SBT Foundation Day Speech

 

SBT Foundation Day

(I was asked to give the key note address on SBT Foundation Day celebrated on 12th September 2021 in a virtual meeting organised by ARBOA: Unit SBT Thiruvananthapuram. Ideas shared in the meeting in an informal/formal context is reproduced. Readers are requested to condone english grammar becoming a causality in some places, as I presented it in an informal arrangement) 

Good evening. Today marks the beginning of the 77^th year of foundations celebrations of our esteemed organisation. Thank you Shri Vijayakumar for the introduction. Colleagues, Friends and Comrades, when Com. Senan called and told me that I should give a ‘Keynote Address’ on SBT Foundation Day, I was reluctant because, when I joined the bank in July 1980, the Organisation was already 35 years young and even in its new name SBT, it completed its teenage. When so many seniors, who knew the history and were more involved with its affairs are available, why me? But my love for SBT overtook my reasoning, though with a weaker argument that I also served the bank for 37 years. I also had the rare privilege of retiring on the last day of its existence (31^st March 2017). So I accepted the invitation. I am confident that the shortcomings in my speech will be pardoned by the listeners, as I am a fellow SBTian after all.

To my fortune, I had a copy of the book titled “Tradition of Trust – The Saga of State Bank of Travancore” authored by three of our most prominent, respectful and revered elders - Shri JPN Thampi, Shri KT Rajagopalan and Shri T.Balakrishnan. I intend to cover three topics.

1.     The defining moments and mile stones in the journey of SBT

2.     The culture and spirit, imbibed from the State and imparted to the State, that described the great institution SBT

3.     Whether SBT should have ceased to exist as ordained and what should be done by us, the ex-SBTians, retired and serving to keep the name of SBT in the pleasant memory of every one?

Defining moments and mile stones in the journey of SBT

The book by the ‘trimurtis’ enumerates innumerable instances in the long history of the Bank (72 years) that should be cherished by the members and readers. It also touched upon the role played by the great unions SBTEU and ABOA: Unit SBT in shaping up the working conditions, welfare and career of employees and officers. The book also narrates the patronage extended by the Bank in the fields of sports, arts and entertainment and persons of great eminence in these fields, who honoured our institution by being employees with us at different points of its journey. For want of time, I am selective in choosing the defining moments, which of course, exhibited the inherent resilience of the Bank.

ü  12.09.1945 - Travancore Bank Ltd (TBL) was registered in Trivandrum by the founder His Highness Sree Chitira Thirunal Balarama Verma, Maharaja of Travancore. In the beginning itself, the bank had an authorised capital of Rs.2 cr. (considered very huge at that time) and a subscribed capital of Rs.1 cr. with Rs.30 lacs, contribution coming from the government. Public private partnership, now a hot topic, was practiced, without saying so, if one look at the ownership in shares held at that time.

ü  01.01.1960 – TBL became a public sector bank. It was named State Bank of Travancore (SBT) and made a subsidiary of SBI (which was known as Imperial Bank prior to its nationalisation in 1955).

ü  31.12.1961 – SBT successfully took over nine banks, including Travancore Forward Bank, Kottayam Orient Bank, which were under moratorium due to loan defaults. The inherent strength exhibited was that the bank showed a net profit of Rs.8.35 lacs, for the year 1961, after absorbing the above banks under stress during 1960 and 1961.

ü  1971- Social Banking or Mass Banking started in a big way, consequent to nationalisation of 14 major private banks. SBT reached out to semi urban and rural areas in a big way.

ü  1992-93 - The bank faced its first major threat of existence, as the assets acquired under aggressive lending as a fall out of financial reforms announced by the government, turned into stressed assets. All staff stood as one and the bank ended the year with a gross profit of Rs.65 cr., net profit of Rs.8 cr. (with due provisions on NPAs aggregating Rs.281 cr., accounting for 12% of total advances) and a capital adequacy ratio of 4.5% (as against 4% to be achieved)

ü  10.01.1996 – BOS (Bank Own Software), acknowledged as the best user-friendly software, was launched. Among the associates, we only had the in-house branch specific software and helped the staff to migrate to CBS network seamlessly in 2005

ü  1998 – SBT successfully completed its public issue and raised Rs.69.24 cr., with an issue price of Rs.600. The issue was subscribed more than twice during the period, when the central government headed by Shri Devegowda resigned and the stock market was at its low. Shareholding of SBI was  reduced to 75% (from 95% till then) and this helped the bank to have two shareholder directors in its Board

ü  1999-2000 - ABOA: Unit SBT was on war path with the then top management. The agitation was different in the sense that the business was carried on as usual in the branches, no strike action plan was put in place but  information on performance of branches were withheld from the top management. It had the blessings of senior officers, due to genuineness of issues involved. Finally, the bank’sa board had to intervene to request the management to hold talks with the officers’ body.

ü  Presence in Gulf – The Bank opened exchange houses and own branches in Dubai and Abu Dhabi.  We were the first to open branches outside India among associates. SBT was a run away success and the main challenger was Bank of Baroda

ü  31.03.2017 – TBL which had a business of Rs.6.30 cr. in its first year of operations (1946) reported a business turnover of Rs. 35 cr. in its first year (1961) as SBT. When SBT was merged with SBI the business turnover of Rs.1.40 lac crores.(app)

II. Culture: I always felt, that all the milestones of SBT would not have been met, but for the rich culture of the home state prevalent and practiced in the Bank in abundant measure. The staff always kept in mind the interest of the Bank and the society they served. When I say the rich culture of Kerala, I want to mention about the level of social involvement and the brotherliness of the people of Kerala.For example, wherever I worked, I need not know the full address of a resident, if I have to visit them for a marriage, house forming, death, etc. Once I reach the area, I need to only say that purpose for which I came and the name of the person concerned. I will be directed properly. In no other state, I witnessed this much of social connect.

1.     Culture of Kerala and SBT always go together. Another example to cite – Everyone is given the liberty to air his views freely, when an issue is discussed on the principle “we respecti each other’s view and agree to disagree as well”. But once a decision is taken, SBTians concerned will abide by the decision and implement it to the best extent possible.

2.     Officers on deputation from other banks: Initially, they never appreciated SBTians’ habit of expressing their view points openly in a meeting, quite opposite to the proposed agenda items, as they were not used to such experience in their banks. But all of them reconciled later on and started liking SBT for this particular aspect.  

3.     Always respected the positions: Even during agitation, respect and decency was followed in letter and spirit. Seeking permission to enter BM’s cabin, sitting opposite to the BM recognising that he/she is the boss in his/her “territory” were practiced both by the top management and leaders of staff/officers unions.

4.     Professional differences never had a bearing on personal affinity. Going together for a tea after a hot debate or joining personal functions was seen commonly practiced by all. During thick of a long drawn struggle by the officers association, when top management’s attitude was the main cause of agitation, CGM was hospitalised. The top leaders paid a courtesy call immediately and wished him a speedy recovery. CGM understood that personal touch remained the hall mark of SBTians.

5.     Personal Care exhibited was without any expectation/personal favours

Examples:

a. GM (F&A) and Treasury: Not attached to any operational areas – suffered a hip fracture while on LFC. Came back and was convalescing in a hospital. Staff to took care of him by turns till he recovered fully. He talks so affectionately about SBT even today.

b. DGM (Trivandrum) – Was transferred to SBH and got relieved. But before proceeding from Trivandrum, he fell down from the terrace at home. He was hospitalised for three weeks (he was staying alone in Trivandrum) and the staff took care of him in all aspects.  He visits Trivandrum, whenever he lands up at Sabarimala, even now.

6.     Formation of Social Circles: The now famous CSR (Corporate Social Responsibility) was started by SBT in its own way, as CSB (Community Service Banking) in the 1980s. Contributions not only came from the Bank but from the staff as well.

7.     Quality Circle: The adage ‘persons operate know the problems better’ was well taken and long outstanding issues were resolved with the help of the staff from within.

III. Merger: Right or Wrong? I always felt that the bank should have been allowed to continue. 

To make SBI strong internationally: The government gave a reason that merger will help SBI to be among the top 50 international banks by business parameters. At the time of merger, the total business of SBI was Rs.32 lac  cr., and that of associates were Rs.8.5 lac cr. As on 31^st March 2021, the total business of SBI is Rs.61 lac cr., a growth of Rs.20 lac cr. (CAGR of 12% ). I may not be wrong if I say that the present level of profit/business would have been achieved even if the associate banks were allowed to function independently without implementing the merger to SBI. Whether achieving profit had taken precedence over serving the society - This is a point to be debated, as in the last four years maximum growth had taken place under retail with home loans and unsecured ‘express credit’ occupying a prominent place. Growth under Agriculture and MSME advances is moderate to say the least. No study is also attempted, so far, to evidence that the merger has benefitted the group to acquire substantial market share in the core area of operations of Associate Banks, than what was otherwise normal. Some more mergers of PSBs also happened since then. Notwithstanding the challenges posed by COVID, the market share in deposits/advances has not gone up appreciably in any of the merged entities on account of merger. It may well emerge after two or three years that the space left over by the ABs merged with SBI and the banks that were merged with major PSBs, is, in fact, taken over by SFBs and other private banks.

Question of VIABILITY/SURVIVAL: One more argument that was aired, even by our own staff, at that time was that whether SBT would have survived, on a standalone basis, given the stress in loan assets and resultant provisions thereof, threatening to wipe out the entire net worth of the Bank. In retrospect, many PSBs, which also went into PCA soon afterwards, due to mounting losses on account of NPA provisions, are now back to normal, not due to major recoveries, but on account of capital infusion by the government. This was used to increase provisions and bring down NNPA below regulatory levels. IDBI Bank was rescued by LIC and Yes Bank was rescued through an act of recapitalisation by PSBs led by SBI since then. Neither SBT was in that dire straits nor any other AB for that matter, barring SBP, at any point of their existence. And mind you, we enjoyed the long tradition of trust from our customers and we had shown our resilience in 1960 and couple of other occasions to come out of such stressful situations.

IV. What we should do now? Whether we reconcile or not, SBT is subsumed into SBI and it is a reality.  There is no way a demerger can happen now. Let us accept it and play a positive role. Some of us have a perception that ex-ABians and the customers of ABians do not get the treatment, which they were used to, when the bank was small in size and regional in character. We end up the discussion saying ‘golden days are gone and nothing can be set right”. I would like this kind of negative feelings to disappear; instead let us concentrate on how such treatments, if any, are corrected.

Promotion and Placement Opportunities for serving SBTians: There is no difference between an employee who joined SBI directly and those who joined SBI on account of merger of ABs, in matters of talent, knowledge, expertise or performance. Ultimately, history or past achievements on this score are of no value. One, who performs on a given day and in the current scenario, get the recognition sooner or later.  So continuing the self-belief and giving one’s best are the needs to excel in one’s career.

Adequacy of Pension Funds: Quite often, we receive messages in the social media on inadequate provision made towards pension funds. People get worried and immediately rush to the association. The association also do not have ready answers on hand. In our case, the issue is complex as the pension funds of all ABs are with SBI.  We are not aware, whether these funds have been merged into the pension funds of SBI or kept separately. While, I entertain no illusion that the funds are inadequate, as SBI, an institution of trust by itself takes care of every one’s interest, let the retiree’s association of ABs understand and publish how the pension funds of ABs are managed by SBI; how they propose to handle the increase in family pension etc. This will help us to build up positive counters, whenever such issues are raised in social media/other forums.

Huge Opportunity available to serve the local society especially in rural and semi urban areas: We the retirees’ can play the role of a bridge between agriculturists and MSMEs, the back bones of the society and our bank SBI. RBI brought about lot of materials on financial literacy which are for the trainers as well as trained.  The purpose is to promote financial inclusion.  We can play an active part by becoming trainers in such financial literacy programmes.  We can also become BCs and help the society.

Covid Time fall outs - Be of help to the Bank: Loans in all segments, barring agriculture, were restructured in the last 18 months. Some of the Loans, not not eligible for restructuring, have turned into stress assets. In the next two to three years, tackling stressed assets may once again become a top priority. Being resident of the area where we live now, we can play an active role in enabling the bank to successfully resolve/recover the stressed advances.

Finally Keep in touch with retired and serving SBTians and also with SBI branches and staff: This will help us make believe that we are still part of the great institution  and also to maintain a positive frame of mind always.

Best Wishes and GOD bless all of us, the organisation SBI and the society we belong.

V.Viswanathan                                                      12^th September 2021.