O. P. Bhatt took over the reins of sbi when private players were catching up. He decided to go slow and his strategy seemed to have paid off. With SBI’s profits two times that of its closest rival ICICI Bank, sbi is far ahead of its competitors by any means
B&E: What steps have been takn by you to bring down the NPAs?
OPB: We are making continuous efforts to bring down the NPAs and we have restructured loans for the same. Then we have our Stressed Asset Resolution Centres (SARCs), which too work towards bringing down the bad loans. They identify assets as and when they get stressed and then start working on them to ensure that do not turn bad.
B&E: The bank has been able to bring down the cost of deposits from 6.16% in June 2009 to 5.27% in June 2010. How has it been possible?
OPB: It’s because we have been able to reduce our high cost deposits. We will try to lower the cost of deposits further and if we cannot do that, we will try to maintain the low levels that we have been able to achieve.
B&E: Do you plan to raise capital in the near future? If yes, how?
OPB: We certainly plan to raise capital in the future. However, we are still working on it. In fact, we have a plan to raise about `200 billion by the end of the current financial year. The capital would be raised by way of rights issue, which will keep the government holding unchanged. If we do not raise it by way of rights issue, then the other options are preference shares and FPO (follow-on public offer).
B&E: You just said that you are upwardly biased on interest rates. Does that mean that the banks will not give good offers during the upcoming festival season?
OPB: Banks can give good offers during the festival season and they will surely do that because the festival season draws a lot of customers and no bank would like to miss that opportunity. But then, the rate that they offer will have to be above the base rate.
B&E: RBI has made it clear that they do not have issues in giving new banking licences to industrial houses? Is this a bad news for the exsisting players?
OPB: This is a philosophical thing. There are arguments both ways. In my view, if an industrial house gets a banking licence then the onus is on RBI to see that the things are done in the right manner. We all know that we need more banking facility to achieve the financial inclusion goal. Hence, we certainly need more banks in the system.
Read more.....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
B&E: What steps have been takn by you to bring down the NPAs?
OPB: We are making continuous efforts to bring down the NPAs and we have restructured loans for the same. Then we have our Stressed Asset Resolution Centres (SARCs), which too work towards bringing down the bad loans. They identify assets as and when they get stressed and then start working on them to ensure that do not turn bad.
B&E: The bank has been able to bring down the cost of deposits from 6.16% in June 2009 to 5.27% in June 2010. How has it been possible?
OPB: It’s because we have been able to reduce our high cost deposits. We will try to lower the cost of deposits further and if we cannot do that, we will try to maintain the low levels that we have been able to achieve.
B&E: Do you plan to raise capital in the near future? If yes, how?
OPB: We certainly plan to raise capital in the future. However, we are still working on it. In fact, we have a plan to raise about `200 billion by the end of the current financial year. The capital would be raised by way of rights issue, which will keep the government holding unchanged. If we do not raise it by way of rights issue, then the other options are preference shares and FPO (follow-on public offer).
B&E: You just said that you are upwardly biased on interest rates. Does that mean that the banks will not give good offers during the upcoming festival season?
OPB: Banks can give good offers during the festival season and they will surely do that because the festival season draws a lot of customers and no bank would like to miss that opportunity. But then, the rate that they offer will have to be above the base rate.
B&E: RBI has made it clear that they do not have issues in giving new banking licences to industrial houses? Is this a bad news for the exsisting players?
OPB: This is a philosophical thing. There are arguments both ways. In my view, if an industrial house gets a banking licence then the onus is on RBI to see that the things are done in the right manner. We all know that we need more banking facility to achieve the financial inclusion goal. Hence, we certainly need more banks in the system.
Read more.....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
