'The SBI Story' more a copy-paste job rather than incisive analysiS

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"chance newspaper article" that talked in "glowing terms" of the SBI Museum in Kolkata prompted a visit that "amazed" Vikrant Pande about the bank's 200-year history and the archival material that prompted him to write "The SBI Story" that is more of a copy-paste job rather than an incisive analysis of its journey over the years as it glosses over major hiccups like the Nagarwala episode and the Harshad Mehra and NPA scams.

This is not surprising, given that Pande's expertise lies in the field of translations, having rendered 12 works in Marathi into English. His most recent work is the co-authored "In the Footsteps of Lord Rama Travels with the Ramayana".

Then, "The SBI Story" (Westland) comes just a month after "A Banker's Memoir" by former bank Chairman Rajnish Kumar (2017-20) that captures the many changes he witnessed in India's banking sector during his 40-year career the aftermath of demonetisation; challenges in YES Bank; the crisis in Jet Airways and NPAs in an anecdotal, engaging and thought-provoking manner.

Pande, on the other hand, relies heavily on the extensive documentation of Prof Amiya Kumar Bagchi, a distinguished political economist, and Abhik Ray, the author of the multi-volume "The Evolution of the State Bank of India".

"I was primarily helped by a lot of books written by Prof Bagchi and Abhik Ray. Apart from that I met a few senior SBI officials. I also read many books on the history of banking in India as well as some other books which talk of how other banks fared. I have done a lot of work on Indian history as part of my other translations and that helped me to put context to some of the events described in the journey of the (pre-Independence era) Presidency Banks. There was a lot of reference material in Prof Bagchi's works and I read them to get a better contextual understanding," Pande told IANS in an interview.

Even so, there is a woeful lack of any fresh insights beyond what is already in the public domain on a host of critical issues.

Just three pages of the 200-page book deal with the events of May 24, 1971 when Rustom Sohrab Nagarwala, a ex-serviceman, mimicked then Prime Minister Indira Gandhi and conned Ved Prakash Malhotra, the Chief Cashier of the SBI's Parliament Street Branch, into withdrawing Rs 60 lakh in cash for a "secret mission to Bangladesh".

This, too, is related in the words of then SBI Chairman RK Talwar, who attributed the recovery of the money the very same day to the "protection of the Divine" - the Mother of the Sri Aurobindo Ashram in Pondicherry.

"It was a unique episode and the fact that Nagarwala died in mysterious circumstances did not allow proper investigation. But Talwar insists that the Bank had very strong systems and such instances have not recurred. It is a rare event in SBI history. SBI has always had a very rigorous system of checks and balances since Imperial Bank days and they have been even better. But individuals can always scam the system however strong it may be. We saw how one clerk was responsible in the Harshad Mehta scam," Pande said during the interview.

What were the lessons learnt from the Harshad Mehta episode, in which the RBI had found a shortfall of Rs 649 crore in the SBI's investment portfolio? The bank did not have the securities for which it had paid the stock broker. (Under pressure from the SBI, Mehta later returned o Rs 620 crore). What were the corrective measures put in place?

"Harshad Mehta was a case of an individual getting tempted. It was also about regulations not being strong. SBI was lucky to come out unscathed (sic). Since then, SBI has ensured that such instances have not recurred. SBI's audit mechanism has been v(ery) strong and has not allowed such lapses," Pande said.

What is the exposure of the SBI in the NPA fiasco? Isn't it worrisome that a number of PSU banks are involved? Overall, what steps need to be taken to recover the outstanding money and prevent such a situation from arising again?

Pande's response was quite startling, saying he had "not really documented this part".

"The fact that SBI is India's largest lender puts it in a position that any very large transaction is likely to have SBI as one of the co-lenders. Despite that, I believe SBI remains extremely strong. SBI's main strength has been its officers. The Probationary officer system of SBI since Imperial Bank days has created India's best pool of managers. The other two banks which contribute to the Indian banking managerial pool are ICICI Bank and Citibank. But SBI is by far the largest. Its officers are surely a notch above other banks in terms of quality," Pande said in a perfect example of waffling.

(According to the AIBEA, among the 17 public sector lenders, SBI has highest number of wilful defaulters at 685 who have together defaulted on Rs 43,887 crore.)

How did the SBI survive the 2008 global meltdown?

"I did study the 2008 meltdown but found that the Indian economy was largely insulated and banks like SBI, though very large, are not truly international and did not have much impact from the global financial crisis. SBI is largely an Indian bank and India did not suffer in 2008," Pande said.

For the record the SBI, in its annual report for 2019-20 said it sanctioned foreign currency loans of $9.2 billion to Indian related corporates and $ 11.35 billion in loans to overseas entities.

SBI has increased its foreign offices to 233 as on March, 2020 from 208 a year ago. It opened 32 new offices and closed seven. It now has 58 overseas branches and sub-offices, 163 offices of subsidiaries, seven representative offices, and five joint ventures/associates.

In conclusion, Pande circumvented a question on how he saw the roadmap ahead.

"Banks like SBI will continue to remain very relevant for a very large part of India. They are also at the top of their game with apps like YONO. As Chairman Dinesh Khara said, the elephant is ready to dance. I think SBI is surely very well placed to continue its leadership position. Banking despite being privatised has not seen too many top players except ICICI, Kotak, Axis and HDFC. But the roadmap is for the board and SBI management to decide. I don't have many comments on it," Pande maintained.

(Vishnu Makhijani can be reached at vishnu.makhijani@ians.in)

✔️ 'The SBI Story' more a copy-paste job rather than incisive analysiS

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