SBI and Bhatt

Now that State Bank of India has been downgraded somewhat by Moody's, the time has come to revaluate the tenure of its last chairman, Mr O. P. Bhatt. Four questions need answering. First, to what extent are decisions taken by him responsible for SBI's ignominy; second, what was the RBI doing about these decisions; third, why did the Government, which owns SBI, not rein him in; and fourth, what was the Board doing? The first question has an obvious answer but it doesn't solve the problem. The answer is that had it not been for decisions taken by him, the SBI would not have been looking at so many loans that will not be repaid. But he can always plead contextual judgement. We will have to leave it at that. As to the RBI, it got into a running battle with SBI from Mr Bhatt's second year as chairman. It did its best to restrain him but failed. Its representative on the SBI board would have a few stories to tell. Someone should ask her. The third question is about the Government. It is not as if the Finance Ministry didn't know of the too-clever-by-half approach of Mr Bhatt. So why did it not have a quiet word with him to do things by the book? This brings up the fourth and most important question: what role did the Board play and what role was it assigned by Mr Bhatt? What was the Executive Committee through which he operated and who were on it? Everyone in the banking circles knows the answer. It's the public's turn now, to be told. Lest someone think that I am, as they say, going after Mr Bhatt, let me say this: a downgrade of the SBI is no small matter nationally, and Mr Bhatt needs to answer some questions. Any former chairman under whom the bank took such decisions would have to do as much. 

HBL