Managing people will be key to success for SBI’S CFO
The appointment of Charanjit Singh Attra as chief financial officer (CFO) of State Bank of India — the first c-suite hire through the lateral route at the public sector bank (PSB) — could open the gate for similar Cxo-level appointments in other state-owned lenders.
How the 49-year-old chartered accountant handles people-related issues in the country’s largest public sector bank would be keenly watched, both internally and by external stakeholders and peers, say experts from the sector. The PSB has so far only relied on internal talent to fill the position of CFO.
Attra’s peers say two things seem to have worked in his favour in getting the coveted job. The 12-odd years spent in a private banking institution — ICICI Bank group — in the early part of his career.
As the head of Structured Finance Group and chief financial officer at ICICI Securities — and previously as chief accountant at ICICI Bank — he was involved in investment banking; had hands-on experience of raising finance, both equity and debt; worked on commercial and retail banking operations of the bank; and oversaw its financial accounting practices, among other things. This was followed by a short stint in an information technology company as global CFO.
But what perhaps worked most for him, and will also come in handy in the current assignment, is his exposure to working with the PSBS as an advisor and consultant in EY India. Over the past five years, Attra worked closely with around a dozen PSBS and insurance companies on IFRS/IND AS conversions. “Adoption of the new accounting standards by the banking industry require large-scale changes in the way banks recognise income and credit risks,” says a senior financial services executive from one of the Big Four audit and consultancy firms.
As banks migrate from current practice of incurred loss model of credit risk profile to expected credit loss model under the new Indian Accounting Standard, their capital adequacy ratios would need a fresh look. “Systems and processes have to be put in place for better mapping of the risk profile of their debtors,” adds another banking services executive.
Over the years Attra has been part of several committees advising the Institute of Chartered Accountants of India, the Reserve Bank of India, and the Ministry of Corporate Affairs on the new accounting standard for banking and financial services sector. Experts point out that SBI would have a key role in helping other PSBS to transition to the new accounting regime. A deliverable for Attra would be to help SBI and its subsidiaries transition to the new regime, they add. Apart from subject matter expertise, people skills would be an important factor in this journey.
Amidst intense lobbying by underprepared banks, the RBI has put off twice the deadline for the adoption of the new accounting standards by the banking sector. Experts, however, feel there is not much head room for the regulator to do so going forward. Further, the pandemic situation has thrown up its own set of fresh business challenges to deal with.
As their ecosystem consolidates, it is in the interest of PSBS to attract and retain top management talent from the private sector. However, any fresh talent that comes in at the Cxo-level would have to work consciously on people and culture issues, add experts. The onus is also on the banks too to make any fresh talent feel comfortable in the work environment.