SBI's Bold 2-Year Plan: Massive Core Banking Overhaul Set to Unleash Unprecedented Efficiency!

Banking/Finance

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Updated on 13 Nov 2025, 01:19 pm

State Bank of India (SBI), the nation's largest lender, has announced its intention to fully modernize its core banking infrastructure within the next two years. Ashwini Kumar Tewari, a Managing Director at SBI, elaborated on the bank's strategic approach, which is built on four key pillars:

1. **Hardware Upgrades**: Enhancing the underlying physical infrastructure. 2. **Unix to Linux Migration**: Transitioning the operating system from Unix to the more flexible Linux platform. 3. **Core Hollowing**: Outsourcing specific functions, such as vendor and government payments, to external providers. 4. **Microservices Introduction**: Implementing small, independent services for specific operations like inquiries and accounting.

According to Tewari, these efforts are fundamental to re-architecting SBI's core systems, enabling greater agility and scale. This means the bank will be better equipped to adapt to market changes, handle a higher volume of transactions, and potentially introduce new services more rapidly.

**Impact** This comprehensive modernization is a significant step for SBI, positioning it for future growth and improved operational efficiency. Investors will be watching closely as these upgrades could lead to cost savings, enhanced cybersecurity, and better customer experience, ultimately impacting profitability and market competitiveness.

**Impact Rating**: 7/10

**Difficult Terms**: * **Core banking infrastructure**: The foundational IT systems and software that enable a bank to process daily transactions, manage customer accounts, and handle services like loans and deposits. * **Unix**: A family of multitasking, multi-user computer operating systems known for its stability and power, often used in servers and enterprise environments. * **Linux**: A free and open-source operating system, similar to Unix, widely used for servers and increasingly for desktops, valued for its flexibility and security. * **Externalising functions**: The process of outsourcing specific business processes or IT operations to third-party vendors rather than managing them in-house. * **Microservices**: An architectural approach where a large application is built as a suite of small, independent services that communicate with each other, allowing for easier development, deployment, and scaling of individual components. * **Agility**: The capability of an organization or system to respond quickly and effectively to changes in its environment or requirements. * **Scalability**: The ability of a system, network, or process to handle an increasing amount of work or its potential to be enlarged to accommodate that growth.