State Bank of India (SBI) is working on a project to take advantage of big data to solve key issues related to borrowers and predicting defaults.
As country’s largest repository of financial information, SBI is looking at how big data, or analysis of large pool of seemingly unstructured data, can help foresee standard borrowers could turn wilful defaulters, SBI deputy managing director, P K Malhotra told dna.
“Willful default bothers us most and it is an area where we are putting in some kind of technology interventions. It is some kind of data mining, capturing of trends and elements of artificial intelligence,” Malhotra said.
The analytical tool would study trends coming from cash flows of customers and other financial information.
A borrower who fails to repay a loan despite having the capacity to do so or diverts the money or siphons it off is declared a wilful defaulter. Accounting for about 20% of financial assets that exists in country’s formal banking system, SBI alone has to recover Rs 9,580 crore, or 41% of the total dues of all wilful defaulters.
Between 2011and 2013, SBI identified about 660 wilful defaulters with loans aggregating to Rs.5,700 crore. SBI is also taking help of information technology to develop an automated system that would minimise the cost of zero-balance saving accounts that has been adding to higher cost but not resulting in improving bank’s CASA (Current Account Savings Accounts) ratio.
“CASA is under pressure as we are opening a lot of free saving account as part of financial inclusion and now these carry a cost. But we are trying to address this,” Malhotra said.