Arundhati Bhattacharya will be remembered for taking some bold steps at SBI

The first woman to head the largest bank in the country, State Bank of India, or SBI, has seamlessly implemented a number of path-breaking changes, which have become a template for public sector banks, which control more than two-third of the country's banking industry in terms of deposits and advances. Take the merger of five associate banks, a herculean task that went off without major hiccups. The merger has taken SBI to the list of top 50 banks in the world with total assets of Rs 40 lakh crore. The second and third largest banks in the country have assets of Rs 7-8 lakh crore. While critics say the bank is biting off more than it can chew, the success or failure of the merger will be known with certainty only after some years.

However, Arundhati has laid a good foundation for the bank so that it can reap the benefit of scale. The steps include a large-scale human resources overhaul. She has introduced a culture of perform or perish, brought in a new appraisal system involving budgets and targets, and started a process to build specialised skills and leadership. These steps would go a long way in helping the bank compete with private sector counterparts. She has also led the digital transformation at the bank and embraced social media to reach out to customers. "She has articulated a digital vision. She has laid down a good foundation. We are now readying for the launch of a complete digital bank," says Deputy Managing Director Prashant Kumar.

Insiders say Bhattacharya is methodical, competitive and has excellent people skills and risk-taking ability. What has also worked for her is her vast exposure in corporate banking, retail, treasury, HR, investment banking and a foreign stint. "I must have had a dozen jobs," she had told BT in an earlier interview.

Many say there are lot of issues that are still unresolved. One is asset quality, with non-performing assets increasing after the merger of the associate banks. The success of the HR overhaul will depend upon incentives, variable pay and ESOPs, which are a must to retain and encourage talent. Also, a lot will depend on the next chairman, who will not only have to take forward many of the initiatives of Bhattacharya but also match steps with payments banks, small banks and new-generation private sector banks.