India has decided to extend Arundhati Bhattacharya’s tenure by one year as the chairperson of the country’s largest bank, a finance ministry official said, a move that will allow her to oversee completion of the merger with six smaller banks.
Bhattacharya, 60, who was to retire this month, will continue as the chief of the State Bank of India until the consolidation with five of its units and Bharatiya Mahila Bank Ltd is completed in the year ending March 31. Her term will expire in October 2017, the official told reporters in New Delhi, asking not to be named as the decision hasn’t yet been made public.
The mergers are part of the government’s push to strengthen a fragmented banking industry that has more than 90 domestic and foreign lenders competing for almost $1.5tn of deposits.
Appointed in October 2013 as the bank’s first female chief and most-senior executive officer, Bhattacharya has taken steps to curtail bad debt and improve profitability at a lender that is 60.2% owned by the government. The bank reported a smaller increase in soured debt in the June quarter than investors expected.
Bhattacharya has pushed SBI to strengthen its credit-monitoring measures, to identify loans that may default and to take steps to recover them. The bank tightened eligibility criteria to focus on lending to companies less likely to default. The chairman leads a panel that works on retrieving stressed loans greater than Rs5bn.
SBI accounted for about a fifth of India’s outstanding loans as of June 30, central bank data show. It has more than 16,700 outlets, compared with more than 6,000 operated by Wells Fargo & Co, the largest US lender by branches.
Bhattacharya said in August that the merger was a “win-win” for the lender and its units, citing expected cost savings, adding that the process will be completed by March 31. State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner & Jaipur, State Bank of Hyderabad and State Bank of Patiala are the units being merged with the parent.