BS Banking Annual 2017: Bhattacharya chosen Banker of the Year unanimously

State Bank of India stands out in digital banking, rural inclusion and management of subsidiaries

For deft handling of the demonetisation rush, battling bad debts but remaining profitable, pushing the financial inclusion agenda through a wide network of its rural and semi-urban branches and at the same time catering to tech-savvy customers through cutting edge digital banking products, India’s largest bank, State Bank of India (SBI), was the star of the Indian banking industry in the financial year 2016-17.

 

It was therefore a relatively easy decision for the distinguished five-member jury to choose Arundhati Bhattacharya, chairman of the bank in the year, as the Business Standard Banker of the Year Award.

 

The jury, chaired by former Economic Affairs secretary and former HDFC Bank chairman C M Vasudev, felt Bhattacharya richly deserved the award. Other members of the jury were former Reserve Bank of India Deputy Governor Anand Sinha, former Bank of Baroda chairman and managing director M D Mallya, IIFL Chairman Nirmal Jain and Ambit Capital Chief Executive Officer Saurabh Mukherjea. The jury’s decision was unanimous. 

 

In the first screening proposed by Business Standard, two filters were used: asset size should have exceeded Rs 500 billion and the bank should have made a profit in 2016-17. The shortlist threw up 18 names with a decent representation across public sector and both old and new banks.

 

The jury then evaluated the financials on various parameters of growth (increase in assets, deposits, credit), profitability (measured by return on assets and return on equity) and quality of assets (non-performing asset ratio), and reduced the list to five banks. SBI was the only public sector lender.

 

The jury then looked at qualitative aspects of the banks and the persons heading them. Since it was the year of demonetisation, relying on dry numbers wouldn’t be the correct approach, the jury felt.

 

Besides, most of the private sector banks failed to find favour with the jury members, because of the wide divergence in non-performing assets found by the Reserve Bank of India auditors. Regulatory fines imposed on banks were a major dampener, too.

 

The jury decided to place the emphasis on financial inclusion, and 64 per cent of SBI’s branches were in rural areas, much higher than its nearest private sector competitor.

 

The jury observed that the bank did not lack on the technology front, and, in fact, SBI’s mobile wallet — Buddy — had more than 10 million users, the highest among all banks. The jury noted that a lot of the users of this application were from semi-urban and rural areas, thereby increasing inclusiveness.

 

The jury also praised the performance of SBI’s three subsidiaries — SBI Life Insurance, SBI Mutual Fund and SBI Cards — on Bhattacharya’s watch. Under Bhattacharya, the parent bank merged five ofubsidiaries and Bharatiya Mahila Bank, but the jury noted that this was driven by the government, rather than the bank management.

 

Where Bhattacharya shone was in her role after demonetisation: she became the de facto spokesperson for the banking industry, while constantly preparing the bank for the big league after the eventual merger with its subsidiaries in April 2017.

 

“There were a number of banks which did well during the year, which the jury took into account. Besides, we also considered regulatory objectives like more digital banking, more inclusive banking, and the performance of subsidiaries. SBI has done outstanding work during the year and the chairman of the bank during that period deserves to be recognised as the Business Standard Banker of the Year,” Vasudev said.

 

“Most of the demonetisation rush was at SBI counters, while Bhattacharya took every opportunity to assuage any apprehension customers may have about their money. This was done while nursing the NPA situation in the bank and running business as usual. Against all odds, Bhattacharya and SBI stand out in this period,” said one of the jury members.

 

“SBI proves that if public sector banks get their act together, they could go places. At a time when income inequality is growing, SBI is providing services to the entire spectrum of its customer base. This is a remarkable achievement and Bhattacharya made it possible,” said another jury member.

 

Rajnish Kumar succeeded Arundhati Bhattacharya after her retirement as the bank’s chairman in October 2017.