Dinesh Khara’s legacy at SBI: Tripling profits, redefining productivity, and cementing global dominance

Dinesh Kumar Khara stepped into the corner office of State Bank of India (SBI) in October 2020, just before he confronted one of the toughest challenges of his career—the devastating second wave of Covid-19. At that time, SBI faced a range of challenges, particularly concerns about how the balance sheet would appear in light of the lockdowns. “Maintaining employee morale and ensuring uninterrupted services in every corner of the country were significant priorities. The approach was collaborative, involving team members and recognising their contributions while aligning them with the organisation’s purpose,” says Khara, who demitted office in August this year. True leadership shines in times of crisis, and Khara’s leadership skills were on full display during that challenging period. His major focus was on asset quality, which was a recurring theme in all his communications to employees. “This wasn’t limited to statements; support from the corporate centre played a crucial role in identifying pitfalls and high-risk geographies. The collaborative effort, coupled with a solutions-oriented approach, helped secure employee commitment and kept the organisation moving forward,” says Khara. The result: during the four years he was at the helm of the country’s largest bank by assets, SBI’s annual profit skyrocketed by 200%, from Rs 20,410 crore in FY21 to a staggering Rs 61,077 crore in FY24, while the net NPA plunged from 1.50% to 0.57% in the same period. In the last four years, the bank has earned a combined net profit of Rs 1.63 lakh crore. The same for the 64 years before that was Rs 1.45 lakh crore. It’s no surprise then that the jury of the BT-KPMG study unanimously chose Khara for this year’s Lifetime Achievement Award. “Khara has always been a diligent professional who believed in delivering results,” says Pallav Mohapatra, MD &amp; CEO of Arcil and Khara’s former colleague at SBI. The higher profits also had a cascading impact on the stock performance. SBI’s market cap rose from Rs 1.75 lakh crore in FY21 to Rs 7.23 lakh crore in FY24. But Khara is not very happy with the market valuations. SBI has a price-to-book (PB) ratio, a measure of valuation for lending businesses, of 1.80 times, whereas the same ratio is nearly double for ICICI Bank, at 3.47 times. HDFC Bank enjoys a PB of 2.89 times, and Axis Bank has 2.15 times. “When we evaluate the price-to-book ratio, it must be viewed in the context of the inherent strengths of the entity. The bank has immense strength in terms of its extensive network, which enables it to raise resources from every corner of the country,” reasons Khara. Under Khara’s leadership, SBI maintained its position among the world’s Top 50 banks by assets. According to S&amp;P Global Market Intelligence’s 2024 report, SBI ranked 47th globally, with HDFC Bank, India’s largest private sector bank, at 74th. Khara’s journey at the bank started from Jaipur. With an MBA from Delhi University, Khara started as a probationary officer in 1984. Those days, bank jobs were among the most coveted, apart from the civil services. Khara’s inclination was towards business and management. Later, Khara was tasked with leading mergers and consolidation at the bank. SBI initiated the consolidation phase as far back as 2008, starting with the merger of Bank of Saurashtra. At the time, there was no guidance, no template—nothing to refer to. Despite this, Khara and his team not only ensured a smooth merger but also created a comprehensive white paper to guide future mergers for other banks. “It was a unique and pioneering assignment,” says Khara. The former SBI chairman studied previous mergers, including the PNB-New Bank of India merger, which involved a Supreme Court case, and the Air India-Indian Airlines merger. “By analysing their pitfalls, we devised strategies to avoid similar challenges, ensuring a seamless process,” says Khara. This proved invaluable when he returned as an MD and was given the responsibility of merging all the associate banks, including Bharatiya Mahila Bank. “We focussed on making the merger smooth and painless while ensuring it created value for the bank,” says Khara. His big break came in November 2013, when he was sent as MD and CEO of SBI Mutual Fund. When he took charge, the entity, which had been stuck at approximately Rs 60,000 crore in assets under management (AUM) for nearly a decade, underwent a remarkable transformation. “Within three years, the AUM had grown to Rs 1.4 lakh crore. Today, SBI Mutual Fund is far ahead of its competitors,” he says. Following this, Khara was brought back to SBI as MD of Corporate Banking &amp; Subsidiaries in August 2016, where he initiated the synergies within the bank. Under Khara’s leadership, two leading subsidiaries, SBI Cards and SBI Life, also tapped the capital market via the IPO route. Towards the fag end of his career, Khara was working on a new version of the bank’s digital banking platform, YONO, where it will be made more modular and faster in terms of processing. Khara’s ambition is to see SBI generating Rs 1 lakh crore in profit after tax. In FY24, it was about Rs 80,000 crore. It is likely to be a reality soon. What after retirement? “I am exploring various options to re-engage in an active role after completing the mandatory cooling-off period,” says Khara. The banking world will undoubtedly watch with great anticipation. @anandadhikari

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Dinesh Khara’s legacy at SBI: Tripling profits, redefining productivity, and cementing global dominance

Dinesh Kumar Khara stewarded SBI through multiple challenges during his tenure, while ensuring that profits tripled, productivity soared, and the bank consolidated its global standing