An Interview with Shri P.N. Venkatachalam Managing Director and Group Executive(NBG), State Bank of India March 26, 2004

Q:   In your career spanning 36 years, banking must have undergone a sea-change.  Could you give us your views on the major changes you see in work,  in attitudes and in the industry itself?

A:  Banking Industry today, has become very competitive and complex.  Customers, whether depositors or borrowers, have a variety of financial options to choose from. Their expectations from the Banks regarding service quality are indeed  high.  Marketing and customer relations management have become  important, which were absent in those days. I also see a positive change in the mind-set of the staff, more so, in the last five years.  The staff, especially the youngsters, want to excel in their career and resultantly, are putting in their best.

Q:   Can you please recall a few of your interesting assignments?

A:  My assignment as Dy. General Manager, Overseas Branch, Chennai (1991 - 94) was a satisfying assignment, in that, Overseas Branch, Chennai, was the most prominent forex branch in South India.  Even in those days, we were clocking Rs.5000 crores of merchant forex turnover per annum, more than that of even some banks.  The courier people used to tell me that I was their single largest customer in the whole country.  Everyday, we were negotiating about 150 export bills, not to talk of other instruments.  Later, some divisions like NRI and Leather got spun off from Overseas Branch and have established themselves well.

The stint at CAG, Delhi was also challenging.  I was asked to open CAG Office in Delhi in 1996.  Those were the early years of CAG set-up and it was not easy to start one and make it a success, given the Circle's perception.  I had only about 4/5 officers with me.  We worked as a team and made it possible.

Recently, until about 2 years ago, I was Managing Director of State Bank of Travancore.  The loyalty of staff in our associate banks is amazing and needs to be emulated.  I really enjoyed my stint at SBT. Thanks to the team work, the Bank scaled new heights.  It also secured the highest rank given by RBI, a distinction shared by only 4 other banks in the country then.

Q: Where does SBI stand today?  What in your opinion are our major strengths?  And major weaknesses?

A:   SBI is poised for take off into a different orbit.  The full computerisation and single window should be a great advantage. Further success could come once the core banking and BPR are in place.  SBI can indeed be a star. As for strengths, I would count the brand equity, the culture of integrity and excellence in some pockets. As for weaknesses, I think we are not fast enough to respond to the market and at some places, still function as a 'Sarkari' bank.  Also, our customer service has to improve, from the number of complaints I get everyday.

Q:  Whether we need to compete with foreign banks and new generation private banks?  What incentives can we give to our performers?

A:  We have been competing fairly well in certain areas say in corporate finance and retail finance.  However, the business models of these banks are different Private banks etc. rely more on direct marketing agents who are aggressive in sourcing assets as well as liabilities.  We have to necessarily free our front-line staff for sales and marketing.  This would call for re-training and re-tooling of our human resource.  Also, some target-based incentives may have to be built in for such arrangements.  Be that as it may, the best incentive is by recognising the contribution of star performers.  They have to be rewarded with faster career progression at all levels.

Q:   Do you foresee further rightsizing in the industry as a result of technological and other changes?

A:  I think there are too many banks around.  I do expect some mergers and acquisitions - including by some foreign banks.    Perhaps, there would be about 10 major banks at the end of the day.

Q:   What would be your advice to a new Officer joining the Bank?

A:   i)   To have a positive view of things - always.

       ii)  To carry people with you.
       iii) To be fully involved in the job.
       iv) To equip yourself with readings on Finance and Economics
       v)  To generally, pursue excellence.

Q: Competitors specially private sector banks are advertising and marketing aggressively.  Do we need to up our efforts in this regard?

A:  I agree that we have to advertise ourselves and our capabilities more.  Having said that, success can come only by hard work in the field - better marketing and better customer service.

Q:  The younger generation seems to be more inclined for Banking with the new age private sector banks.  What do we need to do to bring them to our books?

A:   Yes.  This is a serious issue.
i) Offer more technology products like inter-net banking, ATM, etc. and publicise these well.
ii) Choose younger staff for going out and marketing in Colleges and Companies.  We
should have young staff who can empathise with the target group.

Q: Do we need to redefine our role in the international market given the changing economic dynamics in the country.

A: With India itself becoming more powerful economically, there will be increasing scope for our Bank to ramp up our international operations and profits.  Apart from opening new offices quickly, we can also look at acquiring banks, selectively.  We have the capabilities to become a Top Asian Bank.