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The <keyword id="6354731" type="ORGANIZATION" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> (<keyword id="13222" type="ORGANIZATION" weightage="100" keywordseo="sbi">SBI</keyword>) cut down its staff by at least 6,000 from 2.80 lakh to 2.73 lakh in Q1 of FY18. The exits were due to retirements and voluntary retirement scheme. SBI, now, wants to redeploy more than 10,000 employees keeping merger with associate banks and also digitisation in mind. The restructuring comes after the big merger. So far, SBI has merged 594 branches and rationalised 122 administrative offices. This in itself is expected to result in savings of over Rs 1,160 crore annually. As a part of re-deployment, SBI will have staff in government service branches. Around 30% of the staff of rationalised branches will be redeployed in sales functions. The bank has introduced a new employee appraisal system where performers will receive financial incentives. Also, SBI hired just 625 staff members in the first quarter. The bank is recruiting specialists for digital space and marketing though not in large numbers.

SBI cuts staff by at least 6,000; will redeploy 10,000 employees

New Delhi, Mar 19 () Crisil on Thursday said Arundhati Bhattacharya, the past chairman of State Bank of India, has submitted her resignation as independent director of the company effective April 15. In her resignation, Bhattacharya has indicated that the reason for her resignation is her decision to accept a full time role as chairperson and CEO in another company, the filing said. "Bhattacharya, an Independent Director of the company, has submitted her resignation as a director of the company, which will take effect on April 15, 2020," Crisil Ltd said in a filing to BSE. She has confirmed that there is no other material reason, other than the reason stated in her resignation, it added. "I wish to advise that I have decided to accept a full time executive role as chairperson and CEO for the India operations of Salesforce, USA. Accordingly, I need to discontinue my existing non-executive assignments," Bhattacharya said in her resignation letter to the board of directors. I sincerely regret that I will have to step down as non-executive Independent Director from the board as well as from the committees of Crisil board, from April 16, 2020," the letter said. Bhattacharya was the first woman to lead the more than two centuries-old State Bank of India, which controls over a quarter of the nation's banking system. She retired in 2017 after a one-year extension, spending four decades in various roles and then moved onto the international payment platform Swift India as its chairman, a position she still occupies. SID SID ANSANS

Ex-SBI chief Bhattacharya resigns from Crisil board

Mumbai, Mar 18 () The US-headquartered cloud-based customer relationship management software provider Salesforce has appointed Arundhati Bhattacharya, the past chairman of State Bank of India, as the chairperson and chief executive of its India operations, say sources aware of the development. Bhattacharya, 64, will be based in Mumbai and will join Salesforce India on April 20 and will lead its growth and expansion across the market, the sources told . She will report to Ulrik Nehammer, the general manager for Asia Pacific region. While Salesforce could not be reached for confirmation, Bhattacharya refused to comment saying the matter is private. Bhattacharya was the first woman to lead the more than two centuries-old State Bank of India, which controls over a quarter of the nation's banking system. She retired in 2017 after a one-year extension, spending four decades in various roles and then moved onto the international payment platform Swift India as its chairman, a position she still occupies. Under Bhattacharya, SBI has grown exponentially partly by the merger of the five associate banks and partly because of a good growth environment. The bank has also undergone drastic changes under her chairmanship by technology adoption under her watch which also saw the launch of the bank's digital banking platform Yono. Salesforce provides an array of cloud storage and digital services to clients in India, which it sees as a one of its fastest growing markets. Salesforce will create over 5 lakh jobs and around USD 67 billion in new business revenue in India through 2024, according to a 2019 report by International Data Corporation, while the domestic cloud application market is slated to grow 21 per cent to over USD 1.4 billion in 2020, according to a recent Gartner report. BEN MRMR

Salesforce India hires ex-SBI chief Bhattacharya as CEO

State Bank of India, the country's largest lender, today said most of the nation's bad loans belong to industries that are still in business and banks will probably recover the write-downs when growth turns up and they perform again, according to <keyword id="6367495" type="COMPANY" weightage="20" keywordseo="PTI">PTI</keyword>. Speaking at a seminar on '<keyword id="4501557" type="UNKNOWN" weightage="20" keywordseo="asian-banking-in-challenging-times">Asian Banking in Challenging Times</keyword>' here, <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword> Chairman and Managing Director <keyword id="6379603" type="PERSON" weightage="20" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> said the loans which have turned bad are because they are not producing enough money to cover their interest liability. And the reasons for that have been huge time overruns, leading to cost overruns, which lead to over leveraged positions, she said. About 16.6 per cent of loans to corporates - or about 8.4 per cent of the GDP - had been declared non-performing, according to Credit Suisse. Banks are straddled with anywhere between Rs 9 lakh crore to Rs 12 lakh crore of stressed assets - made up of bad loans, restructured debt and advances to companies that cannot meservicing obligations. The government yesterday through an ordinance amended law to give powers to the <keyword id="6354335" type="CITY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) to order banks to initiate insolvency proceedings against defaulters and to create committees to advise them on recovering non- performing loans. "I still believe we have huge potential in the country. The difference of the NPLs (non-performing loans) this time around is the fact that many of the NPLs are assets that are still working," she said at the seminar held on the sidelines of annual meeting of the Asian Development Bank here. To set this NPL cycle right would need dilution of equity, paring down of debt and finally leaving the asset with debt that ensures that it can be sustainably serviced, <keyword id="721" type="PERSON" weightage="20" keywordseo="Bhattacharya">Bhattacharya</keyword> said, adding this will ensure that these units get the support to enable them to raise their capacity utilisation. "In view of the fact that our economy is still growing so there is demand over there which has to be properly nurtured and may be also channelised. If you do that, many of these units will probably come back and the write-downs that we will take will probably, not surely, but probably, we will be able to claw back at some point of time," Bhattacharya said. She said the Indian banking sector faces headwinds both in respect of over-leveraged corporate debt and "stiffer" regulatory requirements. The biggest challenges faced by the regulators, she said, was how to handle the bad debt situation to ensure that the resources are not wasted. "On the other hand they have to ensure that they are perceived as being conservative and they are perceived as doing the right thing for right reasons. So I think this is the challenge that we as a country have and the regulators have as well," Bhattacharya said.

SBI chairman positive of the bad loan situation in the country

Government is considering giving a one-year extension to <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword> chief <keyword id="6379603" type="PERSON" weightage="100" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> amid the lender's consolidation with its associate banks. 
 
"There is a need for continuity at a time when the process of consolidation is going on," sources told an agency. 
 
In this regard, the government is looking at the proposal of granting extension to the current chairperson whose three-year term comes to an end this month, sources added. 
 The government has also received views of the <keyword id="2748088" type="UNKNOWN" weightage="20" keywordseo="Bank-Board-Bureau">Bank Board Bureau</keyword> (BBB) on the extension issue and an order in this regard is expected in the next few days, according to the news agency. 
 Earlier this year, the <keyword id="6355513" type="ORGANIZATION" weightage="20" keywordseo="cabinet">Cabinet</keyword> gave its nod for the merger of <keyword id="6354731" type="CITY" weightage="20" keywordseo="State-Bank-Of-India">State Bank of India</keyword> (SBI) and its associate lenders and <keyword id="6560712" type="UNKNOWN" weightage="20" keywordseo="Bharatiya-Mahila-Bank">Bharatiya Mahila Bank</keyword> (<keyword id="423104" type="ORGANIZATION" weightage="20" keywordseo="BMB">BMB</keyword>) that would make the state-owned lender a global-sized bank. 
 SBI has five associate lenders -- <keyword id="229649" type="COMPANY" weightage="20" keywordseo="State-Bank-of-Bikaner">State Bank of Bikaner</keyword> and Jaipur, <keyword id="6560713" type="COMPANY" weightage="20" keywordseo="State-Bank-of-Travancore">State Bank of Travancore</keyword>, State Bank of Patiala, State Bank of Mysore and <keyword id="143585" type="COMPANY" weightage="20" keywordseo="State-Bank-of-Hyderabad">State Bank of Hyderabad</keyword>. 
 
Among the associate banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed. 
 
The merged entity will become a banking behemoth, which could compete with the largest in the world, with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers. 
 
SBI had said that all its associate banks and BMB will be merged into it that will add an additional Rs 8 lakh crore to its assets. 
Presently, SBI has close to 16,500 branches, including 191 foreign offices across 36 countries. 
 SBI first merged <keyword id="82725" type="COMPANY" weightage="20" keywordseo="State-Bank-of-Saurashtra">State Bank of Saurashtra</keyword> with itself in 2008. Two years later, State <keyword id="269823" type="COMPANY" weightage="20" keywordseo="Bank-of-Indore">Bank of Indore</keyword> was merged with it.

SBI chief Arundhati Bhattacharya may serve for another year

<keyword id="6354731" type="CITY" weightage="20" keywordseo="State-Bank-Of-India">State Bank of India</keyword> reported its highest profit in six quarters on lower provisions for bad loans last quarter, but investors were wary about the outlook for its asset quality after the amalgamation of its five subsidiary banks from April. <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword>, which accounts for more than a fifth of India's banking assets, merged its five subsidiary banks with itself and also took over a niche lender to women from April 1, in the sector's first consolidation move. The bank on Friday reported standalone net profit, not including contributions from subsidiaries, more than doubled from a year earlier to 28.15 billion rupees ($433.5 million) for its fiscal fourth quarter to March 31. While the profit surge was in line with expectations, SBI surprised the market with lowering of its bad-loan ratio on a quarter-on-quarter basis. However, including the results of the subsidiary banks it has now taken over, the bank reported a consolidated net loss of about 33 billion rupees in the March quarter, stoking concerns that higher bad-loan ratio at the subsidiaries could weigh on the overall balance sheet. It also guided for a jump in a "watch list" of potential trouble loans to 324.27 billion rupees to account for the consolidated entity beginning April 1, compared with 133 billion rupees for the parent bank. SBI Chairman <keyword id="6379603" type="PERSON" weightage="20" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> told a news conference that the bank had already taken the "maximum amount of pain" regarding the merger of the subsidiaries and made complete provisions wherever required, although she expected overall provisioning costs to remain "elevated" in the year to March 2018. "The near term, there might still be a little more pain ... Slightly longer-term, things are definitely on the upswing," said Bhattacharya. Faster resolution of a record $150 billion of soured assets in India's banking sector is a key focus for Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>'s government, which owns majority stakes in 20-plus lenders that dominate the sector. This month, the government tweaked its laws, giving the central bank greater power to identify and enforce resolution on specific soured loans. For the three months to March, SBI's provisions for bad loans fell 9.4 percent from a year earlier to 109.93 billion rupees for the parent bank. Gross bad loans as a percentage of total loans fell to 6.9 percent in March from 7.23 percent in December, although rose on an absolute basis to 1.12 trillion rupees. <keyword id="306436" type="COMPANY" weightage="20" keywordseo="Investec-Securities">Investec Securities</keyword> said in a note after the results that the parent bank's profit beat estimates but called the consolidated loss of 33 billion rupees a massive miss. It said the results reflected its concerns of weak profitability at the merged bank, retaining its "hold" rating on the stock. "We continue to believe that the RoEs of the consolidated bank will remain below 8-9 percent which is reflected in the current valuations," the brokerage said. Shares in SBI rose as much as 4 percent after the results, but pared some gains to close 1.7 percent up in a flat Mumbai market.

SBI’s bad loans didn’t affect it much. Here’s the proof

India’s largest bank, the <keyword id="6354731" type="CITY" weightage="100" keywordseo="State-Bank-Of-India">State Bank of India</keyword> (<a href="http://www.businessinsider.in/topic/SBI">SBI</a>) is currently facing a lot of backlash for imposing penalty on customers for non-maintenance of minimum balance in their accounts. However, it has justified the <keyword id="512003" type="UNKNOWN" weightage="100" keywordseo="penalties">penalties</keyword> by saying that it’s needed to balance the "burden" of managing a large number of <a href="http://www.businessinsider.in/shocking-rs-74610-croredeposited-in-jan-dhan-accounts-after-note-ban/articleshow/56850719.cms">Jan Dhan accounts</a>, which are opened with no frills, not even these penalties. 
 
The bank also said that the government has not sent any "formal communication" for re-considering the penalty, and it will be reconsidered only if government says so. 
 It was only last week that <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword> reintroduced these penalties along with <a href="http://www.businessinsider.in/have-a-sbi-account-get-ready-to-pay-extra-if-you-deposit-cash-more-than-three-times-a-month/articleshow/57489720.cms">revised rates</a> on other banking services, to be charged from April 1. 
 "Today, we have lot of burden such as we have 11 crore financial inclusion or <keyword id="6393559" type="UNKNOWN" weightage="100" keywordseo="Jan-Dhan-accounts">Jan Dhan accounts</keyword>. To manage such a large number of Jan Dhan accounts, we need some charges. We have considered many factors and after analysing carefully, we have taken this step," SBI Chairman <a href="http://www.businessinsider.in/topic/Arundhati-Bhattacharya">Arundhati Bhattacharya</a> told reporters. 
 
Also read: <a href="http://www.businessinsider.in/Demonetization-digest-People-depositing-above-Rs-2-5-lakhs-started-receiving-show-cause-notices-and-other-stories/Top-bankers-including-SBI-Chief-Arundhati-Bhattacharya-had-no-clue-of-demonetization/slideshow/55510487.cms">Top bankers including SBI Chief Arundhati Bhattacharya had no clue of demonetization</a> 
 
<a href="http://www.businessinsider.in/SBI-chairperson-Arundhati-Bhattacharya-is-5th-most-powerful-woman-in-finance-on-Forbes-list/articleshow/52641242.cms">Bhattacharya</a> also said that all banks have minimum balance requirements and penalties, and comparatively, SBI has the lowest requirement. She added that only SBI had decided to withdraw the penalty in 2012. 
 
(Image source: InsideIIM)

Penalty required to bear costs of Jan Dhan accounts, says SBI

State Bank of India (<keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword>), India's largest public sector lender, has set up a fund worth Rs 200 crore dedicated for investment in IT innovations and start-ups. 
 
The fund would be extending up to Rs 3 crore for all India-registered companies so that they can promote their business in India using IT for banking. 
 "We have created an entity to promote and ensure usage of the funds for the right purposes, the entity could have one or more technical experts on board for advisory roles. The team would provide legal and financial assistance to startups as and when required,"" <keyword id="6379603" type="PERSON" weightage="100" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword>, chairman of SBI told <a href="http://economictimes.indiatimes.com/small-biz/policy-trends/state-bank-of-india-creates-a-dedicated-rs-200-crore-fund-for-startups/articleshow/52777274.cms">ET</a>. 
 
Bhattacharya also spoke about a single window banking relationship support to be offered to start-ups by SBI. It would be provided to start-ups through its dedicated Bangalore branch; the bank has been operational for last 6 months, and has already added more than 200 clients. 
 
She added that she realises the potential that nimble financial technology companies possess regarding banking services that customers want, and that future success depended on collaboration and not only competition. 
 
Talking of the fintech sector, she said that cost of small transactions should be minimised and banking should be made smoother by removing unwanted processes that erupt the way for smooth functions. 
 
<a href="http://i.huffpost.com/gen/3640590/images/o-ARUNDHATI-BHATTACHARYA-facebook.jpg">Image source</a>

SBI creates a dedicated start-up fund of Rs 200 crore

PM Modi's move to scrap out old Rs 500 and Rs 1000 notices have invited criticisms from <a href="http://www.businessinsider.in/?r=US&amp;IR=T">various quarters</a>. With the<a href="http://www.businessinsider.in/?r=US&amp;IR=T"> SBI chief </a><keyword id="6379603" type="PERSON" weightage="20" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> saying that even top bankers had no idea of this move to economists signaling a staggering growth in the next quarter, this move seems to be one that the government never expected it to be. However, good thing is there are news reports coming from around the country that people having deposited unexplained amount of money above Rs 2.5 lakh are already sent show cause letters by the <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> dept. 
 
Here are the details of demonetization consequence recently.

Demonetization digest: People depositing above Rs 2.5 lakhs started receiving show cause notices and other stories

In a shock to the authorities, <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword>’s loans worth Rs 11,700 crore have been locked up as NPAs because of 1,164 defaulters having willfully decided not to repay. 
 
These 1,164 cases of wilful default have been identified, and the total outstanding loan amount comes out to be Rs 11,705 crore, said the data collated by the Finance Ministry. 
 
The bank itself has declared Kingfisher Airlines and its guarantors UB Holdings and Vijay Mallya as wilful defaulters in November, which owes it Rs 1,600 crore. 
 
A total of 13 FIRs have been lodged against wilful defaulters with loans of Rs 13.10 crore. 
 
At the end of the December quarter, the gross NPAs of SBI were calculated to Rs 72,791.73 crore, while for the same period in last fiscal, the amount was Rs 61,991.45 crore. 
 
It has led to a deep fall in the profitability of the bank, given that the consolidated profit sank 67% to Rs 1,259.49 crore for the quarter. SBI Chairman <keyword id="6379603" type="PERSON" weightage="100" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> had said that bad loans are expected to further increase in the coming quarter, which may hit its profitability even more. 
 
<a href="http://www.dsource.in/resource/history-graphic-design-india/recent-times/images/800/24.jpg">Image source</a>

SBI's Rs 11,700 crore locked as NPAs with 1164 wilful defaulters

In one of her recent conversations with <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword> <a href="http://www.businessinsider.in/searchresult.cms?query=Raghuram+Rajan">Raghuram Rajan</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=Arundhati+Bhattacharya">SBI Chairman Arundhati Bhattacharya</a> spoke about payment banks. During the conversation, she also raised her concerns around Indian banking system, which she feels is ‘not mature enough to handle the payment banks’. 
 The <keyword id="46004" type="POSITION" weightage="20" keywordseo="SBI-chairman">SBI chairman</keyword> raised her concerns the day after payment bank’s licenses were given out. 
 
The RBI governor however said, "The (<a href="http://www.businessinsider.in/searchresult.cms?query=RBI">RBI</a>) board took the view that it was hard to forecast what would happen in the payment space. Given the fact that we did not know what could succeed, the board chose to license a variety of players — some tech companies, finance companies, some bank-mobile combines. Now, let's see how the game develops." 
 On the one hand, where Bhattacharya’s queries reflected the potential threat from the nimbler financial companies, Rajan’s response show that many of them may not survive. The RBI governor quoted 1990s, the year when first round of <keyword id="399757" type="UNKNOWN" weightage="20" keywordseo="bank-licences">bank licences</keyword> were given; many players failed but later on were merged with their bigger counterparts. 
 However, Sachin Salgaonkar, the analyst of <keyword id="2860031" type="COMPANY" weightage="20" keywordseo="Bank-of-America-Merril">Bank of America Merril</keyword> Lynnch believes e-payments will help soften lending rates and support growth over time. He said, “The spread of rural banking after the bank nationalisation of 1969 helped to shift rural India to cash-based transactions from barter. This led to a fall in the currency held by the public and a corresponding rise in bank deposits. E-payments will cut shoe leather costs of going to the bank, reduce cash holding, push up deposit growth and help pull down lending rates." 
 
The Indian payments market, which weighs at around Rs 15.5 lakh crore in FY15 is likely to grow 12% annually. Shares of mobiles which are at less than 0.1% may rise to 10% in the coming seven years; with the value of mobile banking rising 200 times to $3.5 trillion, says Bank of America Merrill Lynch. 
 
If reports are to be believed, branch-based transactions have gone down by 7% with Internet banking gaining popularity. The fact, however, might sound advantageous to the bank license winners. 
 The report also said that the internet expansion might make the digital banking soar and that digital banking customers may reach 230 million by 2020. <keyword id="1145566" type="UNKNOWN" weightage="20" keywordseo="Ketan-Doshi">Ketan Doshi</keyword>, MD Pay Point India Network says, “The list of names who were given payments bank licences indicate the RBI was looking at mostly people with deep pockets who could invest loads of cash and undertake heavy investment."

SBI Chairman tells Raghuram Rajan that Indian Banking system is not mature enough to handle payment banks

When <keyword id="6379603" type="PERSON" weightage="80" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> was the deputy general manager at <keyword id="6354731" type="CITY" weightage="80" keywordseo="State-Bank-Of-India">State Bank of India</keyword> (SBI) in 2001, she used to wonder why the bank is spending so much to maintain foreign operations' back office overseas. She couldn't do much at that time. Now as the chairman, she worked methodically and systematically to fix problems and used technology and recovery model to transform the bank. 
 

	According to her, red tape and a rigid bureaucratic structure made even the simplest of tasks difficult. Today, she is the bank's chairman and has not forgotten her 14-year-old idea. "I did not find traction then, so I am bringing it now," Bhattacharya told the Economic Times. 
	 

	Locating bank back offices in low-cost locations like India would seem a no-brainer. The fact that SBI is doing it now may seem ordinary but it is important in the context of the bank's history, its decision making process and its structure. 
	 

	India's biggest, oldest and most venerable bank faces multiple challenges at a time when the weight of bad loans alone, not to mention competition and costs, threatens to derail its plans. 
	 

	Bhattacharya would know more than anyone else that SBI may well get bypassed by the technology revolution if it does not take serious steps. She is not sitting idle, but she is not tearing up the system and creating a revolution either. She is working to identify problems and fix them. Technology and recovery will be the pillars on which SBI rests. When she decided to transform the bank from a staid state-run lender into a customer-friendly one, she went hunting for a technology hand familiar with the ways of the West, and hired former <keyword id="6386585" type="CITY" weightage="80" keywordseo="Barclays">Barclays</keyword> executive SK Bhasin as chief technology officer. 
	 

	"I have been looking across the globe for people who have done these things well to try and replicate some of their experience," says Bhattacharya. We have done all of these through IT (information technology). Without IT none of these things could be done well." State-run bankers, intensely focused on lending and raising deposits, rarely factored in technology in their lives. Bhattacharya's efforts in targeting future businesses is reflected in its recent business arrangements with <keyword id="18635" type="CITY" weightage="80" keywordseo="Amazon">Amazon</keyword>, Snapdeal and many more digital-age companies, pushing the Essars and Chettiyars to the back seat. 
	 

	New businesses are future profits. But what about the bad loans of the past, which together with restructured loans are at 10% of total loans, making the industry technically insolvent. SBI is no exception to bad loans. Its gross bad loans and restructured loans are at Rs 83,434 crore, or 8.4% of total loans, equivalent to the government's spend on social issues like healthcare and education this year. 
	 

	"There is no point in getting impatient," says Bhattacharya. "It has to be done diligently. When the finance minister wanted to know the one thing that was my priority, I said we wanted a bankruptcy law." The Indian judiciary is notorious for prolonging decisions on disputes, and the promoters of companies, especially wealthy ones such as United Spirits' <keyword id="14678" type="PERSON" weightage="80" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> whose <keyword id="6373962" type="CITY" weightage="80" keywordseo="Kingfisher-Airlines">Kingfisher Airlines</keyword> owes more than Rs 7,000 crore, have exploited the loopholes. But because the <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> government unlike previous ones does not provide defaulters with protective shields, bankers such as Bhattacharya are emboldened to take action. "We have a lot of angst against these promoters, who we believe are taking the system for a ride," says Bhattacharya. "If the promoter has taken money he has to give it back. There are no two ways about it. If they don't, their lives are going to be miserable. I have deep pockets to do it. There is no point in messing around." All this is not lost on foreign investors. SBI is the only top PSU lender where foreign funds are raising stake even as they have cut them in <keyword id="62034" type="CITY" weightage="80" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> and Bank of India. "I would say SBI is a private sector bank because the new CEO is phenomenal," says <keyword id="105152" type="PERSON" weightage="60" keywordseo="Avinash-Gupta">Avinash Gupta</keyword>, managing director and head of institutional equities at <keyword id="122772" type="CITY" weightage="80" keywordseo="Bank-of-America-Merrill-Lynch">Bank of America Merrill Lynch</keyword>. Gupta deals with a lot of foreign investors, many of whom are impressed by Bhattacharya's firmly-in-control attitude and her desire to change things. When Bhattacharya took charge in 2013, profits were sliding, bad loans were climbing, the economic climate had deteriorated and the private sector was poaching its clients . There was no point in waiting for the tide to turn. "I couldn't expect the external environment to suddenly turn around and give me good results," says Bhattacharya. What did she do? "Like any good housewife who will husband her resources when the chips are down to ensure every rupee helps make her go further," SBI turned prudent, she said. "When I talk about cutting expenses, I mean unwanted expenses. Not what is required to build business," she says. "All expenditure has to be controlled to yield the best results. A lot of us were travelling <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">economy</keyword> (class) for quite a while." 
	 

	Lawyers and landlords are at the receiving end of Bhattacharya's measures to contain waste. The days of branches negotiating rent for branch offices are over. It is no longer done at the 11th hour, which often gives property owners the upper hand. Alerts come up 18 months before the lease expires, and the head office monitors and ensures it is done a year in advance. 
	 

	It is no secret that the judiciary and the system are as responsible for banks' ills as the banks themselves. While disputes run for months, bankers remain observers. But this is not the case with SBI anymore. Its advocates have been made accountable. "There are some advocates who keep taking adjournments, and there are others who move fast," says Bhattacharya. 
	 

	"I know every advocate's performance." While a lot of these issues are administrative in nature, what is the scene when it comes to its core business — lending? "She has a very clear-headed approach," said <keyword id="85088" type="PERSON" weightage="80" keywordseo="Romesh-Sobti">Romesh Sobti</keyword>, MD &amp; CEO of <keyword id="46717" type="CITY" weightage="80" keywordseo="IndusInd-Bank">IndusInd Bank</keyword>. "It's a well-defined approach to many issues the banking industry is facing. She is forthright in her ability to articulate issues not only facing SBI but also the banking industry," said Sobti. There is a paradigm shift. Tractor loans, treated as crop loans, are now automobile loans. Instead of waiting for the harvest to repay, the borrower has to pay on a monthly basis, like with equated monthly instalments in a car loan. 
	 

	"When a farmer gets money from a crop, it first goes to others — the teacher, grocer... banks are last on the list," says Bhattacharya. "Make them EMI-based. Can I give them loans which will yield a regular stream of income? We were lacking the customer connect." 
	 

	Many current and former SBI customers would agree. The question now is not just how quickly she can change perceptions about the bank but also how soon she can make the bank's cash machine churn out profits. With non-performing loans assuming alarming proportions, it will take all of Bhattacharya's combativeness to stem the rot.

	 
	(Image: Reuters)

Know how SBI chief Arundhati Bhattacharya changed India's largest bank for the better

State Bank of India (<keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword>) Chairperson <keyword id="6379603" type="PERSON" weightage="100" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword> has said that the bank was mulling the option to issue Employees Stock Option Plan (<keyword id="120103" type="PERSON" weightage="80" keywordseo="Esop">ESOP</keyword>) this year. “We are now considering an ESOP, which is basically something where you give an option and they exercise the option at a later date depending upon what is the share price in the market. So, we are looking at that ESOP scheme,” said Bhattacharya. 
	SBI was earlier considering issuing Employees Stock Purchase Scheme (<keyword id="462746" type="ORGANIZATION" weightage="80" keywordseo="ESPS">ESPS</keyword>) – a share purchase scheme. “At that point, SBI’s shares were at a very low price,and it would have made sense. Since then, prices have improved, and it is difficult for our employees to purchase this,’’ she said.<o:p></o:p>

	This would be based on ‘performance parameters.’ “If you perform as per the target given to you, then you will get a certain number of options, which will be locked in for a period of time, say one year. And then subsequent to that one year, you will exercise the option if you find the value has gone up. If it hasn’t gone up, you can allow it to lapse,” she said.<o:p></o:p>

	“My intention is to make it available to all. I think we all need to work as one team. Therefore, it would be nice if we can give it to everybody. But we have to find out performance parameters for every job. That is a big job. So, we are looking at how that can be done,” she added.<o:p></o:p>

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