State Bank of India (SBI) has started digitising its legacy stressed asset monitoring system, the last major manual business vertical at the lender, to enhance recovery and oversight. The new system is expected to be operational by January 2027, according to a senior bank official. This move follows SBI's significant improvement in asset quality over recent years, though it still manages a sizable pool of older stressed accounts, mostly unclassified, according to livemint.com.
The digitisation initiative aims to replace SBI's manual tracking of legacy stressed assets with a fully digital system. This step is part of the bank’s broader strategy to improve asset recovery processes and reduce operational inefficiencies. The official familiar with the development noted that this is the final major vertical within SBI yet to be digitised, marking a significant operational upgrade. The bank has been steadily enhancing its asset quality, and this digital transition is expected to accelerate recovery efforts.
SBI’s move to digitise stressed asset monitoring aligns with broader trends in the Indian banking sector, where digital transformation is increasingly leveraged to manage non-performing assets (NPAs). Comparable efforts by other large banks have shown improvements in recovery rates and operational transparency. SBI’s initiative could set a benchmark for legacy asset management, potentially influencing how other lenders handle older stressed loans, which remain a challenge despite overall improvements in asset quality.
The digitisation system is scheduled to go live by January 2027, according to the senior bank official. This timeline sets a clear target for SBI’s operational teams to complete the transition from manual to digital monitoring of stressed assets, aiming to boost recoveries and enhance oversight of legacy loans.