Foreign operations set to get a leg up at SBI
State Bank of India (SBI), the country’s largest lender, may have a managing director (MD) for its international operations. SBI now has four MDs, compared to two earlier.
One of the MDs, R Sridharan, is focusing on associates and subsidiaries. Another managing director, S K Bhattacharyya, who retired in October, 2010, was the chief credit risk officer.
After the Cabinet approved a Bill to amend the laws governing SBI, two additional posts of MDs were created. The government on Thursday appointed three MDs for SBI — all promoted from the posts of deputy managing directors. The new MDs are Diwakar Gupta, Hemant Contractor, and A Krishna Kumar.
According to sources, apart from an MD being given the responsibility of looking after international banking, one of the MDs is likely to focus on domestic operations, which would include corporate, retail and agriculture. One managing director would be given the role of chief financial officer or chief credit risk officer. Sridharan’s portfolios would be unchanged, sources said.
According to SBI officials, Pratip Chaudhuri, who took over as SBI chairman (Chaudhuri was a deputy managing director looking after international operations), would pitch for the post of an MD exclusively for foreign operations. Apart from his experience in international banking, Chaudhuri was also instrumental in successfully merging State Bank of Saurashtra with SBI.
The domains of the MDs are decided by SBI’s management after discussions with the government. SBI’s management had, for the past few months, discussed the broad contours of the new MDs’ responsibilities with the government.
According to SBI officials, SBI wants to ramp up its overseas presence to support the increasing number of Indian companies expanding their footprints in overseas geographies. Currently, foreign operations contribute 13 per cent to SBI’s top line. The bank aims to raise the share of business from foreign geographies to 20 per cent over the next 2-3 years.
An MD dedicated to foreign operations would also help the bank to expand through the inorganic route in the international arena. SBI has, for long, scouted for acquisitions in regions like Southeast Asia and Africa. The bank has more than 150 branches spread across 32 countries.
Chaudhuri also emphasises on beefing up retail banking in foreign geographies, which, he says, is key to fulfilling the bank’s aspirations as a global bank.
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