O N T E N T S
but not out
The poor offtake of retail loans has pulled down
After a sharp reduction in the last three years,
NPAs are creeping back into banks balance sheets
vote for the future
A distinguished Jury picks State Bank of India Chairman
O P Bhatt as the Business Standard Banker of the year
Seven top bankers discuss 2009: Are banks in
India ready for it?
R for restraint
Cases of coercion and violence are forcing banks
to soften their approach towards debt recovery
RBI has softened its stand on co-operative banks,
but the guidelines are still strict
All the data you wanted on banks
have put corporate financing on the superfast track'
Chairman O P Bhatt speaks to Shyamal Majumdar
on how he plans to grow the banks balance sheet to $250 billion,
in two years, from $150 billion now.
Jury, which chose the Banker of the Year, said they are voting for
the future even though SBIs numbers arent that impressive.
When you took over as Chairman in July last year, you had said one
of your priorities was to reverse the banks slipping market
share. Whats the progress?
am delighted with the Jurys remarks that they are voting for
the future. Thats saying a lot for a bank which is 200 years
old. In the last 18 months, I have been trying to position the bank
as a national champion for Indian industry and all other sections
of society. The positioning I have in mind is similar to what ICBC
has achieved for Chinese companies and people.
market share, we have been fairly successful it was slipping
till September 2006 but we have been able to reverse it. Till October
this year, our market share in deposits has gone up by 61 basis
points and advances by 11 basis points. Thats a substantial
increase.But I cant throw profitability to the winds for market
share; thats not what banking should be.
your numbers still dont reflect the growth that you are claiming.
financial numbers for 2006-07 may not reflect the progress we have
made but the point is that 75 per cent of our profit in the previous
year was because of one-off items. So, from this context, our performance
in 2006-07 was three times better than that in the previous year.
you worried about 2009 when foreign banks are expected to get more
are fighting back even within the constraints. The government has
also bought into the transformation of SBI by putting in Rs 10,000
crore via the rights issue. But my feeling is the Indian banking
industry isnt doing much in the run-up to 2009; the buzz is
missing. But SBI is doing a lot. Our balance sheet should grow to
$ 250 billion in two years from $150 billion now.
are also bringing in huge structural changes. For example, our MD
is also the Chief Credit & Risk Officer. This is a model followed
by the best banks. The role of the CC&RO wont be day-to-day
loan disbursals, but to align our risk management systems with global
benchmarks. When such a crucial function is headed by the MD of
the bank, the job profile gets the importance it deserves.
SBI needs to scale up its size to fund mega acquisitions of companies.
Indian companies have ambitious plans for acquisitions and we need
to be big. We have started the process of merging our associate
banks, which together form the second-largest bank. So, the second
largest bank will merge with the largest bank. This will take up
to two years.We are also not averse to acquiring banks in India
or abroad. Its not necessary to buy a big foreign bank. A
substantial stake which gives us a say in policy decisions should
need to be able to raise resources, if we are to remain the number
one provider of M&A financing. A foreign acquisition will help
and there are opportunities because the US seems to have become
the biggest emerging market in the world after the sub-prime
crisis. Many financial sector entities there have seen their valuations
dip by over 40 per cent. But we have to be careful.
did you manage the SBI bureaucracy to clear the part-financing of
the Tata groups acquisition of Corus in just an hour?