he was posted as the Region Head at SBI, London heading the Bank’s UK operations. He has vast experience in credit and has worked as Vice-President (Credit) in the Bank’s Toronto (Canada) Branch and in CAG, New Delhi and MCG, Mumbai etc. He also held the charge of Deputy General Manager in Pune and General Manager (NW-II) in Mumbai. He carries with him a rich combination of both knowledge and experience which should be quite useful in delivering his duties as the flag bearer of the Bank in the North East.
 
Reeta Kamble Senior Media Executive of Eastern Panorama recently had an opportunity to talk to him on variety of subjects concerning economy and banking. Excerpts:

EP- It has been quite some time that you are in the North East? What is your impressions of the region?

RK- It’s a lovely place. I am enchanted by natural beauty wherever I go. People are very nice. Only thing that often comes to my mind that infrastructure in the North East could have been much better than what it is today.

EP- What will be the new role of State Bank of India in the 21st century?

RK- State Bank of India time to time reinvents itself and in the last 7-8 years State Bank has invested very heavily in the technology. All our branches are run on a common technology-driven platform called core banking and we have 27,000 DTMs. We have a very strong internet banking platform. So, it is moving and with the time as the customer education or their aspiration increase. We are responding to the aspirations of the people.

EP-The value of rupee is decreasing and economy rating of the country is also not in good shape? In such circumstances, what will be the role of the leading bank, like State Bank of India in boosting the economy of the country? Does depreciation of rupee impact bank’s performance?

RK- As far as State Bank of India is concerned or for that matter any other bank is concerned our role is that we mobilize deposits from people and we lend the money. So, when we lend the money it definitely gives a boost to the economy. If we finance any big project or any infrastructure project, finance in big way the residential projects or constructions of the houses or sales of cars or every rupee lent to any productive sector of the economy it has a chain effect and as the consumption or the demand grows when the bank lends money. So, obviously it gives boosts to the demand. It is one of the factors, not the only factor. To that extend we are looking for good lendable projects and willing to finance them to that extend  that gives boosts to the economy  of the country and bank has a very active finance programmes for agriculture sector. It has a very active finance programme for medium and the small scale industries plus as I said housing, car loans, consumer durables. As the Bank credit grows the demand too and the economy develops. As far as depreciation of rupee is concerned there is no direct impact on bank’s performance. But the bank being part of the economy, it also gets impacted as much as the overall economy of the country in the wake of depreciation of rupee.

EP- The state Bank of India is doing very good in retail banking. You also propose to provide jobs to 10,000 new recruits this year? Will, there be any reservation for North East region say about 10%?

RK- No, like 10,000 that number has been revised and I think Bank will be recruiting about 18,000 people all over India. Reservation will be for the SC or ST candidates as per the Reservation Policy. Reservation is not based on the region but at the same time very large number of people have qualified from the North East for jobs in the bank and they have very good chances of success and getting employed in bank branches in the North East. So, about 1000 or so vacancies for the North East will be filled by the people belonging to the region because they have qualified the entrance examination and I am sure they will qualify in the interview also.

EP- State Bank of India is also handling income tax matters including refunds of tax deducted at source? To what extent are you successful in the field? If an assesse does not get the refund, can he/she write to State Bank of India?

RK- See the way it works. The Income tax refund is given by the Income Tax department and it comes to the bank only if the assesse has an account with us  and it is all now through electronic mode. So if a refund order has been issued in the sense that money has been transferred from the income tax department and has come to State Bank of India, but it has not gone to customer’s account for some reason then yes, we can have a look at it but otherwise like if the money has not been refunded or tax refund order has not been issued by the Income tax department then they will have to write to the Income Tax department.

EP- Today the government is making effort to curb “Inflation”. Is inflation, a dirty word? To what extent, rise in inflation is good to the economy?

RK- Aah, as far as inflation is concerned when the economy is growing so it is expected that there will be some inflation, but what is the tolerance level and that is where the issue comes in. Now, I think Reserve Bank of India would be comfortable if inflation does not go beyond 5 percent. But if the inflation runs at 10 percent or 12 percent then it is definitely a cause of concern to the regularity authority like Reserve Bank of India. They always have a target in mind that at what rate inflation should be expected without affecting the economy. See if the inflation goes beyond that level, then they have to take steps to curb it. But in the growing economy it is always expected that there will be some amount of inflation. Maximum expected limit of inflation is on the basis of how much is good or bad to the economy. But saying that inflation is good to the economy, I don’t think it is a right statement to make because ultimately if there is sort of a tax only common man is affected. If the prices increase and your income does not then you are a loser.

As far as depreciation of rupee is concerned there is no direct impact on bank’s performance. But the bank being part of the economy, it also gets impacted as much as the overall economy of the country in the wake of depreciation of rupee.

EP- Can you tell us something about SBI’s initiative for rural banking and its achievement, so far?

RK- Of course we are expanding our reach in rural banking through what is called financial inclusion programme. So there is a programme where bank will have its branch or a point of presences in the rural areas where population is 5,000 and more. For the current year we are making some modifications and the whole idea is that all the villages where the population is 1,000 and more, the services should be available to them. It is one part and apart from that bank has got annual credit plan for agriculture landing which is finalized and in consultation with State government. There are also several products which are available for the farmers and people in rural area. So our achievement under financial inclusion plan for the last year was 100 percent and we are hoping that by March 13 we will achieve our targets initially.

EP - Is reducing the ratio of cash that banks have to set aside a more critical issue? Is it not reducing lending capacity of the Bank?

RK - It does and the whole idea of CRR is that whenever Reserve Bank of India wants to control money supply growth CRR is increased and if they want more liquidity in the system the CRR is reduced. So it does affect the landing capacity of the Bank and it does affect the profitability of the Bank because Banks don’t get any interest on the CRR maintained by them.

EP- Low credit-deposit ratio in the region is always debated? What is your comment on it?  

RK- CD ratio is definitely low in North Eastern region but we have to look at the capacity to absorb credit. Because industrial development is low in the region and there are no large industries so the CD ratio would be low. And as the economy grows it is like a chicken and all situations where whether the more credit can lead to more investment and growth or vice-versa. We have to look at the demand factors also. There should be a demand for more credit but banks have no reservation in financing, as I said earlier, any bankable projects. We are very much willing to give more credit in North Eastern.

EP- The shortage of coins continues in the region? Do you have any advice to the reader to tackle the problem? Is plastic money a solution?

RK- Definitely plastic money or we are going beyond that. Now you can make payments or even small payments using your mobile phones, mobile to mobile. So that will be very  good solution to resolving the problem and to address the problem we have put coin vending machines at many branches and we are again we will be putting some more coin vending machines. But the solution lies in more use of credit card and as well as mobile banking payment which will be a boom for the small payment. So, it will be a fantastic idea and if people use their mobiles for making small payments then this problem definitely will be much less.

EP- Lastly, Sir what message do you have for the people of the Northeastern region especially youth?

RK- As far as State of India is concerned, we employ more than 9,000 people in the region and as I said, we will be roughly recruiting another 1100 people. So that is one part that they are taking a job in State Bank of India. Apart from that, I think my message to youth would be that the economy of the country as a whole is growing and there are lots of opportunities for them and entrepreneurs should come forward to start their own businesses and banks are always willing to help them.