On day one of taking charge, the new State Bank of India chairman Rajnish Kumar hit the ground running with a major restructuring at the top organisational set-up of the largest bank in the country.
In his first major decision as the chairman, Kumar has decided to realign the various business groups and verticals under the whole-time directors of the bank. The bank has decided to bring the critical area of recovery of non-performing assets (NPAs) and resolution of stressed assets under the control and oversight of Managing Director (stressed assets resolution group). B Sriram, MD (corporate and global banking) will hold additional charge of the new stressed assets group, Kumar said in an internal office communication issued on Saturday.
Sriram who was earlier MD of corporate banking group will now be handling corporate and global banking as well. Managing director (National Banking Group) will now be redesignated as MD (retail & digital banking). Praveen Kumar Gupta will handle this crucial department at a time when the bank is in the middle of undertaking a major digitisation process.
Dinesh Kumar Khara will be redesignated as MD (risk, IT and subsidiaries). All subsidiaries of the bank will be reporting to him. One post of MD is lying vacant after the elevation of Kumar as the chairman.
Kumar has also decided to create a new Chief General Manager position designated as CGM and Chief Strategy Officer under the Chairman for “monitoring various corporate strategic initiatives”. The Chief Customer Service Officer will now report to Gupta, MD (retail and digital banking). It has also decided to redesignate DMD (SAMG) as Deputy Managing Director (stressed asset resolution group) reporting to Sriram, MD (SARG)
On October 6, a day before taking over as the Chairman, Kumar listed reviving loan growth and resolution of stressed assets as immediate priority areas. “We are undergoing a digital transformation in the bank and we are readying the bank for the future. We will continue to give top priority to these. We are in the process of revamping HR in a major way. There are short-term and long-term goals. I will be reviewing all the action plans which is already happening. We will look at…. the course correction required and will have a blueprint,” Kumar said.
On stressed assets, Kumar said, “for stressed corporate accounts, each case is different. All cases have their own complexities. On a case to case basis, we will definitely be doing a review. If any course correction is required in a particular case, we will decide.” The bank’s asset quality slipped substantially because of higher accruals of bad loans from the books of associates. Gross NPAs increased from Rs 1,37,662 crore as on June 2016 to Rs 1,88,068 crore as on June 2017. The bank has put Rs 32,427 crore in corporate advances in the ‘watch list’ of loans that could be at risk of going bad. The power sector accounts for a third of this exposure.
“It has been decided to restructure the top organisational set-up of the bank for effective control and oversight of its enlarged domestic business and operations, post-merger of erstwhile associate banks, better synergy and also to impart greater impetus to recovery of NPAs and resolution of stressed assets,” Kumar said.