Top echelons of bank industry will be meeting Friday in a Gyan Sangam or 'Confluence of Knowledge' meet in Pune to prepare a blueprint for reviving the ailing state-owned banks that are gripped with bad loans and high debt related issues. Speaking to CNBC-TV18 ahead of the meet, SBI Chairman Arundhati Bhattacharya applauds government's effort to inititiate such a conclave wherein bankers can be heard and are free to share their concerns.
The most crucial issues expected to be raised during the two-day event include asset quality concerns, financial inclusion, human resources, consolidation, risk management.
Bhattacharya also believes banks need boards with good quality for better corporate governance and this must be brought to government's notice. The banking industry needs more debt recovery tribunals and changes in bankruptcy law, she adds.
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Below is verbatim transcript of the interview:
Q: What are you expecting from this meeting in terms of the low hanging fruits, the easier ways to change in the way public sector undertakings (PSU) banks are governed?
A: At the meeting, I think for the first time somebody is asking the patient what is wrong with it. We have had a lot of people opining on what should be done and what is wrong with the public sector. The public sector banks themselves have never been asked. So I think that is the first major reaction that we had.
Feeling of delight at the fact that we ourselves get to speak for the first time and frankly because we are insiders, we actually know what is the pain and what could possibly be done. To that extent, this is a great initiative where we will ultimately be in a position to say what we need. Now if you ask me what are the areas that we are going to talk about I think the areas have been very well chosen by the ministry.
So we will be discussion stuff like HR, asset quality, risk management, capitalisation, financial inclusion and other areas like consolidation so all of these are subjects that are going to be discussed. To that extent, it is going to be pretty broad coverage.
Q: Would you ask for more debt recovery tribunals or for any changes in the law. Exactly what kind of help would you be requesting for?
A: Both of the things that you have talked about, we have already asked for them quite sometime back. Definitely, we need more debt recovery tribunals not only that we need more appellate tribunals as well.
Regarding the change of law we have also asked about that and it was the first thing that I had requested the new Finance Minister when he had taken office and he had met us, definitely change in law is required. We need a good bankruptcy law in India. So we have asked for change of law.
However, we also need to ensure its proper execution. Just recently Centre for Advanced Financial Research and Learning (CAFRAL) which is the research arm of Reserve Bank of India (RBI) they had a meeting of all the heads of debt recovery tribunals (DRTs), the presiding officers (POs) as well as people from the banks.
They have pointed out several things that could be done to make the process faster. So I think this collaborative form of working that we are seeing, this is a very welcome change. Hopefully, if all of us feel the need for change it will happen.
SBI stock price
On January 01, 2015, at 11:10 hrs State Bank of India was quoting at Rs 313.20, up Rs 1.35, or 0.43 percent. The 52-week high of the share was Rs 2977.85 and the 52-week low was Rs 287.20.
The company's trailing 12-month (TTM) EPS was at Rs 15.70 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 19.95. The latest book value of the company is Rs 158.43 per share. At current value, the price-to-book value of the company is 1.98.
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