Search the Internet          Tips  Sites: Finance, Investment

Tech, retail thrust tops new SBI chief agenda

BS Banking Bureau in Mumbai

An hour after taking charge of the country's largest bank, State Bank of India chairman A K Purwar, in this first interview to the press, said the main focus for the bank will be upgradation of technology.

With little credit off-take, the bank will continue its retail thrust and introduce more innovativeness in its retail basket of products. In its retail drive, Purwar said, SBI will focus more on the utilisation of SBI group synergies.

Does this hail the merger of SBI and its seven associates? Without ruling out the possibility, Purwar said: "We need to see that the entire group gains. Following global practices, merger seems to be one solution, but we also need to take care of the fact that each associate bank of SBI has its own strength".

Merger of SBI and the seven associates hinges on timing, which will become clearer after SBI completes its IT initiative, said A K Batra, SBI managing director and group executive.

"Presently, we are engaged in an ambitious project which has to be completed within a timeframe of two years. The question is whether the time is right? How much will it cost? And the question of taking the manpower with you," he pointed out.

The merger seems to be on the cards considering that the technology plan also encompasses the associate banks as well. The entire business of SBI will be re-engineered through the Rs 500-crore (Rs 5-billion) IT initiative over a period of three years, said SBI managing director P N Venkatachalam.

Pointing to the importance of the gradual shift towards networking of branches, Purwar said that in a computerised environment it does not make sense for branches to operate as single stand-alone entities. The shift towards total networking of branches in all the major cities will be completed over a period of 24 months, he stated.

Asked whether the IT initiative would result in some employees being redundant, Purwar said that, with SBI aggressively pursuing a retail thrust, "branches will function like supermarkets, and excess staff will be redeployed for marketing a host of products". He thus ruled out a second round of VRS in the near future.

Asked how he saw SBI's entry into life insurance, having initiated the entire process years back, Purwar said: "With SBI's credibility with the masses, once our branches start selling products, sky is the limit".

SBI Life Insurance, where SBI holds 74 per cent, intends to capitalise on the bank's captive business, and will initially start selling policies from 200 branches.

On the beleaguered 2,184 MW Dabhol power plant, Batra said, SBI, as a prudential measure, had made a 10 per cent provisioning in the second quarter ended September 2002 against its funded liabilities of around Rs 500 crore (Rs 5 billion). "Dabhol project should start generating power in three to six months."

Powered by

ALSO READ:
Bill Gates in India
More Money Headlines