New Delhi: Rajnish Kumar was named the new chairman of the country's largest public sector lender State Bank of India (SBI) on Wednesday, replacing Arundhati Bhattacharya who completes her four-year term on Friday.
Kumar, aged 59 years, is at present one of the four managing directors of the SBI.
The Appointments Committee of the Cabinet approved his appointment as the SBI chairman for a period of three years from the date of taking over the charge on or after October 7, an order issued by the Department of Personnel and Training (DoPT) said.
Kumar, as the new head of the bank will have to tackle the issue of ongoing resolution of bad loans while supporting growth through increased lending. Huge non-performing assets (NPA) of public sector lenders is a major cause of worry for the government.
Kumar joined the SBI board on May 26, 2015. Prior to this appointment, he was Managing Director Compliance and Risk, and Managing Director and Chief Executive Officer of SBI Capital Markets Limited, the merchant banking arm of the bank, according to his biodata.
He had earlier served as Chief General Manager, Project Finance and Leasing Strategic Business Unit, it said.
Kumar has held several key assignments across various business verticals, including two overseas assignments in Canada and the UK.
Bhattacharya became the first woman chairperson of SBI in 2013 for three years. She was given a year's extension in October last year to ensure continuity as the SBI was then in the process of absorbing five associate banks.
State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Bharatiya Mahila Bank merged with SBI on April 1, 2017.
Kumar faces the daunting task of addressing the issue of massive NPAs of the bank.
Gross NPAs of the public sector banks rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago, according to a Finance Ministry data.
As many as 1,762 wilful defaulters owed Rs 25,104 crore to State Bank of India as on March 31, 2017, it said.
A wilful default occurs when a borrower does not honour an obligation despite having the capacity to pay or siphons off funds by disposing of assets without the knowledge of the bank.
SBI and its erstwhile associates alone wrote off Rs 27,574 crore NPAs in 2016-17, according to a data by the Reserve Bank of India.