What was the most challenging task for State Bank of India after liberalisation? "Teaching computers to an employee who hasn't seen a machine in his life," says A. Krishna Kumar, its managing director, glancing at his BlackBerry at a meeting on the 18th floor of the bank headquarters in South Mumbai. Imagine the scene then: employees with an average age of over 50, faced with the new demons in their life, struggling to achieve control of the mouse.
|SBI is the largest bank in terms of branches, market cap and profits|
It has a strong presence in rural areas, where growth potential, especially for retail services, is high
Deteriorating asset quality is a concern. Its provisioning for bad assets and other liabilities is not the best in the industry
It lags behind other PSUs and private banks on many operational and effi ciency parameters, such as employee productivity and return on capital
SBI has no significant presence overseas
SBI was no match for the HDFCs and the ICICIs of the country with their young computer-savvy staff and no historical baggage. Today, the tables seem to be turning. SBI is ahead in the new hot spot of mobile banking. "We are probably the largest in terms of volume," says Kumar, who earlier handled the IT portfolio as deputy managing director of the bank. SBI doubled its network by installing a record 10,000 ATMs in 2009/10, a feat of which Kumar is particularly proud.
It helps that the government, representing 59 per cent ownership, brings in the muchneeded capital. Come August 6, the 13-member SBI board will land in New Delhi to meet Finance Minister Pranab Mukherjee. The agenda: the Rs 50,000 crore SBI needs to fund its growth.
But Kumar says the bank is rock steady, despite recent doses of additional provisioning, which dealt a body blow to its net profit. "We absorbed the negative features (provisioning for teaser loans, pension, and so on) of 2010/11 very easily," he says. The focus, under Chairman Pratip Chaudhuri, is also on asset quality and performance parameters like return on capital. Kumar says the bank will look at growth - but not without profitability.