Money & Banking

For SBI, reviving credit growth will be top priority: Rajnish Kumar

Mumbai | Updated on January 08, 2018 Published on October 05, 2017

RAJNISH KUMAR, Chairman-designate, SBI

Newly appointed chairman of State Bank of India, Rajnish Kumar, speaks during a news conference in Mumbai, on October 5, 2017. Photo: REUTERS/Shailesh Andrade

Newly appointed chairman of State Bank of India (SBI), Rajnish Kumar speaks during a news conference in Mumbai, India October 5, 2017. REUTERS/Shailesh Andrade

Resolving stressed assets, digitisation also high on agenda: Chairman-designate

Reviving credit growth and resolution of stressed assets will be the top priority for State Bank of India, according to Rajnish Kumar, who is set to take charge as Chairman of the bank on October 7.

A digital transformation to ready the bank for the future will continue to get attention, said Kumar, who is currently Managing Director (National Banking Group), SBI, in a conference call with the media.

He observed that India’s largest bank is in the process of revamping its human resources, including skill development, performance improvement and succession planning, in a major way.

“SBI is systems and process driven…I will be reviewing (in the next 30 days) all the action plans (short-term and long-term) already happening in the bank — what is working, what is not — and what is the course correction that is required,” he said.

Merger process

Kumar said that after amalgamation of the five associate banks and the Bharatiya Mahila Bank with SBI, the latter so far has merged a shade under 1,000 branches with nearby branches and there may be 200-300 branches more that will be merged. A major part of the branch merger process has been taken care of.

He emphasised that the bank does not discriminate between SBI employees and erstwhile associate bank employees. Both are treated at par.

External benchmarks

Regarding RBI’s proposal to link lending rates with external benchmarks, Kumar said the benchmark rate should apply to both assets and liabilities.

He explained that “it cannot be a one-sided affair… Any change in the methodology should ensure that the pricing of the loan product and liability product will have to move in tandem.”

Emphasising that the margin (net interest margin) needs to be sufficient to take care of credit costs, Kumar said his bank is all for transparency in the pricing regime of loans.

“If we have any cushion whatsoever to pass on the (interest rate) benefit to the customer. We will do it proactively. But, at the same time, we have to recover our credit costs,” he added.

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Published on October 05, 2017
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