On September 30, 2013, the last day of Pratip Chaudhuri at State Bank of India (SBI) as the Chairman, there was considerable suspense in the Mumbai headquarters of the bank on his likely successor. There were four names — all managing directors of the bank — who figured prominently in the discussions. And Arundhati Bhattacharya’s name was the least mentioned one. But, far away in New Delhi, top babus in the government already knew the name. The then Union finance minister, P Chiambaram, had already cleared Bhattacharya’s name on September 25. The government announcement appointing Bhattacharya as the first ever woman chief of the country’s largest lender came soon after the clearance from the appointments committee of the cabinet, headed by the then prime minister, Manmohan Singh. Bhattacharya, who was till then the chief financial officer and the youngest MD among the four (she was 57 then), took charge as the new SBI chief. That was a surprise choice.
Seven years later, Bhattacharya continues to surprise the industry with her career choices. After her stint with Swift India, a banking technology service provider, Bhattacharya will soon take over as the India head of US cloud-based service provider Salesforce.com Inc. Bhattacharya is entering the US technology firm at a time Salesforce wants to ramp up cloud storage and digital service business in India, creating more than 500,000 jobs and $67 billion in new business revenues in India through 2024, according to a 2019 report by International Data Corporation.
Why would a banker choose a technology firm? Bhattacharya isn’t a stranger to technology assignments. Till recently she was associated with banking technology enabler, Swift India. Speaking to Moneycontrol, Bahttacharya said she isn’t averse to the idea of multidiscipline and multiple careers, which according to her, will be the future. “I come from a liberal arts background. That’s how things will be in future. Multidiscipline, multiple careers,” Bhattacharya said, adding that she wouldn’t want to comment on the ongoing issues in the Indian banking sector.
During Bhattacharya’s tenure SBI witnessed technology platforms advancing by several notches, her former colleague said, adding that she loved gadgets and worked to integrate banking services to new technology platforms. Bhattacharya is remembered by former colleagues at SBI as a chief who had thorough subject knowledge of industry and finances. “She was an excellent people manager and had earned praise from all colleagues for teamwork,” said the colleague quoted earlier.
The NPA riddle
However, not all was rosy on SBI’s books during her tenure. Bhattacharya’s stint in SBI had witnessed stress in the bank’s books rising substantially and a sharp decline in key parameters such as return on equity that fell from 15.85 percent in March, 2013 to negative 2.13 percent in 2018. The total gross NPAs, between 2013 and 2018, rose to 4.75 percent in March, 2017 to 10.91 percent in March, 2018. Net NPAs, after provisions and taxes, rose from 2.10 percent to 5.73 percent in the same period. “But most of the loans that had turned bad was inherited from the previous regime,” said a former colleague of Bhattacharya. “Bhattacharya was at the wrong place at the wrong time,” said the person.
It was not uncommon in those days an outgoing PSU bank chairman passing on most of the NPA provisioning burden to the successor in a bid to show a clean book. Naturally, the new person will be welcomed with a shock as he/she will have to make entire provisioning in the subsequent quarter leading to a sharp fall in the net profit numbers. To add to the woes, Bhattacharya’s term at SBI coincided with Raghuram Rajan’s war on NPAs. It was in 2015 when Rajan initiated the mega NPA cleanup exercise shaking up the banking sector. The NPA cleanup uncovered dirt hidden deep under the carpets of Indian banks causing the industry NPAs surge from around Rs 2 lakh crore to Rs 9 lakh crore over a few years. A slowing economy added to the banking sector's worries.
Despite the stress on SBI’s books, Bhattacharya’s leadership stood out, especially when the SBI group reorganisation activities she spearheaded reached the concluding phase. Bhattacharya played a key role in integrating the group subsidiaries to the parent, which was a long-pending proposal until then. The merger of five subsidiaries - State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad - with SBI came into force from April 1, 2017.
At 64 and after four decades in the banking industry, the veteran banker is set for her new assignment.