State Bank of India’s assets will jump to about ₹40-lakh crore in four years from ₹22.59-lakh crore as at March-end 2016, propelled by the proposed amalgamation of six banks with it and the growth in the Indian economy, according to Chairman Arundhati Bhattacharya.
The six banks that are expected to merge into India’s largest bank by March 2017 are its five associate banks — State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore — and the Bharatiya Mahila Bank.
As at March-end 2016, the combined assets (advances plus investments) of SBI and the five associate banks stood at ₹28.62-lakh crore.
“I am told by revenues probably we will be 45th amongst the top 50 banks in the world. But hopefully, this will go up further as the Indian economy grows. If you look at the top 10 banks today, there are three Chinese banks. The reason for this is mainly because of the growth of the Chinese economy.
“So, if the Indian economy also grows on similar lines then I see no reason why we shouldn’t grow big either. I would say that we would definitely improve our rank, going forward. In the next four years or so, we should have a balance sheet (by assets) of ₹40-lakh crore,” said Bhattacharya.
Elaborating on the topic of consolidation, the SBI chief, in an interaction with BusinessLine, said there are a lot of inefficiencies right now on account of duplication.
She observed that “if you have six corporate centres, six treasuries, six of everything, then if you bring it down to one of everything, obviously there will be some savings. It (savings) will come in the corporate centre (that is, in the administrative set-up), it will come in treasury, it will come in the large corporate and mid-corporate (verticals).
“We will get good skilled staff. So, if treasury gives me some people, large corporate gives me some people who are well-trained, we can deploy them in proper places so as to make our operations even better. So, to that extent, I think, overlaps will be taken out, inefficiencies will decrease.”
Staff issue On the possibility of the consolidation exercise rendering staff surplus, Bhattacharya saidsome excess staff, around 12,000-13,000, will be there post merger.
“But the fact of the matter is that we are also seeing attrition at the rate of 13,000 per year. So, in two years or maybe even sooner, whatever is the excess will get taken out.
“Some 13,000 people are retiring every year from the group. So, to that extent, it is natural attrition. So, I don’t think handling excess staff is an issue,” she added.
Bhattacharya emphasised that SBI and its associate banks are very much alike. “And if we put it together, we will be able to make it more efficient, curb redundancies, and therefore, make a commercial sense out of the whole organisation,” she added.