The Centre, on Tuesday, appointed State Bank of India’s senior-most managing director Dinesh Kumar Khara as the chairman of the country’s largest lender.
He replaced Rajnish Kumar, whose three-year term ended on Tuesday. His elevation was recommended by the Banks Board Bureau (BBB) on 28 August after consideration from among the pool of serving managing directors at the bank, comprising Arijit Basu, CS Shetty and Ashwani Bhatia. Khara was among the contenders for the chairman’s post in 2017 as well.
Khara was appointed as managing director of SBI in August 2016 for a three-year term, but got a two-year extension in 2019 after review of his performance.
An alumnus of the Faculty of Management Studies, Delhi University and a post graduate in Commerce, Khara led the Global Banking division of SBI. He holds a board-level position and supervises the businesses of SBI’s non-banking subsidiaries. Prior to being appointed managing director, he was the MD and CEO of SBI Funds Management Pvt Limited (SBIMF).
Khara is known as a general banking specialist within SBI circles. During his stint in the overseas expansion wing, Khara was posted at the bank’s Chicago office and was associated with the overseas acquisition of Indian Ocean International Bank Mauritius, according to a report.
Khara, who joined SBI in 1984 as a probationary officer, was instrumental in merging five associate banks and Bharatiya Mahila Bank with SBI effective April 2017. He has over 35 years of experience in various verticals of commercial banking, such as retail credit, SME/corporate credit, deposit mobilisation, international banking operations and branch management. He is also a Certified Associate of Indian Institute of Bankers (CAIIB).
Khara’s assumes the top post in the midst of the coronavirus pandemic, which has spelt disaster for the banking sector. As on 30 June, SBI had made total provisions of Rs 3,000 crore to cover potential COVID-19 losses. The gross non-performing asset (NPA) ratio of 5.44 percent was lower than 6.15 percent in the March quarter.
Additionally, global rating agency Moody’s downgraded SBI’s standalone profile to ba2 to from ba1 reflecting Moody’s view that the bank’s asset quality and profitability will deteriorate. The resultant weakening in internal capital generation will reverse improvements in the bank’s financial metrics achieved over the past two years,” Moody’s said. This makes regulating the quality of assets an uphill challenge for Khara, especially since the moratorium on loan repayments ended on 31 August and SBI is now tackling the loan restructuring proposal.
With inputs from PTI