The Next Step

In March 2005, the Government of India appointed me as the CEO of BoB, which was a sort of homecoming for me, and on a personal level, I was excited about this chance to lead the Bank in which I had begun my career as a junior officer, 34 years back in 1971. Yet, I was well aware of the enormity of the challenge that I was taking up.

During the period 2000–05, the performance of the Bank registered a sharp decline on several major business parameters, with the result its overall ranking among the nationalised banks slipped from the top position to the fourth position. There was a steep fall in the market share in both deposits and credits and significantly, in the most attractive business segments of current accounts and retail assets. For instance, in the crucial area of credit, as against the 20–25 per cent growth registered by peer banks, the same in the case of BOB was below 1 per cent. Resultantly, the Bank lost considerably on its market share in the business, with the performance below average in other key areas also, such as growth in total income and fee-based income. A similar trend was witnessed in the Bank’s performance in one of its traditional strongholds, Gujarat.... The loss in market share in Gujarat was substantial, from 22.3 per cent to 20.1 per cent.

At the level of specialised corporate credit branches and other large branches headed by assistant general managers/chief managers too, the performance was far below potential. Despite their significance in the Bank’s operation and contribution to the balance sheet, their overall performance registered a declining trend.

My own assessment of the general sentiment prevalent among the Bank staff was one of supreme complacency. They seemed to be ensconced in their own cocoons, oblivious to the realities around them. There was an imperative need to rigorously shake them out of their slumber if the Bank was not to become a dinosaur!

...The lack of new technology tarnished the image of the Bank, which had hitherto been lauded for its progressive ways. The technology project team was both demotivated and directionless. Staff morale in general was low and managers complained about the high customer attrition rate, a result of the lack of alternate delivery channels such as core banking and ATMs. Customers showed their resentment, especially because other banks were ready with the new technology that made banking easier and more efficient. Customers complained, but were not listened to, and it was costing the Bank dearly in terms of its competitive positioning in the industry.

Financial analysts wrote the Bank’s obituary, pointing to its sluggish pace of credit growth, low retail growth, low technology, and heavy reliance on treasury profits, and commented adversely on its performance. Phrases such as ‘particularly weak on the core business front’, ‘a high-risk bank’, and ‘a bad apple in the public sector basket’ were being thrown about freely and ‘sell’ was the unanimous recommendation for BoB’s shares. We were deeply concerned about banking analysts labelling the Bank as an underperformer. In my first meeting of the Board of Directors, the board members unanimously promised their full support for fast-track decisions and gave me carte blanche for moving the Bank ahead. The government nominee on the board was especially reflective. He told me: We have wasted enough time. Our credit growth has not picked up and technology implementation is lagging behind. Please accelerate the pace of changes. The entire board and the government will support your initiatives. This was a huge push for our subsequent journey of transformation. We realised that we had a formidable task at hand and would need to fire on all cylinders from day one. It was imperative to act expeditiously to stem the loss in market position and reclaim leadership status.

The New Economic Scenario 
The country had moved to a high growth trajectory, registering a gross domestic product (GDP) growth of over 8 per cent. The overall economic resurgence, rising exports, and the Indian growth story attracted worldwide attention and the country had become one of the most favoured investment destinations. The significant demographic dividend, coupled with increasing incomes, substantially contributed to the rising domestic demand. All of these provided attractive opportunities to the banking sector. The private sector and foreign banks established themselves firmly and Indian banking became highly competitive. The credit growth was robust, technology was increasingly leveraged to provide 24×7 banking, and several measures aimed at providing improved customer service were introduced. There was a new air of confidence and resurgence in the economy.

As we set out to hone our business vision and set our priorities, it was clear that some of our peer banks in the public sector had become aggressive in acquiring customers and driving business growth. In short, the rules of the game were being rewritten. The BoB had to catch up fast to bounce back to its pre-eminent position of bank of first choice for customers. From day one, it was clear that we had to act fast. There was no time to be lost, every day mattered. We had to create a new growth momentum by energising people and creating an environment conducive for the implementation of revolutionary technology and customer-centric innovations. As we needed to work on several fronts simultaneously, it was my belief that we had several things to do, the first and foremost being: fast-track technology implementation; uplift credit growth; and restore the lost momentum for customer service. In a large organisation of our size, a set of top managers could never achieve all this unless our front line was on board and understood the context of our anxiety and deployed themselves with passion to achieve the desired goal.

I had the complete faith in the wisdom of employees whose career and future was tied to the growth of the Bank. We wanted to abandon the past policy of enlisting the support of union leaders for carrying out an essentially management function. I was very clear in my mind that employees would be the centre of our priority in terms of building their morale through transparent justice mechanism, listening to them, using field wisdom, building new capabilities, and affording them career progression. This was an uncompromising belief that guided us in our transformational endeavours.