evolving customer expectations pose a challenge far greater than competition from fintech companies.
Setty highlighted the dramatic shift in customer demands, stating, “The transition in customer expectations has been extraordinary, from simply being happy to get a bank account, to expecting account opening in three days, then four hours, and now within 20 minutes.” He asserted that banks, as inherently complex organizations, must continuously adapt their service models to maintain relevance in this dynamic environment.
Despite the rapid pace of digitalization, Setty firmly believes that banking fundamentally remains a “people business.” He articulated this philosophy by saying, “Algorithms cannot replace empathy, codes cannot replicate human understanding. The winning model will be high-tech with high-touch, where digital speed meets human values.”
Setty also presented compelling data showcasing the significant strides made by PSBs. In the financial year 2025 (FY25), PSBs collectively reported a record net profit of ₹1.78 trillion, marking a substantial 26 percent increase over the previous year. Furthermore, gross Non-Performing Assets (NPAs) plummeted to a historic low of 0.52 percent. While credit growth moderated, it remained robust at 12.2 percent in FY25.
Illustrating the technological demands on PSBs, Setty pointed to SBI’s extensive engagement with the Unified Payments Interface (UPI) platform. “On the UPI platform alone, SBI handles 180 million transactions every day. During IPL season, volumes surge to 220 million transactions per day, a spike that must be managed within a two-hour window,” he explained, stressing that such surges necessitate highly advanced and resilient technology infrastructures.
He attributed these advancements to the government’s Enhanced Access and Service Excellence (EASE) programme, now in its eighth iteration. This initiative has propelled PSBs to reorient their operations across various domains, including customer service, risk management, and workforce readiness. The reforms have fostered the adoption of cutting-edge technologies such as Artificial Intelligence (AI), automation, advanced analytics, and sophisticated customer-engagement tools. Notably, Setty mentioned the promotion of stronger data governance and even the sandboxing of generative AI use cases within the sector.
Looking ahead, Setty identified five pivotal shifts that will shape the future of banking: proactively anticipating customer needs, developing cost-effective cross-border solutions, cultivating deeper partnerships with fintech firms, strengthening compliance frameworks, and leveraging cybersecurity as a key competitive differentiator. He emphasized that “Customers don’t care who builds the technology, they care about seamless experiences. Collaboration will be the way forward.”
Cybersecurity, according to Setty, demands unceasing vigilance. He cited the Economic Survey 2024-25, which revealed that nearly one-fifth of all reported cyber incidents in India affect financial institutions. Additionally, Setty advocated for the replacement of aging mainframes with greener, modular digital infrastructures, a move expected to reduce both operational costs and the sector’s carbon footprint.
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Setty concluded with a confident outlook, predicting India’s emergence as the world’s largest digital banking market, with PSBs playing a leading role. He reiterated his core message: “Technology may be integral, but trust will always be the true currency of banking. The future will belong to those institutions that combine innovation with resilience, and digital capabilities with human touch.”
