Sriram has been working as the MD (Corporate and Global Banking) in SBI since July 2014.
Sriram will take charge as the Managing Director and Chief Executive Officer (CEO) of IDBI Bank, whose existing chief MK Jain was recently appointed as the Reserve Bank of India (RBI) deputy governor.
The Appointments Committee of the Cabinet has approved the appointment of Sriram as Managing Director and Chief Executive Officer of IDBI Bank for a temporary period of three months with effect from Jain's demitting office, the order issued by the Personnel Ministry said.
The appointment comes after interim Finance Minister Piyush Goyal had announced that leaders would soon be appointed at headless state-owned banks.
Sriram had lost the race to SBI chairman’s post to Rajnish Kumar in September last year, while he was also interviewed for the RBI’s deputy Governor’s post, which will now be occupied by Jain.
Clean-up at IDBI Bank
Sriram’s immediate task at hand would to shore up IDBI Bank’s capital base and manage its asset quality as nearly 28 percent of its loans have turned sour.
In Q4 FY18, IDBI Bank's loss had widened to Rs 5,662.76 crore from Rs 1,524 crore in December and Rs 3,199.77 crore a year ago.
Its capital adequacy ratio stood at 10.41 percent as on March end 2018 with Tier-1 ratio at 7.42 percent (almost borderline against the requirement of 7.375 percent).
Gross bad loans for the bank jumped to Rs 55,588 crore as on March end, up from Rs 44,753 crore in March 31, 2017, according to the bank's latest report.
For these reasons, the bank is already under prompt corrective action (PCA) imposed by the central bank.
The bank’s board has also approved a proposal to sell Rs 21,397 crore worth of bad loans, consisting of 30 large-corporate accounts.
The Central Bureau of Investigation (CBI) is also probing a Rs 600-crore loan fraud case involving IDBI Bank.
Sriram at SBI
Sriram has been working as the MD (Corporate and Global Banking) in SBI since July 2014. He had been Managing Director of State Bank of Bikaner and Jaipur.
He joined the country’s largest bank in 1981 as a Probationary Officer. During over three-decade-long career, he held several positions and also had a stint at SBI's Singapore office.
The Banks Board Bureau has also recommended 22 general managers to be elevated as executive directors at state-run banks.
The government will also need to decide on a replacement for Allahabad Bank MD & CEO Usha Ananthasubramanian, whose powers have been taken away by the government after she was named in the chargesheet relating to the Rs 14,000-crore fraud at Punjab National Bank (PNB) involving diamond merchants Nirav Modi and his uncle Mehul Choksi.
Ananthasubramanian was the PNB MD till she was moved to Allahabad Bank, allegedly due to non-performance.Also Read: Q4 report card: Losses in banking sector tower over 4 times its profits so far; PNB and SBI hit the most