New SBI Chairman Wants Financial Strength Above All Else

Euromoney, January 2018

Arundhati Bhattacharya left big shoes to fill as chair of State Bank of India, but Rajnish Kumar’s arrival has coincided with a handy recapitalization of public sector banks that will help him achieve his main aim

There is no institution in the world quite like State Bank of India (SBI).  A customer base of 420 million individual account holders in one country; an obligation both to deliver strong performance to shareholders and to bank the poor, even when doing so will damage returns.

It is at once an engine of government policy on domestic financial inclusion and a tech-savvy bank active in 36 countries, aiming to make 20% of its book international.

It presents a unique management challenge and there is a new man at the helm. On October 7, Rajnish Kumar took over from his effervescent, widely recognizable predecessor, Arundhati Bhattacharya, whose own tenure had been extended for a year beyond the usual three in order to digest an ambitious seven-sided merger.

Kumar is State Bank through and through: he joined in 1980 and has worked all over the institution, from retail to corporate, international to project finance. He was chief executive of SBI Caps, the merchant bank arm, and has experience not only of big-city Mumbai but also the most remote place in India, the northeast states, the often-forgotten chunk of the country that wraps around the eastern side of Bangladesh.

He picked both a good and a bad time to take the reins.

On the bad side, scrutiny of SBI’s bad loans and the consequent impact on credit growth, has rarely been more intense. On the good side, a solution landed on his desk in his very first month in the job.

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