SBI chief, 3 MDs interview for top job

Kolkata | Mumbai: The government has asked State Bank of India chairman Rajnish Kumar to appear for an interview to fill the position that he would be vacating this October, possibly signalling one more term for him.Three managing directors of the country's largest lender - Dinesh Kumar Khara, Arijit Basu and CS Setty - are also likely to be interviewed for the top job.The interview will be conducted online by the Banks Board Bureau on August 18 or 19, two people familiar with the matter told ET.The post of the fourth MD is lying vacant at SBI after Partha Pratim Sengupta took charge at Indian Overseas Bank as the CEO.While it would appear to be unprecedented for a chairman to be part of a panel to be interviewed for the position he already holds, it may, according to people familiar with the situation, send a message that the government prefers tried and tested hands in key positions instead of risking a new leader at a time when the financial system is facing unprecedented crises.The government recently extended the term of Securities & Exchange Board of India chairman Ajay Tyagi. It has also offered an extension to Union Bank of India chief executive Rajkiran Rai, in this case without any interview.The government also risks sending out a wrong signal if the existing chairman doesn't get another term even after being called for the interview, said the people cited.While some said the move is in sync with better corporate governance standards, M Damodaran, the former Sebi chief, had declined to be interviewed in 2008, preferring instead to step down.SBI didn't reply to ET's email seeking details on the development.Kumar's predecessor Arundhati Bhattacharya received an extension for little over a year in 2016 when SBI was going through the process of merging five associate banks and Bharatiya Mahila Bank into itself. Kumar, now 62, was an MD at that time.'Markets will take extension positively'Kumar's current term comes to an end on October 7. He had taken charge at SBI on October 7, 2017, just three months ahead of his scheduled superannuation date. According to the statute, the chairman or CEO of a public sector bank can continue till the age of 65. During the second quarter of FY18, SBI's net interest margin, a key profitability parameter was at 2.43%, which has improved to 3.01% in the first quarter of the current financial year. SBI's total loan book grew to Rs 22.38 lakh crore in Q1 of FY21 from Rs 20.03 lakh in Q2 of FY18."The bank has made considerable efforts over the years to maintain consistency irrespective of leadership changes. The current high PCR (provision coverage ratio) and manageable SMA book indicate a healthy balance sheet," said Lalitabh Srivastawa, banking analyst at Sharekhan."If the current SBI chairman gets an extension, we believe the markets will take it positively since we are going through extraordinary times."

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