OLD SBI HAND FACES NEW CHALLENGES AMID PANDEMIC
on business-standard.com ‘WE CAN QUICKLY REACH PRE-COVID LEVEL’
Keeping the bank’s operations up and running in the last six months has been the most challenging period for RAJNISH KUMAR, who retired as chairman of SBI, in his 40-year career. The financial system in India has managed the situation well but needs fixing, Kumar tells Abhijit Lele. Edited excerpts:
After the pandemic struck, life has been challenging for people and banks. What are your thoughts about the last six months?
First thought is about keeping operations up and running in a challenging time like this when personal safety and security become very important. We have been able to do it. The morale of the staff and courage shown by those working in SBI have not been allowed to go down. The communication and steps taken for employees’ personal safety and hygiene played a very critical role. In these times, emotional connect with staff matters a lot. That is what we have been able to do successfully.
With a career spanning over 40 years in SBI, how would you describe this phase of your life?
These six months have been the most challenging part of my career. The rest were financial challenges but this was very different. This was true for every organisation across the globe. We have been able to negotiate with the situation effectively.
Banks and the financial system managed the pandemic challenge quite well. Is the time ripe to have concrete plans to get the economy back on track as it will also make life easy for banks?
I believe that the Reserve Bank of India (RBI) and the government of India have done a lot. The government has already given direct assistance (money) to those in need. On the monetary front, things have been managed effectively. Some people say there can be more fiscal support. It has costs. Even if the government puts more money in bank accounts, people are not spending. You have to also keep in mind that bank deposits also rose because money that came into accounts was not spent fully.
When would we be back to the level before the pandemic so far as banking and the economy are concerned?
A lot of recovery has already happened. Currently, I am not seeing too much stress on the bank’s books. That is the situation with SBI. With some degree of variation, that would be the position for other banks also. This quarter, the recovery has been higher. That
means the position seems to be better. So, I hope we continue on this track. And if we continue like this, then I think we can quickly come back to pre-covid levels.
This period also comes with extreme stress, raising risks of defaults. Would we see the bad non-performing asset (NPA) levels like 2017 and 2018?
No way. There was lot of accumulation at that point of time (2017 and 2018). There is no accumulation now.
Besides the pandemic, the YES Bank saga also tested your grit. Was the option to merge feasible?
The option of merger was not at all feasible. That would have been a big mess. Merging a banking entity of YES Bank’s size would not have been an issue for SBI. But culturally we are poles apart. Cultural integration would have been almost impossible.
There is discussion about further reforms in the financial and banking sector. Which aspects should get priority?
“MERGER OF YES BANK WITH SBI WAS IMPOSSIBLE. CULTURALLY, WE ARE POLES APART”
“WE HAVE TO FIX THE FINANCIAL SYSTEM. WITHOUT ROBUST PSBS THE FINANCIAL SYSTEM CANNOT BE STRONG”
We have to fix the financial system, definitely. Unless, public sector banks – which have 60 per cent share in the banking business – are strong, the financial system cannot be strong. As for priority, the issues are about corporate governance and recruitment policies in banks. The structure is very rigid but today you have to be very flexible. We need that flexibility. It is high time that they (banks) stand on their own and the government continues to stay invested. But there should be freedom, particularly in human resourcerelated issues.
Post retirement, how are you going to keep yourself engaged?
Will keep myself physically fit and do things that keep me mentally fit.
What are the many things you wanted to do but gave little attention and now would like to devote time to? Where will you settle?
For the last three years, I did not get a chance to take even one-day leave. So, I would relax for the first two months and then think about the days ahead. I am settling in Delhi as all my relatives are in and around the capital city.