State Bank of India (SBI) has asked its subsidiaries to improve their performance, with Chairman CS Setty warning that underperformance will not be tolerated, Mint report citing people familiar with the matter.
Setty, who took over the helm of India's largest bank from predecessor Dinesh Khara last year, told the subsidiaries that its top executives are paid salaries as per industry standards, and hence, they must perform accordingly to justify that, the report added.
SBI will review all its seven frontline subsidiaries, starting from SBI Card and SBI Capital Markets. It will then move on to insurance and other subsidiaries, the report said. Notably, SBI has a total of 18 subsidiaries, out of which, two are listed – SBI Card and SBI Life Insurance.
The recent exits at SBI Capital Markets was a result of this approach, the newspaper further reported citing sources. It had earlier claimed that three senior executives had exited from the SBI subsidiary, as part of a restructuring exercise.
Moneycontrol couldn't independently verify the reports.
This comes after Finance Ministry asked public sector banks (PSBs) to look at monetising their investment in subsidiaries by listing them at bourses after further scaling up operations so that they realise a good return, PTI reported.
As a precursor to monetisation, banks should improve governance, professional decision-making and bring in greater operational efficiency in their subsidiaries, PTI had reported, adding that State Bank of India may look at listing SBI General Insurance and SBI Payment Services in the future after they scale up their operations.
SBI shares were trading in the green with marginal gains at Rs 817 apiece, as seen at 11.50 am. The stock has gained nearly 15 percent in the past six months, and currently has a P/E ratio of over 9.
Also read: Our LIVE blog on stock market updates
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
