SBI, the 218-year-old bank, the largest in the world in terms of number of branches and customers, which is a leader in housing loans, education loans, and many such areas, is conducting a massive training program for all its staff with the slogan SuPer SBI – Great to Greater.
Started with the Bank of Calcutta on 2nd June 1806, the Bank of Bombay on 15th April 1840, and the Bank of Madras on 1st July 1843, and merged as Imperial Bank of India on 27th January 1921, the State Bank of India came into existence on 1st July 1955 through an Act of Parliament.
Today, SBI has more than 24,000 branches, including 239 overseas branches, 65,000-plus ATMs, 232,296 staff, an asset base of Rs. 500,000 crores, and made profits of Rs. 61,077 crores last year. It also has 82,932 Customer Service Points (CSPs) that provide 32 services.
It remains dedicated to national development and is regarded as a proxy to the Indian economy. Its slogans have been “Let’s Come Closer,” “The Banker to Every Indian,” and “Banker to Digital India,” among many more.
How to Become Greater from Great?
SBI has great minds to achieve that. Mine is a small suggestion, like the squirrel did to Rama, based on 39 years of service in the bank and everyday interactions with the citizens of our country.
1. Learn from History – Globally:
The first bank in available history, the Bank of Venice, started in 1157, does not exist today. Banca Monte Dei Paschi Di Siena (Italy) has thrived as the oldest surviving bank, with its majority shareholding held by the government.
In India, too, many banks have failed, except for those that were nationalized and a few old-generation banks like Federal Bank, South Indian Bank, and Catholic Syrian Bank, which were started during the freedom struggle and have survived. The new-generation private banks like ICICI, Axis, and HDFC were converted entities from the government, and now their majority shareholding is not with Indians.
If the government reduces its shareholding in SBI, ownership will transfer overnight to foreign investors. In fact, twice, the U.S. Secretaries of State have asked the Government of India to privatize SBI during their visits. We can’t say Trump and Elon Musk will not ask for it in the future.
In 2008, the Royal Bank of Scotland failed. Many global banks like Bank of America, Citi, and Deutsche Bank have had their downswings but have survived. Fannie Mae and Freddie Mac disappeared.
We have seen the fate of Global Trust Bank and many others, which had to be taken over by public sector banks. One of the former Chairmen of SBI, Mr. Rajneesh Kumar, in his memoir The Custodian of Trust, stated how the decision was made to send Mr. Prasanth Kumar, then DMD and CDO, to Yes Bank as Managing Director when it was in serious crisis. The decision was taken at Antilia, the palace of Mukesh Ambani in Mumbai. The bank turned around with SBI funds, and Mr. Prasanth Kumar continues in his role.
A crisis can come to SBI as well. Though it is considered “too big to fail,” the book Rethinc by Dr. T.T. Rammohan contains real histories of institutions that were once considered too big to fail but did.
History also remembers Mr. R.K. Talwar, the Chairman who did not bend under the Emergency rule of Mrs. Indira Gandhi. D.N. Ghosh, in his book No Regrets, explains how, as Chairman of SBI, he used the powers of the SBI Board to provide a computer increment—without which SBI would not have become a pioneer in technology. (Now, with amendments made to the SBI Act, that may be difficult.)
In 2006, when the bank’s market share was declining, the then-Chairman, Mr. O.P. Bhatt, organized an HR Conclave in Jodhpur, in which both the Officers’ Federation and the Workmen’s Federation participated. The Officers’ Federation made a detailed presentation through a PPT, which was appreciated and accepted. A joint declaration by Mr. O.P. Bhatt, Mr. G.D. Nadaf (Officer Federation), and Mr. Prafulla Patnaik (Staff Federation) was released. The bank regained its market share through joint follow-up efforts down to the grassroots level.
The bank has a proven mechanism called the Industrial Relations Committee/Central Negotiation Committee to address grievances with the Staff Federation and Officers’ Federation at various levels. However, for some years, there has been an attempt to dilute these mechanisms, which will be detrimental to the bank.
When the Career Development System was introduced based on recommendations from the Boston Consulting Group, the Officers’ Federation pointed out its flaws. A joint meeting with the Chairman, MDs, DMDs, and both federations was held, leading to some changes. However, even now, it is killing the team spirit and requires further modifications.
When McKinsey’s recommendations for dismantling the modules proved disastrous, Mr. Pratip Chaudhuri, as Chairman, rejected them.
Though Mrs. Arundhati Bhattacharya, as Chairman, wanted a voluntary retirement scheme, Mr. Dinesh K. Khara stopped it when he took over as Chairman at the behest of the Federation.
SBI must acknowledge the role of the Association and Union in making it greater than great. Many of the leaders are great motivators—better than the trainers used for motivation.
2. Staff is the Key:
In 2014-15, the bank’s business size was ₹29 lakh crores with a customer base of 27.32 crores. Business per employee was ₹12.24 crores, and profit per employee was ₹6.02 lakhs.
There were 80,531 officers, 1,01,648 assistants, 24,799 subordinate staff, and 15,831 watch & ward staff, totaling 2,22,809 employees in 2014.
In 2023-24, the bank’s business size has gone up to ₹86.84 lakh crores (tripled). The customer base has increased to more than 50 crores (doubled). Business per employee has risen to ₹37.38 crores (tripled), and profit per employee has increased to ₹26.20 lakhs (more than four times).
However, there are only 1,10,116 officers, 92,514 assistants, and 29,666 subordinate staff, totaling 2,32,296 employees. This is an increase of just 9,487 employees (only 4%), whereas business has grown by 300%, customers by 200%, and profit by 400%.
Despite digitization, customers still need to be serviced, which requires employees. The number of assistants has been reduced from 1,01,648 to 92,514, forcing officers to take on the work of assistants. They are truly suffering, and everyone in the bank is aware of this.
SBI can double its staff strength, which would lead to quadrupled business and profit. If HDFC can aim to create one HDFC every four years, SBI can achieve the same growth in just three years.
3. Conversion of Customer Service Points (CSPs) to Branches
SBI can convert the 82,932 CSPs into branch sub-offices or branches with one officer, two assistants, and one subordinate staff (who can also serve as watch & ward). The 32 services currently offered can be expanded, especially by providing small credit to farmers, traders, and MSMEs.
Does it look right for this great bank to have only 20 lakh SME customers with a loan outstanding credit of ₹4.33 lakh crores? Does it seem appropriate that the agriculture portfolio stands at only ₹3.05 lakh crores? Meanwhile, the bank’s corporate loan portfolio is ₹11.38 lakh crores, which requires careful monitoring, especially regarding loans given to the Adani Group of Companies and its subsidiaries.
4. Agriculture:
SBI was a pioneer in the Lead Bank Scheme, operating in the most backward districts as a lead bank, and continues to do so. It was also a pioneer in opening Agriculture Development Branches and establishing a separate vertical for agribusiness. SBI played a crucial role in the Green Revolution, White Revolution, and Blue Revolution. Now, it must promote integrated farming, the agro-economy, and fisheries, especially for traditional sea fishermen. This requires a dedicated vertical with an exclusive focus.
5. SMEs:
SBI currently has 864 SME branches out of a total of 22,783 branches. This number must be doubled, and the business must grow multifold. SBI has achieved this before, and it must do so again.
SBI Act: The State Bank of India Act, 1955 begins with:
“An Act to constitute a State Bank of India, to transfer to it the undertaking of the Imperial Bank of India and to provide for other matters connected therewith or incidental thereto.”
It further states the purpose of establishing SBI:
“Whereas for the extension of banking facilities on a large scale, more particularly in the rural and semi-urban areas, and for diverse other public purposes.”
This objective must always be kept in mind.
Constitution of India
The preamble to the constitution emphasises “We the People of India having solemnly resolved to constitute India into a Sovereign Socialist, Secular Democratic Republic. Sec 16 of the Constitution talks about Equality of opportunity in matters of Public Employment. Sec 14 under fundamental rights talks of equality before law. SBI is an extended arm of the State and it has to thrive to full fill these ambitions. Corporate BCs should be restricted if not stopped.
SBI has to look after the large number of small farmers, artisans, traders, SMEs, SHGs etc. SBI was doing this but in the last 10 years the share has come down. To become Greater from Great SBI should make every citizen an account holder in SBI for which he/she should be proud of and cater to their credit needs.
6. Board of Directors, Workmen & Non Workmen.
Till 2014 SBI had in its board an Officer Director & Employee Director. The bank has to take extra efforts to convince the Govt to appoint them. They have played an important role. They were in the customer service committee and their presence in the board brought accountability to other board members also.
7. Certain Course Corrections suggested
- The biggest Bank entered into an agreement with Reliance to hold 30% share holding in Jio Payment Bank which was not at all needed. It has not done well and SBI should quit from Jio
- SBI has entered into an agreement with Adani Capital for co-lending which is likely to be a disaster. Getting out based on the performance at the earliest is better.
- The Career Development System is flawed. Banking is a TEAM Effort. Rewarding a few frustrates the majority. Inspite of CDS score the Bank still uses Performance Appraisal Format for promotions which is not transparent. A transparent performance appraisal instead of CDS will be far better.
- Micro Management by Controllers has affected the Branch Managers. Many of them shout, threaten and even use transfer as a weapon. SBI requires a better work culture.
- Owning a Customer. The centralized processing is good but nobody owns a customer now. Somebody receives application, another verifies, yet another inspects and one another sanctions and disbursal is done by another. In Rural and Semi Urban branches this can be reversed. Relationship is important and the Branch Managers should have powers to handle advances. The west which introduced faceless banking is going back to one to one banking as customers feel more comfortable talking to a human being and take their assistance.
8. Future
SBI had been a pioneer in many things. Important one is Technology. It bought a software but tailor made it to suit the Bank’s requirement. SBI started its own Computer Development through SBI Institute of Computer Management. Buddy could not succeed . Yono is good but GPay has more customers. SBI should get rid of its collaboration with TCS, JIO and other companies as SBI has huge data of more than 50 crore customers. With AI things are changing every day. Dependence on a service provider is dangerous. Within 5 years SBI can pick up the best talents and become a pioneer and role model for others.
SBI has the best talents at the top at present and excellent youth at all levels, matured and hardworking. It also has a youth as General Secretary of the Officers Federation. It’s the appropriate time to think differently, take suggestions from below (which is already happening) and take into confidence both the Federations. Sure SBI is going to be greater and also remain as the Banker to every Indian.
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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