SBI’s new chief Dinesh Khara shares his stance on restructuring, capital raising, hiring, and more

• In his first interaction as the State Bank of India (SBI) chairman, Dinesh Khara asserted that his top priorities are the safety of the bank’s employees and customers as well as maintaining the quality of the bank’s balance sheets.
• He also shared that SBI is quite comfortably placed to handle the restructuring requests that have come in so far.
• When it comes to raising capital, Khara said the bank is yet to approach the capital market and that the decision will depend on the trading traction in coming days.

Dinesh Khara held his first press conference today as the new chairman of India’s largest banking entity, the State Bank of India (SBI). He shared his top priorities, as well as his take on restructuring and capital raising plans.

Considering the impact of the coronavirus pandemic, Khara stated that his top three concerns are the safety of employees, safety of customers and maintaining the quality of the bank’s balance sheet.

On SBI’s readiness for restructuring of loans
Maintaining the balance sheet is part and parcel of the upcoming restructuring exercise that has been approved by the Reserve Bank of India (RBI). According to Khara, not too many corporates have reached out but the traction for personal loan restructuring is high.

“We’re closely observing the behaviour of people who are showing interest in going for restructuring. Whatever numbers we have seen till now and given our quality book, it is very much manageable,” he told reporters.

However, with the new restructuring guidelines, the bank does not have a clear view of which new cases of non-performing assets will need resolution.

On SBI’s capital raising
Any money the bank needs, after the board approved capital raising of ₹20,000 crore back in June, has been done using Tier-I and Tier-II options. But when it comes to raising capital from the equity market, it’s still a watch-and-watch game with the deadline still five months away.

“The kind of credit growth we are seeing, we feel we are quite comfortably placed as of now. We would like to reach out to the capital market for any preventive capital raising as when we see traction on trading of our assets,” explained Khara.

More employees in digital and analytics
Khara stressed that SBI is doing well in terms of digital distribution channels. The bank has plans to increasingly strengthen the digital and analytical capabilities to serve its customers.

One part of that plan is to re-skill the bank’s existing employees.Since a lot of them have a background in engineering, the bank has plans to offer specialised re-skilled courses to build the employee base in analytics and digital.

”We’re not really letting down our guard as far as annual hiring is concerned,” he said, clarifying that annual hiring will continue as per past trends.

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