SBI's chief outlines his plans to re-energise the country's top bank and his foray into new areas including wealth management and M&A financing. "Deposits, deposits, and more deposits. That's my mantra. For, you first need money in your purse before thinking of financial planning," O P Bhatt says, tightening his grip on the glass containing fresh sugarcane juice "" a special offering at the Taj Mahal Hotel's Masala Kraft, write Shyamal Majumdar and Rajendra Palande.
The State Bank of India chairman is rather pleased with the restaurant management for this surprise in its menu card. "You have to constantly innovate to keep the X-factor going and be gracious to your customers. That's the only way to make the elephant dance," Bhatt says, taking a deep sip of the juice.
The elephant may take a while to dance but it is trying to move fast. For example: SBI's share in total bank deposits, which had come down from 18.72 per cent in March 2004 to 15.21 per cent by December last year, has gone up by 34 basis points in the first quarter of the current year "" much more than the chairman's target of an increase of 25 basis points every quarter, for both deposits and advances. The net interest margin has also improved to 3.31 per cent in March 2007 from 2.92 per cent in the same month a year ago.
The steward intervenes with his recommendations for starters but Bhatt isn't interested as he doesn't want to spoil the taste of the sugarcane juice.
The first SBI chairman to get a five-year term says his first preference was to join the IAS but his parents insisted that he take up the SBI probationary officer's job. The reason was obvious: in 1972, SBI was paying Rs 925 a month, which was Rs 75 more than an IAS salary in those days.
Thirty five years later, he is glad that he listened to his parents. The bank has given everything that a middle-class pahari (he is from the Garhwal region of Uttaranchal) like him could ever dream of. More importantly, his journey to the corner office of India's premier bank has required nothing but a lot of sweat.
He also considers himself lucky to have worked in close quarters with several doyens of Indian banking. Apart from their vast knowledge, what also impressed him was their human touch. During his posting in London, his boss "" D Basu "" had once instructed him to rush to India on an urgent assignment. Bhatt asked him whether he could extend his stay by seven more days as he didn't want to miss the opportunity to visit his parents. Basu looked at him rather sternly and asked him to leave before he could say no!
He talks fondly about his MD, T S Bhattacharya, who is two years his senior in the bank and was acting chairman before Bhatt took over, but has been generous enough to guide him whenever required. "I have learnt from TSB that a leader has to be generous," Bhatt says.
The steward intervenes again and Bhatt, a strict vegetarian ever since he was diagnosed with high blood pressure, orders a rather unexciting mix of roti, sabzi and paneer makhani. We settle for the same but add a chicken dish to prevent the steward from yawning.
Bhatt then proceeds to give a fascinating account of his blueprint for regaining the lost glory of the country's premier bank. "September 2006 was an inflection point for the bank which had been steadily losing market share to private and foreign counterparts," he says.
Currently, only 3 per cent of SBI's individual customers are from the mass affluent segment. Bhatt doesn't comment on the figure but says he wants to bring the rich back to the SBI fold by offering customised solutions. That explains the foray into wealth management services, for which the bank has also appointed 439 relationship managers and is planning to recruit 1,000 more by October.
SBI has also kicked off a new initiative "" the Super Circle of Excellence programme. The idea is to pick out the branches with the best growth potential from each of its circles, or regions, and incorporate them into a Super Circle. Bhatt hopes these branches will provide the cutting edge in regaining its market share.
Bhatt seems to be liking the rather spartan food and says the country's largest bank of course doesn't want to forget its social responsibility and plans to reach another 100,000 villages. Two new strategic business units "" the Agri Business Unit and the Rural Non-Farm Business Unit "" have been set up to tap the opportunity. They have been given a three-year target of doubling the level of advances and trebling the level of deposits in rural and semi-urban branches.
The high targets are being buttressed by technology. By December this year, it aims to have at least 90 per cent of its business on the core banking solution. "I have requested S Ramadorai, chairman of TCS, which is SBI's technology partner, to persuade all TCS employees to open their salary accounts with SBI. It is only customers who understand what is best for the bank," Bhatt says
In a massive push for cashless transaction, SBI is also trebling the number of its ATMs to 25,000 in the next three years. This means the bank will add over 5,900 ATMs every year.
SBI, Bhatt says, is entering seven new business streams "" financial planning and advisory services, custodial services, merchant acquisition, mobile banking, payments solutions, general insurance and pension funds. Apart from creating a holding company for mutual funds and life insurance venture this year to unlock value, the bank has begun taking steps to build a strong derivatives business abroad.
Also on the anvil is a massive push for M&A financing. While the bank lent $1.5 billion in acquisition financing last year, which Bhatt says is the largest by any Indian bank, SBI has set up Global Syndication and Participation desks in Singapore and London.
He is also planning the mother of all fund-raising events by mopping up Rs 50,000 crore in the next three years. "There can be no bank which does not need capital, given the growth," Bhatt says.
Our main course is through and Bhatt settles for firni. His aide passes on a slip reminding him of an appointment for which he is already late but the chairman asks him to wait. "No change is possible unless the mindset of the employees change," Bhatt says, and talks about how he personally conducted elaborate interactive sessions with his officers to drive the point home.
As a follow-up, a massive programme called Parivartan has been launched which will consist of 3,500 two-day workshops spanning over the next 100 days. Bhatt enthusiastically shows us SMSes sent by his CGMs about the roaring success and full attendance in these sessions. But will any CGM dare say anything else to the chairman? Bhatt brushes aside the question and says he encourages his officers to cut bureaucratic paperwork by SMS-ing him urgent messages.
Trying to make the elephant dance has, of course, meant a lot of personal sacrifices. For example, he doesn't remember when he last took leave; and weekends mean taking home at least three suitcases of files on Saturday evenings. Bhatt takes our leave, as the aide comes back again with an anxious face. Possibly, it's five minutes of SMS time before the next meeting.
