The extension will help Ms Bhattacharya to complete the merger process of five subsidiaries as well as the Bharatiya Mahila Bank.
The government has extended the term of Arundhati Bhattacharya, chairperson, State Bank of India (SBI) by one year. Ms. Bhattacharya, was appointed on October 7, 2013, for three years.
The government has issued a notification to this effect which has been received by the SBI chairman’s office.
“I am grateful to the government for giving me some more time to take forward the initiatives that I have taken,” Ms. Bhattacharya told The Hindu.
The extension will help Ms Bhattacharya to complete the merger process of five subsidiaries as well as the Bharatiya Mahila Bank, the process for which began a few months ago.
Ms. Bhattacharya had earlier said she wants to complete the merger process in the current financial year.
The merger of State Banks of Bikaner & Jaipur (SBBJ), Travancore (SBT), Patiala (SBP), Hyderabad (SBH) and Mysore (SBM), and Bhartiya Mahila Bank, a bank for women set up in November 2013, will add Rs. 8 lakh crore or $120 billion to its assets and will create a banking behemoth with global scale. With this merger, SBI aims to be in the list of top 50 large global banks.
The board of SBI had cleared the merge plan and had finalised the share swap agreement. Apart from completing the merger process, restoring the health of the bank is another priority for the chairperson.
Gross non-performing assets of SBI has almost doubled in one year which reached a record level of Rs. 1.01 lakh crore as on June 30, 2016 as compared to Rs. 56,421 crore a year ago. In term of percentage of gross advances, it was 6.94 per cent as compared to 4.29 per cent a year ago. It net NPA was Rs. 57,421 crore (4.05%), as compared to Rs. 28,669 crore (2.24%), as on June 30, 2015.
SBI, though, has maintained a healthy provision coverage ratio of 62 per cent.
SBI’s health is seen as much better than other public sector banks. SBI had put out a watch list of loan, that is, accounts that could potentially become NPAs, of Rs. 30,000 crore which is much smaller than its peers.
In an interview to The Hindu in July, Ms. Bhattacharya had said the NPA cycle will turn from the second half of the current financial year, and the headline numbers will start coming down.