Arundhati Bhattacharya: Why should there be different set of rules for public sector banks?

Mumbai, March 20:  Arundhati Bhattacharya, chairman, State Bank of India (SBI), will create history on April 1 when all five associate banks will merge with itself — in the largest such exercise in the banking sector — to blossom out as a single entity. She created history in 2013 when she rose from the ranks and took over as the first woman chairman of the 211-year old bank.

In an exclusive interview, she tells Manju AB that her life’s journeys are never with a complete roadmap but with a conviction that challenges can be tackled and goal post is never too far.

Is it necessary for SBI to demand a high monthly minimum average balance (MAB) of Rs 5,000 in savings accounts?

Arundhati Bhattacharya: There is an interest of 4% paid on savings bank account. Suppose someone is earning a salary of Rs 15,000, then for three days his account can fall below Rs 5,000. If you have Rs 60,000 in your account, you can fall below Rs 5,000 for many days, so it is the average of all the days in a month. In the urban areas, it is Rs 3,000, and in semi-urban areas, it is Rs 2,000. In rural areas, it is Rs 1,000. The Jan Dhan is zero balance.

According to RBI data, the Jan Dhan accounts have deposits of Rs 74,600 crore giving banks a free float?

Arundhati Bhattacharya: Yes, these accounts have money, but there are no restrictions on withdrawing the money. We pay 4% interest on these deposits. Every account is accompanied by a RuPay card which cost the bank about Rs 68 and the ATM infrastructure has to be built where every transaction costs Rs 18 to be paid to the card companies. We allow five free ATM transactions to our customers if they are using other bank ATMs.

Was the cost of running the demonetisation too expensive? Some private banks had shut their ATMs after the government waived off all transaction charges?

Arundhati Bhattacharya: The cost of demonetisation is pretty large. During the time of the demonetisation, it was the PSU banks which served the people. In many places, only the SBI ATMs were open. We refilled the ATMs regularly. Though the government waived off transaction charges on ATMs, we had to pay the card companies. The sheer logistics of transporting so much cash was quite large. Why should there be extraordinary expectations from the public sector when we are in the forefront of nation building?

HDFC Bank recently claimed that they offer five-star services...

Arundhati Bhattacharya: I don't accept that the private sector services are five-star and our services are not. I do not accept that at all. No one complains when the private banks charge high rates. Penalty for not maintaining minimum balance in a private sector bank is anywhere between Rs 450 to Rs 790 per month while for us it is Rs 20 to Rs 100. Why should there be a different set of rules for the public sector banks? Our internet banking site is by far superior to the others. It is the fifth most visited financial site globally. You don't achieve this by running shoddy services.

What will be the role of SBI’s subsidiary, Infra Management Solutions (SBIIMS)? What is SBI’s real estate valued at? Are you open to selling a part of this?

Arundhati Bhattacharya: The real estate is valued at Rs 35,000 crore excluding the assets of the associate banks and about Rs 15,000 crore is added to our tier 1 capital. We are also open to selling our real estate in areas where it is in excess and unutilised. This company will be manned by engineers and construction specialists who will negotiate on our behalf and also look after the upkeep of these premises.

Are you worried for your loans to the telecom sector? Reliance Jio, for instance, is running the longest promotional scheme to capture customers. Have you spoken to the government?

Arundhati Bhattacharya: Not just for us, it should be a matter of concern for the government as well as they are also loosing revenue because of these schemes. We have not exactly spoken to the government in so many words. But we have flagged it off at various quarters that banks have a substantial exposure to the sector. When you have such schemes, there is an impact on competition. Quarterly results of major telcos are pretty impaired. So, it depends on how long these schemes will run. If it is for a short period of time, these people can surely weather the storm.

Any anxieties about the mega merger?

Arundhati Bhattacharya: We are all set for the merger. We already had a template as two banks were merged. So, we worked on the template left behind by our predecessors. Our books of accounts are merged. Relocation of banks and ATMs will happen as we expand our foot print into new areas. We may take some branches a few kilometers away from where they are now. Branches which are set up in clusters in the older part of the cities may be repositioned in the newer parts of the cities. I feel the younger people in the associate banks will be happier to be part of a bigger bank like SBI. The older lot may find it difficult to relocate, and so, we have a Voluntary Retirement Scheme (VRS). But, we are not forcing anyone.

The total NPA pile is likely to cross Rs 9 lakh crore at the end of March 31, and SBI has more than Rs 1.5 lakh crore...

Arundhati Bhattacharya: Post the merger, SBI may end up with Rs 1.6 lakh crore gross NPAs, according to the consolidated figures, we have up to December 31, 2016. We will meet the RBI deadline of March 31, 2017, to clean up our balance sheet. Resolutions will also happen.

But isn’t the issue about over-leverage? Bhushan Steel and Essar Steel would have about Rs 1 lakh crore of loans taken together, almost equivalent to the total stressed debt in the sector?

Arundhati Bhattacharya: Yes, which is why we are saying that there should be a valuation of these assets. We should take some pain. We should take some write-downs and also some conversion of debt to equity. Reduce the debt burden. There is no point running these accounts to the ground.

In the restructuring schemes like Scheme for Sustainable Structuring of Stressed Assets (S4A) and Special Drawing Right (SDR), the share prices soar initially, when the schemes are getting approved by banks and then plummet when banks take over part of the shares?

Arundhati Bhattacharya: If you look at the SDR scheme closely, the Securities and Exchange Board of India (Sebi) has already given an exception. The conversion of debt to equity is allowed at par value and it will not trigger an open offer if we go beyond a certain limit. We have requested these provisions to be provided for in corporate debt restructuring (CDR) and S4A. The 10% conversion of debt into equity in a CDR is too less.

You want the CDR terms to be diluted?

Arundhati Bhattacharya: Yes. Not necessarily be diluted but changed if you allow the Sebi formula for conversion to be allowed into SDR to CDR. It is not dilution. If bankers have the right kind of mechanisms, we will be able to turn around these units. What is the basis of seven-year turnaround in CDR? It should be more like the time given under 5/25 scheme

State Bank of India website goes generic New web address is www.bank.sbi

Chennai, February 20 (IANS): The State Bank of India (SBI) on Monday announced rebranding of its website as bank.sbi. According SBI, the new domain name bank.sbi is the highest domain protocol known as generic top level domain (gTLD), an official statement.

"The SBI group has several businesses. For those wanting to do banking or want to know about the bank it is easier to type out www.bank.sbi." M.K. Rekhi, General Manager -Social Media.

The SBI group having presence in insurance, mutual fund and card may also go for such Generic top-level domain (gTLD). With this, SBI has become the first banking organisation in India to use a gTLD for its online presence and providing an exclusive experience of assurance and security to its customers.

"SBI being the largest bank has always been the pioneer in adapting new technology. SBI has always believed in providing high-tech yet secure internet experience to its customers. Bank's own gTLD is another step in this direction," SBI's Chairman Arundhati Bhattacharya said in a statement.

Bank's own gTLD aims at simplifying the digital experience of customers and brings in enhanced security against phishing and lookalike websites. Due to its non-replicability, a gTLD site like ".sbi" conveys an assurance to the customer that the site is authorised, genuine and is not an inappropriate or phishing site.

The existing site of sbi.co.in will continue till customers get used to the new avtar of SBI's secure website.

SBI's Work-From-Home Option for Women, How Feasible is the Move?

SBI Chairman Arundhati Bhattacharya’s novel idea of providing women employees of SBI with a work-from-home option is sure to stir up a hornet’s nest in the coming days.

Arundhati Bhattacharya, the first woman to head the bank ever, has said that she would be looking at ways to increase retention of women staff. While 38-40% of recruits were women, their high dropout rate and absenteeism resulted in women accounting for just of 20% of the workforce.

At present, the strength of women employees in the total workforce of the bank is 45,132, which constitutes slightly more than 20% of the total staff strength of 2,22,033. Bhattacharya said that the dropouts were for various reasons, including looking after children, to relocate or to look after the elderly.

After she took charge, the bank announced that it would allow women to take a two-year sabbatical from work in case they want it for children's education or taking care of parents.

Maybe Ms. Bhattacharya’s initiative doesn’t stem from a modern-day compulsion alone. In fact, in the late 18th and early 19th century, around the same time SBI was founded, working women, especially mothers, in Europe increasingly found it difficult to combine paid labour with familial responsibilities due to the demanding nature of the new industrial job in textile and clothing factories.

As their contribution to the aforementioned industries couldn’t be underplayed, the concept of ‘separation of workplace from home’ was done away with in order to accommodate their twin roles. Thus, working mothers found solace by engaging with home-based work through the setting up of small-scale workshops.

Though the Industrial Revolution redefined the spheres of ‘domesticity’ and ‘home’ as exclusively feminine, it also brought about a transformation of workplace and newer representations of gender.

Thus male workers/employees came to be solely engaged in economic activity while staying aloof from child-raising and household chores. Women, on the other hand, had to constantly concern themselves with maternity and motherhood.

A lot of what sexual division of labour at the professional level shows us from the past continues to impact working women of the present. Of course, the ‘natural’ order of things cannot be compromised for any revolutionary change in gender functions thereby work-from-home option ‘has’ to be a convenience only for working mothers.

Over the years, feminist groups have been calling for equal pay and status for women in the professional sphere. At the same time, there has been an outcry over the reservation tactic employed to ‘privilege’ women, as achieving equality through a social transformation is a long-drawn process.

The SBI initiative makes sense only in case of maternity leave and not for any other reason, like child’s education and taking care of parents as cited by the company, which could be carried out by a working father as well. Why does such a facility favour only women when it should ideally be granted on the nature of given work irrespective of gender considerations?

So, a more comprehensive solution would be to extend this benefit even to male employees who, albeit in minority cases, would want to stay on at home for the same purpose.

The doubts over technological feasibility can wait. What demands far greater attention is the gender disparity it creates in the quest for a diluting a patriarchal setup, both in the domestic and professional spheres.

Apart from this flaw on the gender front, the move has been tried and tested by American multinational company, Yahoo whose CEO Marissa Mayer decided on the ban on work-from-home after spending months frustrated at how empty Yahoo parking lots were and after consulting Yahoo's VPN logs to see if remote employees were checking in enough.

Her argument was quite logical, "People are more productive when they're alone, but they're more collaborative and innovative when they're together. Some of the best ideas come from pulling two different ideas together."

Lots of people around the country and world work from home these days, and many of them - particularly mothers - seemed to view Mayer's ban as a threat on their way of working.

But productivity would take a huge hit due to the lack of a monitoring system and a phenomenal risk of many employees availing the benefit as opposed to an office desk job. Instead, a more plausible solution would be to limit the period of work-from home duties to a maximum of 2-3 years in the case of employees who’ve applied for leave owing to secondary domestic responsibilities.

Another way to prevent many employees from availing this benefit would be to introduce a pay-cut of 20-30%. This is to be done keeping in mind the ‘additional advantages’ enjoyed by work-from employees as they wouldn’t incur either travel (thereby saving time) or overhead expenses (like fuel and maintenance). On the flip side, it could create more job opportunities in any sector providing the work-from home option.

There is also an environmental good, though small: resultant reduction in the use of private/company vehicles brings down pollution levels.

There has to be a complete overhaul of the labour laws allowing paid and casual leave in the event of an employee already benefiting from the work-from home scheme. In extremely veritable cases, the remote employees could be allowed flexible working hours depending on the time they would have to invest for other purposes.

However, as of now, the idea appears too far-fetched and unattainable. Perhaps, the single-most impediment would be on the technical feasibility considering the geographical spread of the SBI’s branches.

Instead, why not devise a system by which employees aren’t subjected to regular transfers far from their hometown? Or maybe even setup crèche facilities for a temporary period?

It is, therefore not at all surprising that modern private banking institutions like HDFC and ICICI haven’t mulled over such innovations precisely due to the fallout in productive capacity of the company.

Thus, the scheme is beset with a two-fold complication: Firstly, the need to extend the option to all employees if introduced as a company policy and secondly, to develop suitable technology to oversee the work done by them.

Ultimately, the wisdom of the primary stakeholders, i.e. the employees and industry experts have to be consulted before any fast-track measure is in the offing. Like Margaret Heffernan once said, “For good ideas and true innovation, you need human interaction, conflict, argument, debate”.

Written by Carl Jaison on The Seasonal Magazine, Published on December 16, 2014

SBI looking into work from home option for women employees

Mumbai, December 15:  State Bank of India (SBI) is studying the technological feasibility of allowing women employees to work out of home for some functions. The bank's IT department will advise the management whether it is possible to have systems in place for monitoring and supervising work being done remotely.

Arundhati Bhattacharya, the first woman to head the bank in 208 years, had said that she would be looking at ways to increase retention of women staff. After she took charge, the bank announced that it would allow women to take a two-year sabbatical from work in case they want it for children's education or taking care of parents.

Speaking to TOI while flagging off the SBI Pinkathon, a marathon for women aimed at raising awareness of breast cancer, Bhattacharya said that, while 38-40 per cent of recruits were women, their high dropout rate resulted in women accounting for just of 20 per cent of the workforce.

At present, the strength of women employees in the total workforce of the bank is 45,132, which constitutes more than 20 per cent of the total staff strength of 2,22,033. Bhattacharya said that the dropouts were for various reasons, including looking after children, to relocate or to look after the elderly.

"We try to accommodate staff where transfers are concerned, but right now we are not able to provide flexible timings. We are looking at whether it is technologically possible to allow working from home," said Bhattacharya.

She said that the bank has chosen to support the Pinkathon to raise awareness of women's health.

PSU Bankers are paid poorly: SBI Chairman

New Delhi, December 11: Lamenting that bankers are paid very poorly in India, especially at public sector banks, SBI chief Arundhati Bhattacharya today said there is an urgent need to provide better remuneration to attract good talent.

Bankers are paid poorly in India as compared to their counterparts elsewhere in the world, she said.  “Let me start with income of banking professionals in India. Here, 70 per cent of the banks are in public sector and they are paid very very poorly compared to market,” she said at Delhi Economic Conclave here.

The SBI chief said there is urgent need to improve quality of board members by providing them suitable remuneration so that the overall efficiency improves.

“We are very blessed in that. SBI has invariably had very good quality board. But that may not be true across (other banks’) board. One of the reasons is very low remuneration that is given to the board directors,” she said.

“If you are trying to attract best in the field, they have to be remunerated accordingly. We must insist on people who are coming into the board having sufficient hands on experience in both planning and execution in their respective areas,” she said. So, this is something that government can easily implemented and should be done, she added.

The comments come about a week after PSU bank employee unions went to a four-day relay strike to press for early revision of wages.

With regard to governance, she said P J Nayak Committee has very clearly laid out certain roadmap as to how governance can be taken forward.  “I believe the government is looking at it. While they do look at it, I believe there are very some low-hanging fruits and those could be easily implemented within a short period of time,” she added.

Talking about changing regulation in tune with the present system, Bhattacharya said India has over 60 Acts and multiple rules and regulations that govern the financial system at the moment. “Many of the laws are from 1950s and 1960s. The banking regulations themselves they were established before ATMs, credit cards, internet banking, investment advisory, private banking, mutual funds,… whole lot of other things,” she said.

“These acts have been amended from time to time to keep pace with changing reality but the legal foundations have remain more or less static and as the result the framework is very complex and inconsistent,” she said. “Occasionally, it is also open to regulatory arbitrage. So, we need to look at these things also holistically and move the laws to be in tandem with the times,” she added.

With regard to improving governance, Bhattacharya also pitched for a good Whistle Blower policy with the objective to protect innocent and punish guilty.

“In the area of governance, its very important especially in the public sector banks to nurture and have a good Whistle Blower policy to ensure that people who actually give right information are properly rewarded and those who actually misuse the system they are penalised,” she said.

“We must free the public sector from the disgruntled and weapons of anonymous and superfluous complaints that they use. These complaints very often contain allegations that are totally full of lies but a lot of resources get tied up in looking into these things,” she added. Good people who have taken strong decision should not be unnecessary paralysed on account of false allegations, she said.