Mission Accomplished

By Abhijit Lele


Despite his run-ins with RBI, the State Bank of India chairman has managed to keep the public sector behemoth ahead of peers

'WHAT POWER DOES AN SBI CHAIRMAN ENJOY? IN ANY CASE, I AM A SIMPLE GADHWALI. NO ONE KNEW ME AND I DIDN'T HAVE ANY POLITICAL PATRONAGE, EITHER. SO, I COULD EASILY BE REMOVED IF I HAD DONE ANYTHING WRONG'

OM PRAKASH BHATT

Chairman, State Bank of India (At the World Economic Forum in Davos recently)

Despite his run-ins with RBI, the State Bank of India chairman has managed to keep the public sector behemoth ahead of peers.

The chairman’s angst sums up the public display of the uneasy relationship between the country’s largest bank — State Bank of India — and the Reserve Bank of India (RBI), in the last couple of years over several issues, including the so-called teaser home loan rates (Bhatt, of course, has serious reservations over the term. He says he is not teasing anybody), higher provisioning coverage, guarantee to bonds issued by Tata Motors, etc. But more of that, later.

Even his worst detractors can’t deny that Bhatt, who is due to retire in March after a five-year term, has been able to turn SBI from a lethargic elephant to one that can dance.

When he took over the reins in June 2006, the usual lament about SBI was: “It is too slow and past its prime. Soon, the nimble-footed private banks will go ahead.”

The numbers supported this argument. ICICI Bank was a serious threat.

In June 2006, SBI’s total business stood at Rs 639,817 crore. ICICI, though behind, was closing in with a much faster growth rate. Its total business stood at Rs 330,490 crore. Analysts assumed it was only a matter of time – may be, another five years – before the private sector bank became the number-one bank in the country.

Bhatt’s appointment wasn’t a smooth affair, either. Yogesh Agarwal, then managing director of State Bank of Patialia, was considered a strong contender for the top position. But Bhatt pipped him to the post. Though Agarwal became the managing director of SBI in October, he moved to head IDBI Bank in July 2007.

Internally, the bank was grappling with many issues. For one, it had serious software problems that were not allowing it to roll out core banking solutions. This had to be addressed on a war footing, since core banking solutions were the backbone required for any scaling up and offering value-added services to corporate clients. Bhatt evaluated the situation for the first three months. Then, he asked the software vendor, Tata Consultancy Services, to rectify the glitches.

Then, the business process re-engineering process plan was started at branches. This involved training every staff and redesigning the layout of branches to make work a little better, faster and cheaper.

He put in place capital-raising plans to support growth for the next four-five years. SBI raised Rs 16,000 crore in March 2008 through rights issue. At present, the bank has been working on another rights issue to raise about Rs 20,000 crore by March. Banking analysts say this capital should support its growth plans for another five years. “SBI has recorded a consistent growth in business in the last four years. The credit to deposit ratio of 77 per cent indicates efficient deployment of resources,” said D R Dogra, managing director of ratings agency CARE.

Other important measures include an aggressive focus on the retail customer (the introduction of teaser loans being one such example); Parivartan I and II — programmes for employee motivation and skill set improvement; Udan — preparing a pipeline of future leaders at both senior and middle levels. These have improved the perception of SBI among both peers and analysts.

He resumed clerical recruitment, which had been frozen for over a decade, in view of growing business. Importantly, the process of consolidation within the SBI associates was started. He merged State Bank of Saurashtra and State Bank of Indore with SBI. “This will improve the bank’s operating efficiencies,” added CARE’s Dogra.

Many, however, say the SBI chairman could have handled his relationship with the regulator with a little more finesse. “He could have easily avoided the in-your-face and aggressive approach with the regulator. That had to deal with the banking industry as a whole,” said an observer.

But Bhatt remains adamant and says he has done nothing wrong. “Many Indians own homes because of SBI. I am not fighting with RBI, but only clarifying... we only gave discount on the rate for the first two-three years and at higher than the cost of my funds. So what is wrong in what SBI does?” Bhatt said, while admitting that there were quite a few other issues on which he “differed” with the regulator.

Besides the teaser loan, the bank faced regulatory ire for guaranteeing Tata Motors’ debenture issue of Rs 10,000 crore and overall provisioning of 70 per cent for bad loan portfolio.

The empire struck back. RBI was highly critical of the bank’s performance, including its financial health. Consequently, it downgraded the bank’s CAMEL (capital, asset quality, management, earnings, liquidity and systems and control) ratings from B to B- in an internal report for the year ended March 2009.

There were internal rumblings too. When Bhatt restructured operations at state-level units, popularly known as circles, by dismantling a decision-making layer (zone) headed by deputy general managers, there was again a lot of criticism. While work would be sped up by cutting on red tape, it put immense pressure on general managers. The jury is out on whether or not this has made the bank more efficient.

A top official of the bank, under condition of anonymity, says: “Bhatt has improved the bank’s image and introduced aggressiveness. The performance, in terms of market share, speaks for itself.”

In the same breath, however, the official admits that the down side of his leadership style has, perhaps, weakened the collective decision-making culture at SBI.

The good news: SBI continues to be at the top of the table. In December 2010, SBI’s total business stood at Rs16,19,950 crore, compared to ICICI Bank’s Rs 424, 439 crore. Of course, ICICI Bank took a conscious decision to shrink its balance sheet size to manage the adverse effects of exponential growth and global financial crisis.

Jamal Mecklai, chief executive of Mecklai Financials, says: “During Bhatt’s regime, SBI has become more competitive in a market (like money and foreign exchange markets, and advisory services) where foreign banks and Indian private banks were very active. This helps expand the revenue base.”

The fear: His aggressive style may have compromised the bank’s standing with RBI. In addition, some of the asset quality, especially the restructured portfolio (part non-performing assets and part standard assets) may be concerns in the future and hurt profitability – a big challenge for the next chairman.

But on March 31, when Bhatt retires as chairman, he will have one satisfaction – no one calls SBI laid back anymore.

Courtesy: Business Standard

Small Customers Are Daridra Narayana..

We treat all our customers equally. It's in our DNA. The small customers are the Daridra Narayana and we are the most happy to serve them.

O P Bhatt 

Chairman 

State Bank of India

I am the least-paid Fortune 500 CEO: Om Prakash Bhatt

By Partha Sinha and Shubham Mukherjee

The State Bank of India broke into the Fortune 500 club during Om Prakash Bhatt's current five-year tenure as chairman — surely something to celebrate. And he is proud of the fact that not only did he get SBI there, but the bank has also been inching up a few notches with every passing year. However, there is something about that list which bothers him. He points out that he is the lowest-paid CEO on the Fortune 500 list. (The SBI chairman's compensation in the last financial year was Rs 27 lakh, while on an average a Fortune 500 CEO earns more than $10 million or Rs 47 crore a year). 

Maybe Bhatt has something to look forward to when he hangs up his boots as the top boss of the bank in March 2011. Being the head of the country's largest commercial bank, he would get a red carpet welcome from any financial services company in the private sector, which wants to fortify its position in the country and there would be a willing candidate in Bhatt. By his own admission, he cannot afford to retire on the pension of SBI. "I need to work to support my family," he says rather humbly over coffee in his rather spacious 18th floor office in Mumbai's central business district — Nariman Point. The building is like a fortress with two sets of checks and a barricade, designed to keep out a moving vehicle without credentials. And why not? It's the headquarters of the country's largest bank with a deposit base of over Rs 8 lakh crore and a turnover of Rs 86,000 crore. 

His room has a lovely view of the Arabian Sea and parts of Marine Drive and there are at least three sets of room ACs to keep the temperature, of a place where some of the hottest decisions of the banking sector are taken, a little low. A replica of Krishna and Arjun at the battlefield of Kurukshetra rests on a table, perhaps reminding him of the continuous battle to keep his place under the sun. There are innumerable trophies which line a cabinet on one side of the room from the various battles won. Besides, there is a hockey stick, which adorns one wall —signed by the Indian hockey team which won the Asia Cup a few years ago. 

Dressed in a black suit, looking every inch the proverbial banker, the 59-year-old from Dehradun, answers all the questions in a similar soft tone throughout the course of the two-hour-long chat. For a man, who brought in several changes to the public sector bank known to be slow but steady monolith, he was successful in hiding his tough and aggressive side. In fact, the tough banker appeared to be in a good mood as he is usually not known to be pinned down for such long chats. 

Bhatt is not averse to taking tough decisions if it's for the long-term benefit of the bank's customers. Soon after he took over as SBI chief, for 90 days, he had put the implementation of the core banking solutions being implemented by TCS on hold. Only after the solutions were rejigged to make them more user-friendly for the bank's employees and customers, did he put the process back on track. The depth and reach of the bank that Bhatt runs can be gauged by the fact that while on one hand, SBI has an average car loan size of around Rs 3 lakh, recently it financed — in one day — over 100 Mercs for a group of businessmen in Aurangabad. "We also a financed a Rolls Royce last month," he quipped. 

Similarly, while its average home loan is Rs 11 lakh, SBI has also financed homes which cost 10 times that amount. And due to its legacy, SBI treats all its customers equally. "It's in our DNA," Bhatt says in a matter of fact manner and for him, "the small customers are the Daridra Narayan and we are the most happy to serve them". His bosses in the Union finance ministry should be happy with the description as it fits in wonderfully with the government's larger goal of financial inclusion.

It's difficult not to notice the assortment of rings that adorn his fingers, perhaps keeping in balance all the planetary configurations of the time. And it sure appears to have paid off for Bhatt. Apart from transforming the largest bank in the country in less than five years, under him SBI won almost all the banking award in India. Clearly, Bhatt takes pride in his work. He showed us a video of a recent advertisement for the bank — twice — and took pains to explain its concept, at a time which was perhaps overlapping with his lunch break. 

Courtesy: The Times of India

It would have been difficult for him to achieve what he has, if it was not for his leadership skills. One has to understand that since SBI is a government company, he did not have the luxury of paying anyone anything extra, give a bonus or offer an out-of-turn promotion. So, he had the unenviable job of keeping the employees motivated and grow the bank without offering anything tangible, except the passion of it all. "I spend about 40% of my time on staff. I listen to them, I spend time with them, at times for days. I brought in a specially designed module called 'Parivartan' which has increased employee efficiency."

Citizen SBI will change the social dynamics of India

“This programme is being run for two hundred thousand people across the Bank. We are trying to provoke them, ignite them in many ways. Our role is to constructively guide them in the right direction which will help them to reap more and more of the inner fruits, which will in turn help them to get more and more of the outer fruits. If the quality of interface between people at the Bank and customers changes, it is going to have some kind of cascading effect. If it happens to one person it is a big gain; if it happens to one hundred persons it is a huge gain; if it happens to two hundred thousand people in the organization, it will change the social dynamics of India because these two hundred thousand people interact with one hundred forty million customers.”

 - Mr O. P. Bhatt, Chairman, SBI

Full article

This is the 300th post on CitizenSBI Blog

Chairman's Message For The Citizens

Mr O P Bhatt, Chairman, State Bank of India

My Dear Citizens,

First of all I must congratulate Citizen Jagat Bisht for taking the initiative to set up the Citizen SBI Blog, and then all the Citizens who have made it a success by sharing their experiences and view points.

I enjoy reading them. Some of the experiences are very touching.

The maiden century of posts is an exciting milestone. My heartfelt good wishes on this occasion.

Keep it up !
O.P. BhattCHAIRMAN

State Bank of India,
Corporate Centre,
Mumbai.

A Big Thank You To The First Citizen Of SBI

Respected Chairman Sir,

It has been a fulfilling experience so far and it will continue to remain for ever as long as I am alive in the world. The unique programme of self discovery launched by you in this great Organisation has made everyone to sit erect in their seats and wherever they are to look forward to a better tomorrow and forget the past. The journey of Citizenship started by your initiative by keeping individual development at centre cutting across Bank's interests is by any means unique in the entire Universe!!

I got an opportunity to enter this great community, Citizen SBI as Intervention Leader for the North Eastern Circle as a replacement and I am pleasantly surprised & thrilled everyday as the sun rises to announce the beginning of another day in the journey of Citizenship! Through this programme, I could meet lot of my colleagues in the Bank from different parts of the country and also within the Circle that too from different States cutting across linguistic and cultural background. This creates greater emotional bonding with my colleagues though I am from a totally different linguistic region. This has given me an identity in the Bank as well as in my family and a great opportunity to bring about change in the minds of people. We are simply carrying on the light lit by you and trying to spread more and more happiness and reap deep inner fulfilment in the process.

This programme as an unique platform has brought all the employees of the Bank under one roof forgetting their functional roles to discover and rediscover their inner selves. We all are proud to say that no programme in the Bank so far has brought people like this and made to interact with each other. A BIG THANKS TO THIS GREAT CITIZEN who leads us all from front!!!!!

R. NATARAJAN

CHIEF MANAGER(BPR-IT) AND

INTERVENTION LEADER - 1 PROJECT CITIZEN SBI

STATE BANK OF INDIA LOCAL HEAD OFFICE

GUWAHATI

CELL: 9435541467

WE BOW IN GRATITUDE BEFORE THE MESSIAH- OUR CHAIRMAN SHRI O.P. BHATT

(This humble blog started its citizenship journey on the 7th of November 2009 by expressing our sincere regards and deep gratitude to Shri O P Bhatt who had the vision to pave the way for this fulfilling journey. Since then, heartfelt gratitude in various forms has been pouring in for our beloved Chairman in the classrooms, informal feedback channels and right into this blog. Beginning with the touching sentiments expressed by a grateful CitizenSBI, we would be echoing the feelings of some more Citizens in these columns in the coming days. In case you wish to contribute, please send your feedback to coolbisht@hotmail.com, preferably accompanied by your digital photograph - CitizenSBI Blog)

Serenity, warm smile and humanity writ large on his face, coupled with a magnetic personality that draws everyone unto him in a wave of peace and joy—yes, verily he is the Man on the Chair at the helm- our Chairman , Shri O.P. Bhatt!

Countless men have occupied the chair, for more than two centuries, yet none could touch so many hearts at the same time, in a wide sweep of care and concern for each one’s inner growth, towards ultimate bliss.

As SBI glides softly from Parivartan to CITIZENSBI, the ultimate Truth, of humanity, that enables one to contribute heart and soul towards mankind, dawns upon all those fortunate to have absorbed the message in these programmes. Accolades are pouring in and SBI is fast becoming a well known brand in the world. The tremendous success of SBI is visible to all. No doubt this has been possible because each mind in SBI has been ignited by one powerful mind, naturally that of our Chairman, like a lamp that has lit every heart with love in an act of sheer selfless giving, driving away dreadful darkness forever. The sun, no doubt lights up the day, but it is the little lamp that lights up the night which the sun, cannot do. He has proved to be the lamp in our lives!

As CITIZENSBI, tenderly brings the awareness that it is in positive contribution that we create meaning in life, there are acknowledgements all around about the massive change it has brought in life and its resultant feeling of contentment.

A husband gratefully accepts, that the family means much more to him today, he listens to his kids and finds meaning in their apparently meaningless chatter and discovers happiness in it! A wife learns to listen to the feelings of her in-laws and her husband and vows to serve them with love. A parent realizes that the inner fruit matters most and helps the struggling teenager in his decision on life, as the bond between them strengthens, with the feeling that we are not alone! For the new entrant in SBI, it is a huge leap in inner growth, cutting out life’s long bitter experiences that gradually teach this Truth.

Relations that had been written off have been revived—there is hope, there is life! The eyes that carried the burden of tears are now feeling light, after the realisation that the power is within to wipe away those sorrows, forever. The drooping shoulders that carried needless burdens of worry, now stands tall with the strength derived within, to face all vicissitudes of life.

O! What a growth! What bliss to live life! The sky seems within reach. Nothing seems impossible!
A grateful heart reaches out to the man who made this happen- Shri O.P.Bhatt. Men have come and gone on this earth, but only a very few could make such positive difference on such a massive scale. How does one express one’s gratefulness to such a wonderful soul?

A peep into this great man’s heart reveals the dauntless courage to gently drive people out of their limitations to a heavenly world of possibilities, the deep concern for sacred life and to derive meaning out of living it, the impeccable values held so dear that in a relentless endeavor seeks to establish peace in every soul, the boundless love for humanity that cannot but strive to raise each one to where they actually belong- a state of pure bliss, where life lives beyond dualities of pleasure and pain, success and defeat, life and death, in one deep sense of giving and gratitude.

But for him, life would have continued to be a daily grind of distress and limitations. And all that we can say is a VERY BIG THANK YOU, SIR.

Truly, words fail miserably to convey the feelings of gratitude to you, Sir. Thanks once again for giving the gift of life to us. As long as life exists you will be in our hearts.

LONG LIVE THE MESSIAH!

Contributed by a GRATEFUL CITIZENSBI

Chairman Sir, More Surprises Please!

It is very heartening to know that our esteemed Chairman made a surprise visit to the Pink City on 17th Dec, 2009 and had interactions with the participants of 'Citizen SBI'.

How fortunate those participants are to have a first hand experience of meeting our Chairman in person and sharing their thoughts!

I have been observing our participants in my classes whenever Chairman's address is there on day two of 'Citizen Orientation Programme' as a fitting finale. Their faces glow on seeing him on the screen and they are all ears in listening to him.

At one point towards the end of his speech (integrating 'Citizenship into us) he asks ".....do you agree?..." Many participants in the class always reply immediately by saying saying "..Yes Sir." (may be for a moment forgetting that our Chairman is seen only on the screen). But for them it is as if he is asking them in person. Such is the impact of his speech. How nice it would be if our Chairman is able to make a similar surprise visit to our classes too.

S R Raghunath, Facilitator - Citizen SBI, Chennai Circle

Chairman Gives A Pleasant Surprise To Citizens-SBI In The Pink City

Our Chairman Shri O.P. Bhatt made a surprise visit to the Citizen SBI Program at Hotel Indiana Pride, Jaipur on 17.12.2009 at 6.00 P.M. We thank Ms Purnima Bhargava, Facilitator for sending us the report and photographs taken on the occasion.

REPORT ON VISIT OF SHRI O. P. BHATT, CHAIRMAN
TO CITIZEN-SBI PROGRAM

AT HOTEL INDIANA PRIDE, JAIPUR

ON 17/12/2009
It was a memorable and momentous occasion for participants of Citizen SBI program at Hotel Indiana Pride, Jaipur, when their Citizen Chairman Shri O. P. Bhatt, came to interact with them on 17/12/2009. The dedication, involvement and importance for this program of Chairman Sir could be gauged by the fact that when he reached the venue, Module II was in progress, he waited for the Module to be completed before entering the hall lest the smooth conduct and rhythm of program be disturbed.
All the participants were pleasantly surprised to see their Citizen Chairman Sir amongst them. They were excited to meet and interact with the person, who visualised and launched an unprecedented move for self development of the SBI family. The Chairman asked the participants about their views, feelings and feedback on the changes their colleagues have experienced on attending the program. He invited suggestions for further improving and refining this program. Although, initially the participants were not forthcoming, so the Chairman encouraged them to come forward to uninhibitantly share their views. Thus a free and open discussion ensued. When the participants expressed that this program would bring about a Sea Change in their attitude not only in their work environment but also in their personal, family and social life, a feeling of satisfaction could be clearly seen on his face. It was clear from his expression that he was pleased to know that the program is achieving its intended objectives and aim. The Chairman also asked the participants about the problems being faced and invited suggestions to improve work environment and organisation culture.
During interaction, the Chairman apprised that since the launch of recent initiatives there has been a change in public perception of the organisation and now the SBI family is perceived in greater esteem by public at large. He further opined that we are serving crores of people and many sections of society, our objective of Service with Smile can only be achieved by unflinching involvement of all members right from messenger to Chairman. He felt that due to the initiatives taken in recent past, involvement of staff has increased this has led to better performance and in turn has brought about their evolution, thus bringing about their own fulfilment.
Shri H. R. Jat, AGM (R-IV) and Shri Prakash Singhvi, CM (Per) accompanied the Chairman. Shri Singhvi, who is co-ordinating the programme in the Jaipur Module, informed the Chairman about the progress of the programme. The Chairman appreciated the program and the progress at the centre.
Towards the end, Ms Purnima Bhargava, Facilitator thanked the Chairman for his interaction. She expressed that new vision of fulfilment shown by this program has appealed to inner core of everyone. It is for the first time that we have been motivated for self analysis and came to know that when we help or contribute positively to someone then automatically in return, we get Inner Fruits, Outer Fruits and Joys of Contribution. This leads to prospering and flourishing of our own Tree of Fulfillment. Expressing gratitude from all participants to the Chairman, she shared the view that this is their first step on the path to Citizenship further much ground is to be covered which they all would cover as true Citizen SBI.
The Chairman Sir, won over all the participants with his simplicity, serenity and familiar smile. In their hearts, they all became committed to the Vision and Mission.- Purnima Bhargava, Facilitator