By Shalini Pandey
Rajnish Kumar has been named as the new Managing Director (MD) of State Bank of India (SBI), succeeding Arundhati Bhattacharya as the Chairman of the country’s largest bank. “I look forward to serving the bank to the best of my abilities along with the support of all my colleagues spread across the globe,” Kumar said in his first press conference on Wednesday.
Tackling bad loans will be a priority for India’s largest bank. Kumar said that he was already in discussions on how to revive corporate credit growth and how to resolve Non-Performing Assets (NPAs). SBI, which accounts for more than a fifth of India’s banking assets, has seen a rise in bad loans after it absorbed five subsidiary banks earlier this year. Kumar said SBI had tackled issues that came as a result of that deal and would see asset quality numbers “looking much better”.
Gross NPAs of the public sector banks rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago, according to a Finance Ministry data. As many as 1,762 wilful defaulters owed Rs 25,104 crore to SBI as of March 31, 2017. Bad loans are seen as a systemic risk while credit growth is a key element of India’s economic revival strategy. Huge NPAs of public sector lenders is a major cause of worry for the government.
Complete transformation in three years?
Rajnish Kumar was the one who asserted that people would see changes on that front. “In 3 years, you will see a bank which has completely transformed itself. We have 420 million customers,” Kumar said. Kumar also said that infrastructure and consumer spending is where the bank has huge opportunities.”The bank is well positioned to capitalise on them,” the new Chairman said. Kumar replaces Arundhati Bhattacharya, who implemented major reforms during her four-year tenure at the helm and became one of the most high-profile executives in India. According to an order issued by the Department of Personnel and Training, the Appointments Committee of the Cabinet approved Kumar’s appointment for three years from the date of taking charge on or after October 7.
The Banks Board Bureau had interviewed all four SBI Managing Directors for the top position. Apart from Kumar and PK Gupta, the other two Managing Directors are B Sriram and Dinesh Kumar Khara.
A traveller and a badminton player
Kumar joined SBI as a probationary officer in 1980 and has worked in various departments. Before becoming the MD of the national banking group, he headed SBI’s merchant banking arm, SBI Capital Markets as MD and CEO in 2015. As per the SBI website, Kumar holds a master’s degree in physics and is a CAIIB, an avid traveller and a good badminton player. He has worked in credit, project finance, foreign exchange and retail banking. He also worked for SBI overseas in Canada and the UK. The new head faces the challenge of leading SBI through the resolution of bad loans while ensuring its growth by stepping up lending.