?Look at China?s banks?

The State Bank now and the State Bank a few years ago, what has caused this difference? And, when did you see this change happening?

Well, one set of change when we started losing market share in the company. And there were many reasons for this, one was that we did not have the technology. And then we started corporate clients. The requirements of corporates changed from just cash to non-cash. And we were known as the cash machine. Large corporates would bank with us because we had cash and not because we were efficient. And when the global economy opened up a the needs became diverse and new relationships were created with other banks. Also, some times retail banking started coming in and public sector banks were not geared for this. So we lost on large corporates and we also lost on the retail opportunity and we were not quick in changing our technology.

Now, as the largest bank, it was obvious that we would lose market share, it is the law of the business to operate that way. When you have competition coming in where there are established players, the large player would lose market share. However, if you lose market share and if you are a dispirited organisation then that is a cause of concern. And we were losing market share not just for these structural reasons.

Now, when you saw this, what were the priorities that you laid out to address?

At the operational level of State Bank, one cannot have a list, all factors have to be handled simultaneously. If you do things one by one you will run out of time, you have to do several things at the same time. Earlier we had this practice of having a theme year ? one year for book keeping, one year for human resources. I saw that this really did not work. We had to work on all things at the same time.

Earlier SBI was seen as a government department and now it?s seen in a different light. How did this come through?

My belief in bank was that it was always a good bank. And when I joined the bank in 1972, it was definitely an economic force. Way back, there would be three important people in every district, the collector, the superintendent of police and the state bank branch manager. Over a period of time we lost the eminence as other players came in. I had this faith that the leadership was in place. But most managers tend to address the technical issue ? products and balance sheet. If you only address issues that are technical you can only go so far and no further. What matters most is employee enthusiasm and involvement. While it is important to manage well, it is also important to do more than that. We got the top management together and got them aligned. When I was a team member earlier I had several questions. Now that I am the chairman, I know that I have to address each one of these.

Today, in India, the largest merger story is in the SBI. How are you going about managing this challenge?

In my thinking, there should be some philosophy behind actions. I believe we need large banks. And as a group we need to consolidate. If you look at China, there are a lot of similarities, though China is ahead of us, there are three Chinese banks among the top ten of the global banks. The largest Chinese bank is ten times bigger than SBI. So if the economy is to grow at 8 to 9% then the banking sector has to grow at double the rate. Even today there are blocks in the country that are unbanked. And there are regulations that we cannot lend to a certain extent to large groups and this is based on the capital requirement. Now, when a company wants to raise funds for an ambitious project they will have to go through a consortium of banks. Just imagine the paper work involved. So if we have large banks, they would be able to serve a lot of these needs. And if you see the earlier merger, it was so smooth. There were no hassles. This is a very seminal happening in the banking industry. Later, people will remember that the consolidation in the banking industry started with the merger of the State Banks. And there will be a lot of lessons learnt. So in many ways we are also becoming a laboratory for the banking industry.

What are your plans for overseas acquisitions?

In this area, one does not need to be hasty. We are not dying to acquire an overseas bank for the sake of it. We have to consider how the acquisition will enhance our core requirement of funding Indian companies. So we will keep looking at opportunities that are based on these fundamentals.

You are now being seen as an ?aggressive? player in the industry, especially after the 8% rates. What is the thinking behind this?

Well, let?s not say we are ?aggressive?. I would say we are focussed. Our leaders met and saw an opportunity in the home loan and auto loan area and we decided to go ahead with this after considerable deliberations. We are lending to several areas where the rate is around 3% so this is a better rate. We have been thinking on several areas and even in the investment banking area we are number one in lending. One of the things we have done is to create an environment of communication where one can ideate.

Lastly, what is the brand OP Bhatt and how can one differentiate that?

Well, I think I am accessible. I have spent considerable time in meeting with people across the bank and across the rungs to understand their issues and problems.