On 1 October, State Bank of India (SBI) chief Arundhati Bhattacharya\u2019s tenure was extended by one more year, the announcement coming five days ahead of the end of her three-year term.<\/p>\n
It was not entirely unexpected, as SBI is in the process of merging five associate banks with itself as well as the Bharatiya Mahila Bank\u2014launched in 2013 exclusively for economic empowerment of women\u2014and Bhattacharya is probably the most competent person to complete the task. But few would have seen it coming almost a week ahead of her last day in office.<\/p>\n
The government is not known for speed when it comes to the appointment of SBI boss. Her predecessor, Pratip Chaudhuri, had to wait for a week even as a managing director (R. Sridharan) was asked to hold the additional charge of chairman. Chaudhuri\u2019s predecessor, O.P. Bhatt, waited for one month to move into the corner room with a managing director (T.S. Bhattacharya) overseeing the state-run bank\u2019s operations (not as interim chairman though).<\/p>\n
The current SBI chief surprised us on many counts. In SBI\u2019s 211-year history, Bhattacharya is the first woman boss. Hers is also the first instance of an SBI chief getting an extension after the age of 60. She had a fixed three-year term as chairman, exceeding the retirement age (60) but this is not the first such instance in SBI. Bureaucrat D.N. Ghosh was given a four-year term in the second half of 1980s, exceeding the retirement age.<\/p>\n
Similarly, getting an extended term also is not entirely new. R.K. Talwar, the youngest and one of the most efficient chairmen SBI has ever had, got a two-year extension after a three-year term. In her move to the top, she superseded three senior colleagues, but again, that\u2019s not new.<\/p>\n
She calls herself chairman of the bank\u2014not chairperson\u2014but one doesn\u2019t need to read too much into it. On assuming office, she printed her business cards as chairperson but the bank\u2019s legal department advised her against it as the SBI Act does not have any provision for a chairperson.<\/p>\n
When she joined the bank as a probationary officer in 1977, less than 20% of the new officers were women. The figure has doubled now but the percentage is still lower than many of SBI\u2019s private sector peers\u2014among officers, it\u2019s about 17% and among all employees, about 23%.<\/p>\n
She is not fatigued even after spending four decades in SBI as she does not treat her career as one job in one bank but a dozen jobs with different challenges\u2014ranging from working at the foreign exchange wing in Kolkata to a stint in the US and retail banking, corporate banking, treasury, new business, human resources, investment banking in Mumbai and, finally, the assignment of the bank\u2019s chief financial officer before moving to the corner room.<\/p>\n
How has been her report card as chairman? Since she took over in October 2013, it will be fair to look at the bank\u2019s financials in the September 2013 quarter and the June 2016 quarter (SBI is yet to announce its September 2016 earnings).<\/p>\n
Let\u2019s focus on two key parameters: business and bad loans over the last three years, and compare SBI with its peers\u2014two each in public and private sectors\u2014Bank of Baroda (BoB), Punjab National Bank (PNB), HDFC Bank Ltd and ICICI Bank Ltd.<\/p>\n
The growth in SBI\u2019s deposits during this period has been 38% and loans 33%\u2014lower than HDFC Bank, broadly on the lines of PNB and ICICI Bank, and much higher than BoB. On the bad loans front, SBI has done better than all others, including HDFC Bank if we consider the rise of such loans in absolute terms. For instance, SBI\u2019s gross bad loans during this period rose by 58% to Rs1.02 trillion, against a rise of 67% in HDFC Bank, 171% in ICICI Bank, 243% in PNB and 295% in BoB.<\/p>\n
Similarly, after setting aside money, its net bad loans rose 79% to Rs57,421 crore against HDFC Bank\u2019s 88%, BoB\u2019s 229%, PNB\u2019s 272% and ICICI Bank\u2019s 458%. Its gross bad loans as a percentage of total loans rose 1.3 percentage points during this period to 6.94% and net bad loans, by 1.14 percentage points to 4.05%, higher than HDFC Bank but lower than the other three. During this period, the SBI stock rose around 58%, as much as BoB, more than PNB but almost half the rise of HDFC Bank. ICICI Bank stock has lost close to 18%.<\/p>\n
Bhattacharya focussed on three key areas\u2014managing bad loans, raising productivity and leveraging IT to do things smartly. Despite its much larger size, SBI is more nimble-footed than most of its peers on the digital space and probably the most aggressive bank in using social media.<\/p>\n
Bhattacharya\u2019s colleagues like her flexibility in approach to business. An example of that is junking the agreement signed with Gujarat\u2019s Adani Group to build a $7.8 billion coal mine in Australia when she found that it would not be viable\u2014a project announced with much fanfare in Brisbane where Adani Group boss Gautam Adani was accompanying a business delegation for the Group of 20 summit, attended by Prime Minister Narendra Modi.<\/p>\n
She is articulate but not flamboyant. She has strong views on many things which she expresses in closed door meetings with the banking regulator and the finance ministry but, unlike her two immediate predecessors, Chaudhuri and Bhatt, she doesn\u2019t fight openly with the regulator.<\/p>\n
Her colleagues say her biggest strength is that she doesn\u2019t believe in living in a denial mode amid harsh business realities.<\/p>\n
After she took over as boss, every Saturday afternoon, she would hold a meeting on bad loan resolution. At these meetings, which at times stretched till late evening, accountability would be fixed and the executives concerned would need to get back with resolution plans in a week.<\/p>\n
She is also a multi-tasker, and has an eye for micro details but doesn\u2019t miss the macro story.<\/p>\n
None of these attributes may be entirely new for a person who runs the nation\u2019s largest lender but what distinguishes Bhattacharya from others is that she always carries her people along with her, something which many of her predecessors could not do.<\/p>\n","protected":false},"excerpt":{"rendered":"
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