Sreenivasulu Setty appointed as the 27th chairman of the SBI

CS Setty's Appointment and Background

• Challa Sreenivasulu Setty became the 27th chairman of State Bank of India (SBI) on August 28, 2024.
• He succeeded Dinesh Khara, who retired after completing his tenure.
• Setty's appointment was recommended by the Financial Services Institutions Bureau (FSIB) in June 2024.
• He started his career as a probationary officer at SBI in 1988 and rose through the ranks over 35 years.
• Setty holds a bachelor's degree in agriculture and is a certified associate of the Indian Institute of Banking and Finance.
• He has experience in various verticals, including corporate banking, stressed assets, retail banking, and international operations.
• Prior to becoming chairman, Setty was the managing director overseeing international banking, global markets, and technology.

Appointment Process and Tenure of SBI Chairman

• The SBI chairman is appointed by the Government of India in consultation with the Reserve Bank of India (RBI).
• The Financial Services Institutions Bureau (FSIB) conducts interviews and recommends candidates to the government.
• The Appointment Committee of the Cabinet makes the final decision.
• The maximum tenure for an SBI chairman is five years, with a retirement age of 63.
• CS Setty has been appointed for a three-year term starting August 28, 2024.

SBI's Current Position and Challenges

• SBI is currently experiencing some of its best performance in decades.
• The bank's asset quality is at a decadal best, with gross non-performing assets (GNPA) at 2.21% and net NPA at 0.57%.
• Under previous chairman Dinesh Khara, SBI earned Rs 1.63 trillion in cumulative net profit.
• In FY24, SBI logged a record annual profit of Rs 61,077 crore.

Challenges for Setty include:

• • Maintaining the bank's strong asset quality
  • Improving deposit growth, especially in low-cost CASA accounts
  • Revamping the YONO digital banking application
  • Addressing rising delinquencies in consumer loans
  • Navigating regulatory challenges, including new provisioning norms and LCR framework

SBI's History and Structure

• SBI's origins trace back to the Bank of Calcutta, established in 1806.
• The Imperial Bank of India was formed in 1921 by merging the Banks of Bengal, Bombay, and Madras.
• The State Bank of India Act 1955 nationalized the Imperial Bank of India, creating SBI.
• SBI is often referred to as the "elephant" of Indian banking due to its size.
• The bank controls over 23% of system-wide assets and liabilities.
• As of June 2024, SBI's total assets exceeded Rs 81 trillion.
• The Government of India currently holds a 57.6% stake in SBI.