State Bank of India (SBI) is, reportedly, planning to develop an automated system that will enable the public sector lender to reduce the operational costs associated with "no frills" or zero balance savings accounts.

State Bank of India operations deputy managing director PK Malhotra was quoted by the Hindu Business Line as saying that the zero balance accounts has increased the bank’s operational expenses, although it has failed to boost the current and savings account (CASA) ratio.

"The CASA is under pressure. We are opening a lot of free savings bank accounts as part of the financial inclusion plans but these have not resulted in improving the CASA. Operational costs have moved up," Malhotra added.

During the fiscal, SBI’s CASA ratio was at 43.58% in the September quarter, compared to 44.95% during the same quarter last fiscal (FY13).

He further explained that accounts, which have been opened through the business correspondent model, represent 34% of the new savings accounts.

According to Malhotra, an automated technology platform is being considered as part of the financial inclusion drive to reduce operational costs.

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In order to boost the operational efficiency across all the banking division, the bank is also planning to invest an appropriate amount, which is expected to increase by nearly 10% during the current financial year.