Dinesh Kumar Khara era ends in SBI, it's over to Challa Srinivasalu Setty

Dinesh Kumar Khara bid farewell as the Chairman of the State Bank of India (SBI) on Tuesday after leading the institution through four transformative years.

Often dubbed as the "profit king," under Khara's leadership, SBI’s bottom line surged to Rs 1.63 lakh crore over four financial years, surpassing the cumulative profit of Rs 1.45 lakh crore accumulated in the previous 64 years.

During Khara’s tenure, SBI’s net NPA ratio fell dramatically from 1.59% in Q1 FY21 to 0.57% in Q1 FY25, underscoring the bank’s improved asset quality.

Deposits grew by over 41% to Rs 49,01,726 crore, while the loan book expanded by 60% to Rs 38,12,087 crore.

Khara’s focus on productivity was evident as he highlighted in a recent interview with ET Now, “Profit per employee grew by nearly six times to Rs 30 lakh.”

Despite the bank’s remarkable performance, including a 325% rally in SBI’s share price, Khara remained unsatisfied: “I am not happy. How can I be happy? We are not getting our right value; look at the other players in the market.”

A Delhi School of Economics alumnus, Khara had recently shared his vision for the bank: “My ambition was to see that the bank generates a profit after tax of Rs 1 trillion. To my mind, we are on track, and hopefully, we should get to see that number soon.”

Khara took charge of SBI on October 7, 2020, following in the footsteps of his predecessor, Rajnish Kumar, who had begun the arduous task of cleaning up the bank’s balance sheet. Khara’s challenge was compounded by the onset of the COVID-19 pandemic.

An example of his ingenuity was SBI’s approach to dollar-rupee swaps during a period of low credit demand, ensuring that the bank’s financial performance remained robust.

Khara spearheaded the digital revolution within SBI, leading to the exponential growth of the YONO app, which now boasts almost 80 million users. “Ninety percent of the bank’s transactions occur through digital channels,” Khara noted, underscoring the significant shift towards technology-driven banking.

His emphasis on data analytics also resulted in a surge in digitally disbursed loans, which have been growing at 30% annually.

As Khara passes the baton, attention now turns to Challa Srinivasalu Setty, who takes over as Chairman. Known for his meticulous attention to detail and a goal-oriented approach, Setty is reportedly deeply committed to the MSME sector.

“MSMEs fall short on technology, market linkages, and governance. If we can work with them to improve on these three aspects, the ecosystem can become a lot more robust,” Setty told a few news portals, outlining his strategic focus. His approach reflects a hands-on leadership style, with colleagues often describing him as a banker with “feet on the street.”

Setty’s career at SBI, which began in 1988 as a probationary officer, has been marked by significant contributions, particularly during his tenure as Deputy Managing Director of the Stressed Assets Resolution Group.

Under his leadership, SBI’s gross NPA fell from Rs 2,23,427 crore to Rs 1,49,092 crore between FY18 and FY20, with the slippage ratio decreasing from 4.85% to 2.4%. Reflecting on this period, Setty noted, “The key principle was aligning provisions to recoveries and not going by only the IRAC norms.” His approach has helped to shift the narrative from merely tackling bad loans to ensuring sustained, profitable growth for the bank.