State Bank of India reshuffles portfolios of senior executives

State Bank of India (SBI), the nation’s largest lender, has reshuffled the portfolios of senior executives even as Pratip Chaudhuri, one of its deputy managing directors (DMD), emerged as the front-runner for the chairman’s position, which will fall vacant after O.P. Bhatt retires in March. The SBI group, which controls a quarter of the total banking assets in the country, has promoted some chief general managers as DMDs and reshuffled the portfolios of some of its existing DMDs, particularly at the risk and human resource divisions. In early December, the finance ministry had interviewed State Bank’s four DMDs—Chaudhuri, Hemant Contractor, Diwakar Gupta and A. Krishnakumar—to identify the successor of current chairman Bhatt. Before that they were interviewed for a post of managing director (MD) too. Chaudhuri, the front-runner for the post of chairman after Bhatt’s retirement, now oversees the bank’s foreign operations.  Traditionally, SBI has had two MDs and close to a dozen DMDs. Currently, it has only one MD; a successor to S.K. Bhattacharya, who retired in October, has not yet been named. R. Sridharan, the lone managing director, is in charge of associates and subsidiaries. Unlike other public sector banks, SBI has split the position of chairman and managing director. Both its chairman and two managing directors are generally selected from within the group. The retirement age of top officials in SBI, including the chairman is 60. The bank has named DMD Contractor, who was earlier in charge of corporate banking, chief financial officer in place of S.S. Ranjan. The five new DMDs are Santhosh Nair, Shyamal Acharya, Arundhati Bhattacharya, R. Venkatachalam and Shivkumar. Among the new DMDs, Nair will take charge of corporate banking, a portfolio that was earlier handled by Contractor.  Acharya, who was chief general manager of Mumbai circle, is taking over as DMD, mid-corporate group, replacing A.P. Verma, who has been named chief credit and risk officer.  Among the remaining new DMDs, Bhattacharya, who was CGM, Banglore circle, has been appointed corporate development officer, replacing N. Raja, who is set to retire on 31 December. Shivkumar, who was a CGM in Hyderabad, has been promoted to DMD but is yet be given a portfolio. Ranjan is also waiting to be assigned a new portfolio. Lack of adequate talent among public sector banks has been a subject of debate among policymakers for quite sometime now. The compensation offered by state-run banks is far less than what the executives of private and foreign banks earn. In September, Reserve Bank of India governor D. Subbarao said that in the absence of a suitable compensation package, state-run banks would lose talent to private sector lenders. “The executive compensation in the public sector, as is well known, is lower than that in the private sector... If public sector banks are required to compete with private sector banks on a level playing field, there is a good case for compensating them too on a competitive basis,” Subbarao said.