SBI chairman Setty seeks better results from subsidiaries

State Bank of India (SBI) has asked its subsidiaries to step up as part of chairman C.S. Setty's stern message that underperformance will not be tolerated, according to a person aware of the matter.

- Shayan Ghosh

Setty, who took over from Dinesh Khara as chairman of India's largest lender a year ago, has informed the subsidiaries that since salaries, especially of the top brass, are benchmarked to industry standards, they must perform to justify that.

"There is a message from the top that performance is key and the benchmarks are the peers in the private sector and the broader industry that each of the subsidiaries belongs to," the person cited earlier said on the condition of anonymity.

SBI has 18 subsidiaries in India, two of which—the life insurance company and its credit card business—are listed. Of the seven frontline subsidiaries, the review will start with two seen as underperforming.

The person quoted earlier said the state-owned bank wants to start this exercise at SBI Card and SBI Caps, and then move on to insurance and other subsidiaries. SBI Card does not have a publicly traded comparable peer, and SBI Caps is unlisted.

The recent exits at SBI Capital Markets were a result of this approach, the person said. Mint reported in April that SBI's investment banking and project advisory arm was undergoing a restructuring exercise, leading to exits of at least three senior executives.