Bank on decentralisation

The changes that have been taking place in State Bank of India (SBI) since July 2006 coincide with the chairmanship of O P Bhatt who took over in July 2006, ending his five-year term in March 2011. There is no doubt that the bank’s performance data in the last five years has improved. Despite the handicaps that the bank faced in the form of highly unionised staff at the branch level, and the demerits associated with public ownership, the bank has done well, surpassing its peers on various business indices.  SBI’s excellent track record can be attributed to Bhatt’s leadership. Bhatt introduced certain changes to achieve the stated objectives. However, these changes have made branch managers the weakest link in the whole system. It may be recalled that former SBI chairman R K Talwar said every branch manager represents the chairman of the bank. Accordingly, Talwar strove to decentralise the decision-making process to strengthen the branch manager’s position. Since then, SBI has come full circle with Bhatt weakening the branch manager’s position. Bhatt and his team believed that centralising management would speed up the decision-making process. If the bank were to take an independent survey of customer satisfaction at branches, the data would speak for itself. The computerisation of SBI branches has done little to improve service levels. Also, one does not see or experience the performance celebration at branch levels for reasons best known to the branch staff.  However, having taken the lead in all business parameters, it is for SBI’s next leadership to sustain the bank’s performance in the years to come —this would be the best tribute to Bhatt’s leadership. This is on the assumption that the government (and the Reserve Bank of India) does not renew his tenure, although he deserves it. K.V.Rao, Bangalore