State Bank of India (SBI) is toying with the idea of repositioning its managing director (MD), corporate accounts group (CAG), as chief of its subsidiaries.
SBI had set up the group to deal with high-value accounts and designated a managing director to oversee this business following recommendations of global consultancy firm McKinsey in 1995.
The obvious reason could be the diminishing importance of the CAG, which has not been showing much business these days. In fact, for the larger part of fiscal 2002, the CAG's loan book shrank as corporates shied away from loans.
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Only towards the end of the year, there was some credit offtake by big corporates. Otherwise, it was retail loans which propped SBI's loan book during the year.
Insiders admitted that there have been discussions on converting the MD and group head of CAG into MD and group head of subsidiaries. However, no decision has yet been taken on this issue. The State Bank Group has seven associate banks besides subsidiaries SBI Capital Markets and a mutual fund concern.
SBI has two MDs. The other MD heads the national banking division. "There is no plan to appoint a third MD. The bank will continue to have two MDs only. There could be a change in portfolios with one MD looking after the subsidiaries and the other MD after national banking operations. However, a final decision is yet to be taken," sources said.
Meanwhile, A K Batra and P N Venkatachalam are slated to become new MDs once the incumbents, Y Radhakrishnan and S Govindarajan, retire in June and July. According to sources, the vigilance department has already cleared the files of Batra and Venkatachalam. Batra is now deputy managing director, international banking, while Venkatachalam was heading an associate bank till recently.
Govindarajan is MD and group executive of national banking, while Radhakrishnan is MD and group executive of corporate banking. Radhakrisnhan is also responsible for putting in place the bank's new technology plan.
SBI chairman Janki Ballabh is retiring in October. A K Purwar, MD, State Bank of Patiala, is set to succeed him. Among the senior SBI executives, only Purwar can meet the criterion of two-year residual service -- a necessary precondition to become the chairman.