B. Sriram resigned as the Managing Director (MD) of State Bank of India (SBI), the country’s largest lending bank, after being appointed as the MD and Chief Executive Officer (CEO) of IDBI Bank.
B. Sriram had been appointed to IDBI last week i.e. on 22 June 2018 for three months temporarily. He replaced Mahesh Kumar Jain, who will take over office as the Deputy Governor of Reserve Bank of India (RBI). IDBI has been suffering huge losses with its gross non-performing assets at Rs.55,600 crore at the end of March quarter. The net loss of the same quarter stood at Rs.5,663 crore.
The new interim MD and CEO is, hence, being appointed at a time when the institution is surmounted with loans. Sriram, with his 30-year long career, is the longest-serving MD of a public sector bank in India. He has held various positions during his stint in the banking industry and worked out of the SBI Singapore’s office as well. The 59-year-old MD also has experience in stressed assets management.
The appointment of Sriram gains importance due to the fact that Life Insurance Corporation of India (LIC) is looking to acquire a majority stake in IDBI Bank. If LIC successfully acquires a majority stake, IDBI will become a subsidiary to its mutual fund and housing finance business. Also, the deal will allow IDBI Bank to become a private sector bank.
The Finance Minister, Arun Jaitely, during the budget session for 2016-17 had stated that the transformation of IDBI Bank from a public sector bank to a private sector bank has already started. Jaitely reiterated the same during this year’s budget speech.
Source: Economic Times