WAR ON NON-PERFORMING ASSETS.
MUMBAI -- The new chief of the country's largest bank has said that the war on non-performing assets has intensified and that non-performing managements have no reason to continue being in office.
"There is no way that anybody can say that the war against NPA is over or that we are going to lessen the intensity. If anything, we are going to increase the intensity. Besides continuing to do what we did, we will use a lot of weapons to control the NPAs," said Arundhati Bhattacharya, chairperson, SBI, in her first interaction with the media after taking charge.
According to Bhattacharya, the new weapons would be analytics using information technology. The bank will also rationalize structures on how NPAs are managed and who takes up the issue within the bank and at what stage in order to get better and quicker responses. "We will also be looking at how to cut down the time span that we normally take for resolving NPAs by cutting down processes so that the turnaround time is less," she said. In the case of retail and farm sector, the bank is focusing on creating teams that will get down to the grassroots and contact each and every defaulting borrower and ask them to repay. According to Bhattacharya, controlling NPAs will help the bank improve other ratios such as return on equity and return on assets.
Elaborating on the scope for changing managements of defaulting companies, Bhattacharya said, "At this point, it is very difficult to bring about a change in managements, partly because earlier we did not take pledge of promoter shares. Also, while trying to sell a particular unit, there are issues. For instance, in businesses such as aluminium and steel, the permits for the ore are with other companies. But having said that, everyone in the banking industry agrees that should the management not perform, they have no right to be there and they should be changed."
On the changes that she proposes to bring in as the first woman chief of SBI, Bhattacharya said, "As a woman, I think that some problems are peculiar to women. I would try and be more sensitive to them. When I was in SBI Caps, we introduced a 6-year sabbatical for employees without pay as against 13 months in SBI. Any employee can take three sabbaticals of two years each." The only condition was that the sabbatical was available to only 5% of employees on first come, first served basis as it was a small organization.
Bhattacharya said that women usually take a break three times in their career. One is when they get married and have children. Second, when their kids are in class 10 or 12 and the third, when either parents or in-laws fall sick. "Whether I can replicate this sabbatical in SBI, I don't know," said Bhattacharya. However, she said that she has already taken a decision in the bank to remove the cap on the number of transfers that an employee can seek on account of a spouse relocating.