The country’s largest bank, the State of India Bank’s ‘YONO’ super-application, is preparing to offer fast loans for two-wheelers as well as express credit, a high-value personal loan.
Currently, YONO offers small loans with an average size of Rs 2.5 lakh, withdrawals of cash without a card at ATMs, opening savings banks and also generates leads in loans for automobiles and homes.
Pre-approved personal loans are very popular, with disbursements of Rs 21,000 crore plus in 2020-21. These loans are granted to existing customers based on credit history, spending behavior and repayment history.
In fact, a personal loan was the first credit product offered by YONO.
Plans are now to expand the basket of YONO products to other retail loans. The bank is currently testing the execution of digital documents (DDE), which includes a digital signature and other digital infrastructure. High-quality express credit will be a personal loan in the larger ticket category. The amount can be anywhere between Rs 5-10 lakh per borrower.
Likewise, the bank is working on a two-wheel loan through the application. But this facility will be offered in states where digital stamp tax infrastructure is available.
In the future, the bank plans to extend credit products to new customers. The account aggregator system is also coming, which will offer faster access to the customer’s credit history with other banks.
Currently, the YONO APP is already generating leads for car financing and home loans. The app obtained leads for real estate loans of Rs 6,000 crore and Rs 4,000 crore for auto loans in 2020-21. The bank claims that it also sanctioned a total of Rs 10,000 crore as loans through the bank’s physical channel.
The YONO APP offers a great opportunity for banks to switch from a high-cost agency model to an economical app for selling retail loan products. The bank currently disbursed Rs 8.31 lakh crore of retail personal loans at its branches until December 2020. Of these, the home loan had the largest share of Rs 4.84 lakh followed by Rs 1.77 lakh of express credit and Rs 75,937 crore for auto loans.