A few years ago, Mr O. P. Bhatt, who retired ten days ago as chairman of State Bank of India (SBI), the top bank in the country, won an award given by a news organisation.

This award was decided on the basis of popular votes that came in by SMS. A retired senior official of SBI told this correspondent that SBI employees were told to vote for their Chairman — and given their large numbers, he predictably won hands down. This anecdote was accompanied by a disapproving comment about what this great bank was coming to.

It is common for retired officials of any organisation to think that the golden era ended with their tenure and the institution has now fallen into bad times.

So, when one listens to these things all the time, we pass no judgment. Still, one heard the story with mixed feelings.

On the one hand, I was a trifle surprised that someone, least of all an SBI chairman, should want these awards that badly. Put it down to naiveté, if you will. On the other hand, if this story was indeed true, then it showed certain PR savviness that you didn't normally associate with the SBI top brass till then.

IMPRESSIVE ACHIEVEMENTS

In the last few years, Mr Bhatt had managed to match word and deed and push his organisation into a faster growth path. He was granted a five-year tenure, one of the longest in recent times, and rare in recent SBI history which has seen chairmen come and go even before they had warmed their seats.

Putting stability of tenure to good use, Mr Bhatt energised SBI and drove it to top spots in home and car loans — two segments of retail banking that it had completely missed in the preceding many decades.

SBI was a natural leader in corporate banking by virtue of its size and an active player in SME (small and medium enterprise) banking because of its government parentage and developmental goals.

But retail banking required a different approach, which public sector banks were generally slow to pick up. And they yielded rather good ground to private banks such as HDFC Bank, ICICI Bank and Axis Bank. What Mr Bhatt did in his tenure was to show that SBI can be a player to reckon with in all these segments too.

With the economy expected to grow at 10 per cent upwards for the next decade, the demand for homes and cars can only keep growing and ensure SBI is on a strong growth path.

The doubling of branch and ATM networks, the integration of all associate banks that is under way, surviving the global slowdown and the transformation that he brought about in attitude, are an impressive legacy of achievements that he leaves behind.

To be sure, no leader leaves any organisation without creating some new problems.

Often, the frenetic pace set by one leader has to be followed by a calmer period under another leader. The new leader consolidates the gains while also seeking to eliminate some of the weaknesses that got papered over during an earlier growth period.

If you look at SBI's nearest private sector rival — the parallel would be obvious. Ms Chanda Kochhar has had to slow down and consolidate during the past two years after the hectic pace of the Kamath years.

For SBI's new Chairman, Mr Pratip Chaudhuri, consolidation will be the challenge.

He has a two-and-a-half year stint — just the right bit of time to understand the demands of the job, not upset the apple cart, consolidate the gains made earlier and hand over a stronger organisation to the next leader. He has already said that SBI will take a breather.

RELATIONS WITH REGULATOR

Most importantly, Mr Chaudhuri will have to repair SBI's troubled relationship with the regulator — Reserve Bank of India. Mr Bhatt was a journalist's delight — in providing controversial copy.

But in voicing his differences with the regulator with unexpected vehemence on a number of issues, including teaser loans and provisioning requirements, Mr Bhatt may have gone a bit overboard.

That things didn't get worse was due to considerable regulatory forbearance and a high degree of tolerance on the part of RBI top brass.

The RBI has stuck to the position that it cannot engage in any kind of public war with institutions that it regulates or their heads.

Mr Chaudhuri's first priority will be to set this relationship right and ‘engage constructively' with RBI.

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