Pratip Chaudhuri: A soft-spoken man of integrity or a banker with mala fide intention?

Source :Sify
Author :Finance Desk
Last Updated: Thu, Nov 4th, 2021, 18:11:24hrs
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Another banker will have to battle with the judiciary to rescue himself from the allegations of "Mala fide" intentions.

Pratip Chaudhuri, the 23rd chief at the State Bank of India who remained a Chairman over a two year term until Sept 2013 returned to public limelight in an unceremonious manner. The 68 year old Chaudhuri was recently arrested in connection with a loan case.

This is not the first time that a Chief from a large PSU has faced action. Previously, Usha Ananthasubramanian (former MD & CEO of Allahabad Bank), SK Jain (Syndicate Bank), Yogesh Agarwal (IDBI Bank) have been questioned.

Chaudhuri's case however is different given the support he has received from his peers and the industry. After his arrest the Indian Banks Association wrote to authorities expressing its concern over the arrest. Bankers including Uday Kotak of Kotak Mahindra Bank have sought for more information. State Bank of India in a detailed statement has reiterated that all due processes were followed during the sale of the hotel to the ARC (Asset Reconstruction Company).

For those unaware, Chaudhuri passed the baton of Chairmanship to Arundhati Bhattacharya who is credited for having successfully helmed the process of integrating the elephantine bank with its subsidiaries.

Not just a successful successor, Chaudhuri's predecessor, OP Bhatt, too stepped down from his position on a high note. Very few at the top-post at SBI reaped a five year term. OP Bhatt was among the few to have earned it.

During his term, OP Bhatt, stood for implementing efficiency and operating a well-oiled marketing mechanism. He was instrumental in lifting the efficiency at several SBI circles. His success at the helm of the bank is highlighted in the way the bank started newer businesses -- insurance, mutual funds besides cementing its retail business presence. Bhatt at one time was instrumental in opening as many as six branches a day.

The question in the minds of most analysts and market observers was whether Chaudhuri, a soft-spoken man of the people was the right choice to replace a towering figure like Bhatt. Would a man who the national media, painted as a media-shy person match the success of his successful predecessor?

Chaudhuri's term as well as his operating style were different than his predecessor. For instance, the former MD in "limelight now" ran the bank with an inclusive approach as against his predecessor' iron-grip.

A crumbling economy and rising NPAs in the banking system meant SBI facing difficulties in meeting market-anticipated numbers. His critics argued that NPAs soared to unthinkable levels. For instance, the bank's own annual report admits the menace of NPAs. NPAs at the bank rose from Rs 39,676 crores in FY12 to Rs 51,189 crores in the next fiscal year. Net NPA percent grew from 1.82 percent in FY12 to 2.10 percent in FY13.

To tackle NPAs, the SBI board back then undertook steps such as raising the minimum income criteria for loans, implementation of a Loan originating software, taking immediate action under SARFAESI besides revamping the credit policy.

But profits and NPAs alone may not have been what the former MD targeted. Maybe he wanted to set a legacy. That, given how the bank under his helm drove transparency. For instance, Provisions which are usually reserved for bad loans were reserved for Pensions in the June quarter and the bank ending up with net profit of Rs 4298 crores. Back then, he exclaimed, "Investors understand that there are good years and not so good years, and that could be due to a variety of reasons. But this company is at least disclosing correctly what it is doing."

Chaudhuri's level of integrity is equally highlighted in this story where he asks his daughter to opt to work at a branch farther from home rather than benefit from preferential treatment for being the daughter of the top-boss. The highlighted article also describes his colleagues calling Chaudhari as a man of "impeccable integrity"... Someone who would write the bank a cheque every time his family used his office car.

Besides being a man of integrity Chaudhuri loved being a man of the people. He believed in rewarding employees for reaching their targets and made the organization stand for employee benefit. The Chennai regional office where he was the CGM seems to be an avidly reported incident. Apparently, employees at this branch were rewarded with Gold coins for having met their targets.

Chaudhuri also learnt a few Tamil phrases such as "Yeppidi Irrukel" (How are you?) besides introducing a policy on mobile phone bill reimbursements of up to Rs 1,000 for branch managers at the Chennai branch. The bank reaped success in its Gold Loan business in Tamil Nadu from its policies and marketing strategies. In fact the bank introduced a ten minute loan to help daily wage earners. Back in 2011-13, the rudimentary framework of technology and competition from NBFCs and private money lenders, achieving this was a tall ask for a bank the size of SBI.

Much like Arundhati Bhattacharya, Chaudhuri too played a crucial role in integrating with subsidiaries -- he drove the integration of the State Bank of Saurashtra and its 6,000 staff with the parent bank.

Chaudhuri's term at the helm of SBI may not have been financially best years for the bank. But he will be credited for transparency, employee benefits and better customer experience. His peers and banking stalwarts have stood up for him. In fact, Rajnish Kumar, former SBI Chairman calls calls the episode as a "misrepresentation of facts and of singling out of an individual"

With the case in court and the news industry waiting for fodder, Chaudhuri may have never expected his legacy to be questioned in this manner. 

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