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Rukmani Vishwanath

Sources contend SBI's plan is motivated by the consistent performance of its associates and subsidiaries, which has in large part contributed to the parent's growth in the recent past.

Mumbai , Nov 13

THE subsidiaries and associates of State Bank of India will soon be brought under the charge of a Managing Director.

According to informed sources, the Deputy Managing Director (DMD) of SBI, who heads the associates and subsidiaries business of the bank, Mr Chandan Bhattacharya, might soon be elevated to the position of the second Managing Director of the country's largest bank, as part of a restructuring plan for the bank's top brass.

Significantly, with this promotion, the Corporate Banking Group may no longer have an MD at its helm, as the SBI Act has provision only for one Chairman and two Managing Directors. The move, if implemented, will be a departure from the bank's tradition of having two managing directors, one heading the Corporate Banking Group and the other the National Banking Group.

Sources said, Mr Bhattacharya, the senior-most DMD in the bank, took over the associates and subsidiaries portfolio last month, perhaps as a precursor to his impending promotion.

In fact, the position of Managing Director of the Corporate Banking Group has been lying vacant, ever since the retirement of Mr A.K.Batra, fuelling speculation about who will be his successor.

Last year, Mr P.N. Venkatachalam and Mr Batra were appointed as the Managing Directors of SBI and Mr Venkatachalam continues to be the Managing Director of the National Banking Group. Mr Venkatachalam is due to retire next year, when Mr Ashok Kini, DMD, Information Technology, is tipped to step into his shoes.

Sources contend SBI's plan is motivated by the consistent performance of its associates and subsidiaries, which has in large part contributed to the parent's growth in the recent past.

There is also an anomaly in the hierarchical structure of the bank, which will be corrected when the new plan is implemented. A source close to SBI confided, " the anomaly lies in the fact that the DMD of SBI's associates and subsidiaries group, has some other DMDs reporting to him, i.e, among the Managing Directors of the associates and subsidiaries, some are technically DMDs in the parent bank. Therefore, there is a need to promote the DMD in charge of associates and subsidiaries in SBI to a higher position".

In 1994-95, the international consulting group McKinsey worked out a restructuring programme for SBI. At that time, in keeping with the firm's recommendations, the bank split up in different business units headed by the Chairman and two Managing Directors.

More recently, the consultant was awarded the project of the major business process re-engineering plans of SBIAccording to sources, the consultant found that the Corporate Banking Group, which was set up in the early nineties to expedite large value credit delivery to corporates, has not kept pace with the initial projections, while the associates and subsidiaries have exceeded expectations in terms of performance.

Sources said, " the Corporate Banking Group has helped the bank in achieving certain milestones. However, in the last three years, interest rates have gone down and corporates are raising funds from the market. Even corporates with large funds at their disposal have not been expanding".

According to bankers, the Corporate Banking Group operations has stabilized over the years and does not necessarily need an Managing Director to lead it, and once the economy picks up, so will the business.

If SBI's new Managing Director heads associates and subsidiaries, it is also indicative of the Chairman, Mr A.K. Purwar's focus on `group synergies', sources said.

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