[sbinews] SBI: Learning to sprint -Businessworld Annual Special Issue

  • From: rspai@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Thu, 30 Oct 2003 07:33:10 +0500

The following article appears in the latest issue of Businessworld - The BW 
Real 500- an Annual Special Issue containing comprehensive rankings of India's 
Top 500 companies. The article gives a snapshot of the current and future 
scenario in our Bank. 

State Bank of India : Learning to sprint 
SBI is no longer banking on sheer bulk to win 
Ranju Sarkar
Size is no longer might. Government behemoths used to lording over their 
sectors are waking up to new market realities. Tiny, nimble players are 
catching up fast. Which is why you see organisations like the State Bank of 
India (SBI) changing today. 
Earlier, its massive network of 9,000 branches was enough to keep SBI's vaults 
full. No longer so. Today, to stay ahead, it will have to woo customers spoiled 
by the facilities offered by rivals. "The way business is done is changing," 
admits P.N. Venkatachalam, managing director, SBI.

Venkatachalam feels that the bank needs key people who understand technology, 
marketing, strategy and operations. And there's only one way of going about it. 
"Everything boils down to people - can I reskill, retrain and retool my people 
in good time?" he wonders. Venkatachalam's concern is understandable. Most of 
SBI's employees are 50-plus and lack the skill-sets to meet the needs of 
today's busy customers. Take home loans. For all its new-found aggression, SBI 
still waits for people to walk into its branches. But today's market dynamics 
demand that it service the customer at his doorstep.

The private banks have been extremely aggressive through the direct selling 
associates (DSA) model. SBI expects its employees to play that role. "I have to 
retrain our people so that they are comfortable with concepts of CRM, 
marketing, and cross-selling banking and insurance products, credit cards and 
mutual funds," says Venkatachalam. A good start has been made with its tie-up 
with Maruti Udyog; SBI now finances over 4,000 cars a month.

Given the financial clout enjoys, SBI thinks it could be an important player in 
the treasury market. "The bank has the resources. If only I can build 
sufficient capabilities, upgrade my technology platforms for dealing and 
trading, I think I can definitely take advantage of the movements in the market 
without risking my capital," says Venkatachalam. Apart from treasury, foreign 
exchange and structured finance are other key areas where it could do with some 
more people. Some have been trained, but not in the required numbers. ''I would 
like to have 100 people sitting in my dealing room. But we have less than 10,'' 
says Venkatachalam. 

Today SBI offers plain vanilla credit products. But it would like to offer 
structured products that suit customer needs: bundle credit with forex, or a 
forex loan with an interest and currency swap, bundle credit with forex, or a 
forex loan with an interest and currency swap. Likewise, it would like to 
understand how the retail market is going to be five years from now and how it 
could minimise risks: should it securitise its loans and sell them? Or should 
it invest in securitised loans of others? 

Meanwhile, SBI has put in place a system of fast-track promotions for potential 
leaders. And, for the first time, it has taken 22 people from management 
institutes to work in areas like treasury, marketing and credit management. 
Next year it plans to hire 100 MBAs directly from the campus.
Obviously, it plans to provide them a separate career path. The implementation 
of the core banking solution will result in huge redundancies. It may come up 
with a separation scheme, but the challenge for SBI would be to re-deploy these 
people in front-end jobs.


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