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State Bank of India (SBI) has shelved plans to hive off its super app Yono. It will instead build the app into a wider platform that can be used by rival lenders and add more capabilities to it.

“The potential for monetization is there, but the timeline for monetization is not. Yono has to be extended in a manner that goes beyond SBI," a senior banker aware of the matter said. “We will create a platform for Yono, which will be integrated with regional rural banks or cooperative banks. If they want to use it, they can. That is the larger objective of Yono. We call it the platformization of Yono. That’s a little away."

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Last year, SBI’s former chairman, Rajnish Kumar, said the bank was planning to separate the digital platform and had ascribed a $40 billion valuation for the Yono platform.

Under current SBI chairman Dinesh Kumar Khara, the plan is to turn the app into a platform where all banks, including SBI, can offer their products and services. The idea is that the product will be more valuable to investors once the app is fully built out as a platform.

Yono has helped SBI expand its retail lending and depositor base during the pandemic. The app has seen its user base nearly double to 32 million at the end of December 2020 from 17 million a year ago.

SBI disbursed personal loans worth 15,996 crore through more than 1 million Yono loan accounts between April and December 2020. After the success of personal loans, the bank is now looking to enhance its retail product portfolio by making it easy for home loan customers to complete the entire process online.

SBI is also looking to go big with its multi-lingual Yono Krishi platform, which is offering services such as Yono Khata, Yono Bachat, Yono Mitra and Yono Mandi to its farm customers. Through Yono Krishi, the bank has sanctioned close to 12,000 crore of agriculture loans as of December 2020 and reviewed over 1,500 of Kisan Credit Card customers.

SBI is also looking to expand Yono Business through which it has made it easier for corporate customers to apply for letters of credit and bank guarantees. “Today, Yono is an embedded application. We have to disengage that with some SBI app. While features are there, how do you make it a platform that can float on its own without having the base of SBI. It will take some time. We have to take greater potential out of Yono," the banker cited above said.

To be sure, while Yono has been around for three years, it is yet to make a dent in the share of transactions on the Unified Payments Interface (UPI) platform, which is dominated by Phone Pe and Google Pay.

“Banks have been investing in digital applications...but still working with legacy infra and costs. Next level of competitiveness will come as underlying cost structures are rewired," said Vivek Belgavi, partner, fintech, PwC India

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