Euromoney, September 2016
Arundhati Bhattacharya already had one of the toughest jobs in India as chairman of State Bank of India. Not only is it the country’s largest financial institution, but it is also woven inextricably into India’s social fabric. She has made her job harder still by proposing a seven-sided bank merger. But as technological innovation increases and as asset quality plunges across public banks, bigger may not necessarily be better.
Arundhati Bhattacharya sweeps into the room at a pace just a notch short of jogging. “It is raining cats and dogs!” she exclaims. “How could you not be happy on a day like this?”
It is in fact an unspeakable day in Mumbai, great sheets of rain gusting over Nariman Point off the Arabian Sea, but Bhattacharya has a tendency to see the positives: rain alleviates drought, meaning fewer distressed customers.
It’s useful to be able to see the positives in this job. She has a lot of customers. And staff. And branches. And problems. State Bank of India, even after having largely frozen new hires for more than a decade so as to shrink by attrition, still has more than 220,000 staff, not counting its associate banks, and will hit 277,000 when those associates are merged; by contrast Apple, the world’s largest company by market capitalization, has just over 100,000 worldwide. SBI operates through 23,000 branches at a group level in India alone, and at times it can seem to be a rare symbol of consistency in a country of unfathomable diversity, which recognizes more than 1,600 languages and 212 tribal groups.
Managing a beast like this is hard, the more so in a state-owned enterprise that has clear social responsibilities yet is also expected to be efficient and to make money in an environment where the norms of banking seem to be changing by the day.
It is harder still given a mounting bad-loan problem that saw gross non-performing assets soar from 4.25% in financial 2015 to 6.5% in 2016. “Well, challenges and advantages are two sides of the same coin,” she says.