Interviews :: We have home loan delivery issues: SBI chairman Arundhati Bhattachrya

We do expect uniformly good service in the next 12 months, says SBI chairman Arundhati Bhattacharya
Mayur Shetty, TNN | Sep 13, 2014, 02.59AM IST

MUMBAI: As the country’s largest lender State Bank of India is a bellwether of the economy. The bank’s chairman Arundhati Bhattachrya sees signs of recovery as auto loans have jumped and businesses are in consolidation mode, reducing debt by selling assets in many sectors including roads and power. Bhattacharya who has been included in the 50 most influential list by Bloomberg wants to leave the bank a more nimble and efficient institution. In an interview with TOI she explains how she will achieve this.

How do you plan to make SBI more nimble and efficient? Do you envisage restructuring of creation of verticals?

We already have verticalisation — for large companies, mid-corporates and for smaller borrowers. What would make us nimble is sector specialists within the verticals. Right now we have sector specialists only in CAG. We also need more segmentation 1 for ultra-high networths, the high networths and the mass affluent. We definitely need to look at which branch caters to which category. For the youth we have already created the ‘In touch’ sub-brand and have created seven digital branches. Organisationally I am not doing a restructuring as what is needed is more collaboration. We need more technology so that there are dashboards where our people can see the progress at a glance.

SBI loans are the cheapest and the bank has the widest reach. Yet borrowers go to your rivals because they are faster.

Yes we have issues on delivery of home loans and other loans. Mckinsey is consulting us on this and we have started a pilot project on two of our branches. Our service delivery right now is patchy as it is person dependent and not system dependent. We want to make it person plus system dependent. We do expect uniformly good service in the next 12 months. Also in private sector there is this fear of loss of jobs. What we are thinking of is an ESOP which will give employees a sense of ownership. I want employees to own whatever they are doing and to the best extent possible. We have got a kind of an in-principle clearance. We now have to frame the plan and go to the board, the government and RBI.

What is the risk that some large exposures like Bhushan Steel turn into NPAs? Why is it such a challenge to declare a defaulter as a willful one?

We definitely would not like it to slip. We are monitoring it on a regular basis but the result of the forensic audit will take time. Wilful defaulter is a challenge as you have to prove in a court of law that a company has diverted funds, that it had the money and didn’t pay. Presently the company has to be first proved a wilful defaulter only then can you proceed against the guarantors. It is only now that RBI has said that you can proceed simultaneously. But this is applicable only on guarantees that are given from now on because the guarantors must know the changed circumstances. We have declared a number of wilful defaulters and we have been using it quite regularly.

RBI’s bi-monthly policy is around the corner. Have you made any representations?

We have asked RBI for a repo window on Saturday. Also currently we have to maintain cash reserve requirements at 95% it would be a easier for us if it was 85%. RBI has already set a target of bringing down statutory liquidity ratio (mandatory investment in government bonds) further. At this point of time reducing SLR is not going to add to anything as all banks are holding government bonds in excess of requirements because credit growth is slow. I expect a status quo, but RBI has surprised us in the past.

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