. Excerpts: You seem to be undoing what your predecessor had done. You have stopped the rollout of core banking solutions (CBS).
Core banking technology is something basic and so why would I want to do away with it? All seven associate banks of SBI are fully networked with CBS and SBI has about 3,500 branches where CBS is in place. There had been some slowdown in pass book printing, connectivity, opening accounts in branches. They were small issues, but by not addressing them, we were neglecting our retail customers. And because of the fast pace of the rollout, either the quality of the implementation or the period of hand-holding and the training of our staff was not adequate. So we decided that for 90 days we would not roll out CBS in new branches unless there is a business exigency and this period would be used to iron out the glitches and improving the helpdesk. It is business as usual on the technology front from this month. We have introduced 600 modifications in the software in the last three months.
You also said "no" to overseas acquisitions.
What I had said was that henceforth we would not acquire small banks. There are two reasons behind this: these banks do not add to the bandwidth of SBI. We are a Rs 500,000 crore bank and if we buy a $3 million or $5 million bank, it adds little to my balance sheet but takes away my management time.
We cannot grow without foreign acquisitions but there has to be a business fit between SBI and the bank to be acquired. We will acquire banks for $100 million and $500 million, but not for $5 million.
You're creating new positions at the senior level.
Oh, yes. One of them is deputy managing director, corporate strategy and new businesses. We have reached a stage where we are continuously looking out for new businesses.
How about domestic acquisitions?
The government is keen that consolidation takes place in the banking industry. We are open to the idea. I don't know whether SBI can be acquired (by others) but we will he happy if we get a bank to merge with us and we become stronger to serve our customers better. Right now, there is nothing in sight but we are positive about the idea.
So, what are your priorities?
Improving customer service and market share and energising my employees are the corner stones of what we want to do in SBI. If we get these three things right, every thing else will fall in place. Along with better customer service, we need to have better product range, better ambience, faster response time and better pricing...I am losing market share because I am not as good as the competition and the market. It's difficult for me to digest this after spending 34 years with this bank. Possibly it's a mid-life crisis for the bank. If I keep on losing market share, I am not a good leader. I don't think money is a big issue. Even in the private sector every employee is not well-paid. As a service provider, a bank employee is empowered and can change the lives of their customers. Once my employees get this message, SBI will take off like a rocket!
Any change in business strategy?
We have the largest treasury in the country. We want to spin it off as an independent profit centre and foray into newer areas. It is at the top of our agenda.
Broadly, SBI is present in every area of banking. Our growth rate is not fantastic because we have a huge base. In absolute terms, we are still the king but we need to pull up our socks, spot new trends and be where the action is. We are launching new products, tweaking existing products and forging new relationships with institutions, corporates and NGOs to expand our reach.
Any plans for your infotech subsidiary, SBICI and SBI Caps?
Our infotech subsidiary has got some orders and we need to execute them before we plan its future.
SBICI was not doing well and, in fact, it was under the RBI's "prompt corrective action" spanner. We are finalising its accounts for 2005-06 and it is now out of the RBI's glare. Theoretically, there are several options. It can continue as it is and grow organically, it can go in for rapid expansion through acquisitions, or it can become a niche player in the private banking space. We can even sell it or close it down. We are examining all possibilities.
SBI Caps has been doing well and its growth rate is better than that of other investment banks. We have not made any big investments in SBI Caps but we have opened an office in London and we have tie-ups with overseas players for businesses.
How about merging the associate banks with SBI?
The amendments in the SBI Act and the SBI Associate Act will enable us to go in that direction. We are looking at it "" whether all will merge into one or whether SBI will remain the same while the associates merge to form another big bank. Even some of the associate banks can merge with us, some among themselves and a few can remain as they are. It's an open question. All I can say is that I will be pro-merger because a merger gives strength and economy of scale.
Any plan for a public float?
We have met our capital requirement for this year. Once the Act is amended, we will be able to go in for a public float. It is indeed a cheaper option than raising Tier II capital but since we are comfortable with our capital now, we will not rush for it. We do not need any additional capital for the next one year.
Should the government raise the 20 per cent cap on FII investment in SBI?
Well, there is so much of foreign money coming to the Indian market and if the cap is waived, SBI will certainly attract foreign money. If it's done, the scrip price will rise and there are no two ways about it.
Would you want it?
Honestly, I have never thought about this.
