Union Budget of 2021 brought a unique proposition to form a Bad bank to better manage the problem of non-performing assets in the financial service ecosystem. This bank gets its first Senior Executive as Dr Padmakumar Madhvan Nair, once again from SBI’s talent pool.
Before this appointment, Nair headed the Stressed Asset Resolution Group [SARG] as Chief General Manager [CGM] at State Bank of India since April 2020. In the last two decades, he has worked mostly in the corporate banking segment.
His announcement came at a time when there are many speculations about large stressed portfolios in the Public Sector Banks [PSBs]. Punjab National Bank offers a document that clearly shows that stressed loans are around 20%. If the largest Public Sector Bank after SBI shows 20% overdue loans then the situation with many other smaller Public Sector Banks could equally be alarming. This shows that how much the PSBs are underperforming.
It is not the first time that the government is appointing a senior executive from SBI’s talent pool. There are many instances when the government chose SBI executives for key roles in the public sector. Last year, after the collapse of Yes Bank due to the piling up of bad loans and other reasons, Mr Prashant Kumar, the Chief Financial Officer of SBI was appointed, to head the reconstructed bank.
Before the last year’s mega-merger of Public Sector Banks, the government assigned senior executives from SBI to head the merging banks to ensure the smooth operations of banks. Shri Mrutyunjay Mahapatra appointed to Syndicate bank. In the same way, Shri J Packirisamy and Shri Karnam Sekar were assigned to Andra bank and Dena Bank respectively. Earlier also, the government had appointed Sanjiv Chadha, who was previously working in the Merchant and Investment Banking arm at SBI and Padmaja Chunduru, who was Deputy Managing Director at SBI, as a head of two larger PSBs – Bank of Baroda and Indian Bank respectively.
According to government experiences, SBI appointees have always lived up to their expectations. And this is the reason that the government always eyes first on the SBI’s talent pool whenever needed.