Numbers and US

Story that numbers tell us

SBI’s Expansion Plan

leave a comment »

SBI is in process of transforming itself from senile, laggard observer to an enterprising youth who is not afraid to try novel things to achieve unachievable dreams ( for government owned arms by their own set standard).

Year 2006, O.P.Bhat took command of SBI as the new chairman. He identified three major cancerous concerns that were keeping SBI far behind private banks. ( Source O.P.Bhat’s interview from Mckinsey Quarterly)

1:  Most skillful, experienced professional of SBI were taking VRS, and they were joining private sector banks with their vast grassroot level experience. He stopped the VRS scheme.

2: SBI was not ready to serve the upwardly mobile , high earning young generation of the country. It consisted a bunch of unmotivated, directionless group of workers. He started to instill a sense of ownership in employees. Few programs were launced with successful results. Senior professional from all over India were invited for brainstroming sessions.

3: SBI were lacking in treasury operations. he realigned it’s treasury operations.

Yesterday, I saw his interview in CNBC TV18. The major points that come to mind:

1: He is looking for consolidation. ICBS, a chinese bank, is ten times larger than SBI. SBI in it’s current form is too small to serve large corporates of India. If things has to go by his pace, he would like all SBI’s ( SBI mysore, indore..) to be consolidated under one umbrella.

2: The world is getting globalised. So he would like to serve at least the indian MNC abroad also. Now SBI’s business in india compared to abroad business is  88 to 12.  He would like this ratio to be 75:25. For that they might need to acquire some foreign banks.

3: Goverment is looking for divestment, they might decrese their holding to 51%.

4: Grandchildren have more freedom. All subsidiary of SBI like SBI cap, they don’t have to adhere rules like parent SBI. They hire people in market rate, and for all practical purposes work as private organization.  I don’t know why and how is this the case, but that’s what I learned.

In the end, it really gives satisfaction to know that a bank that we always, since childhood, considered synonyms with banking is doing good. Logically, if we apply Bastitiats’ teachings, I am not sure would it really matter for economy, country or us, whether SBI or any private bank does well. But, nonetheless, it is a satisfying news.


Written by SK

August 3, 2009 at 5:17 pm

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Humor, Sarcasm from & on Silicon Valley

Let's have a laugh together

Product Thinking

Peeling the layers of products that delight is the best place for your personal blog or business site.

%d bloggers like this: