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The performance of the new State Bank of India Management is under the scanner, given the steep rise in the provisioning levels and the manner in which the country's largest lender handled the Moody's ratings downgrade.
Top government officials are blaming the new management comprising chairman Pratip Chaudhuri and his three managing directors for a change in policies, particularly on provisioning, that resulted in a sharp decline in profits and the capital adequacy ratio and eventually resulted inSBI's rating being downgraded by a notch to D+. SBI's profits fell 99% to Rs 21 crore in the fourth quarter of the last financial year. During the first quarter of this fiscal, things appeared a little better with the bank reporting a 46% decline in profit at Rs 2,914 crore.
"A change in the top two or three officials does not mean that the policies will change completely," said a senior government official, requesting anonymity. "Someone can't be doing things that show him in good light," added another senior official. The other criticism is the way the SBI management handled the ratings downgrade by Moody's. "There were no protests from them. It looked as if the episode was used to make a stronger case of capital infusion," said the first official. (Times of India)
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