Results can wait: SBI chief wants to be with Sonia

R Jagannathan

What is the main job of the State Bank of India’s Chairman? To ensure that his bank gives all its stakeholders the biggest bang for the buck, or to be seen with his political bosses?

Pratip Chaudhuri, SBI Chairman, apparently thinks the latter isn’t unimportant.

In the past, he has been willing to bat for Finance Minister P Chidambaram, when he took on the Reserve Bank of India (RBI) and demanded the abolition of cash reserve ratio (CRR) - money that banks have to hand over to RBI on which they earn no interest.

Chaudhuri did this soon after the finance ministry started demanding that the RBI should pay interest on CRR deposits so that banks would have more money to lend. It did not matter to him that CRR is part of prudential regulation - a sort of restraint on endless creation of money out of deposits.

But one could say that Chaudhuri did not do anything other bank bosses would not do: be seen on the same side as the superboss.

But the latest on Chaudhuri, according to a report in The Indian Express , is that he will be busy playing host to the country’s most powerful politician: Sonia Gandhi.

Sure, bank chairmen do make it a point to turn up for ribbon cutting ceremonies by politicians at branch openings, etc. But Chaudhuri apparently went one further. The Express report says that the bank actually cancelled a board meeting scheduled for 15 May - about which the stock exchanges had already been notified - because Chaudhuri had to show up in Rae Bareli for Sonia’s inauguration of 12 branches of the bank.

Now, of course, the stock exchanges have been told that the board meeting is off, and will happen only on 23 May. But then, this wasn’t just an ordinary meeting of the board, but one to consider and announce the bank’s annual results.

The unspoken message Chaudhuri seems to be sending is: shareholders can wait when political bosses have to entertained.

Chaudhuri’s term as SBI chief ends in September 2013. Politically, there is clearly no harm in being seen with Sonia Gandhi before then.