How the State Bank of India is learning from crisis

How should a leader approach a challenge as unprecedented, volatile, and globally disruptive as the COVID-19 pandemic? As a learning experience. That’s the attitude of Rajnish Kumar, chairman of the State Bank of India (SBI). The veteran banker, who joined SBI in an entry-level role four decades ago, is now tasked with leading India’s largest financial institution through an uncertainty that no organization had anticipated.

Nonetheless, some of the digital initiatives SBI had undertaken before the crisis are helping to meet the moment. In 2017, for example, SBI launched YONO (“you only need one”), a mobile app that offers services for banking, investments, and trading, as well as a platform for online shopping. And, with 24 million accounts, it’s also the world’s largest digital bank. The institution began to rethink the operational side as well, reconsidering what a bank should be in the digital age. That includes service virtualization and remote work—plus a lot of deep reflection on India’s needs in the decades to come.

Rajnish Kumar biography
Taking the long view, as well as embracing and reappraising digital and what it can and should be, is a challenging leap for any legacy organization, and SBI faces an especially rich stew of challenges. With more than 22,000 branches, some 448 million customers, and a market share within India of about 23 percent, the partly state-owned, partly publicly traded bank has the dual mandate of serving all Indians—including those who have grown up with the notion of a bank as a brick-and-mortar institution—as well as its shareholders.

Recently, on a videoconference with McKinsey’s Akash Lal and Joydeep Sengupta, Kumar took time to discuss his “CEO moment,” including how he is dealing with the crisis and reimagining SBI for the future. In addition to helping maintain the stability of India’s banking system and strengthening the bank’s own digital capabilities, Kumar is dealing with issues of personal leadership that will resonate with many global leaders, including how to avoid “los[ing] your cool in such circumstances” and living the idea that “whatever we learn through this process, it must not go to waste.”

The Quarterly: How are you doing in all of . . . this?

Rajnish Kumar: You know, we had tested for disruptions in a simulated environment. But this—this is testing in a real environment. No business or organization had anticipated that it would have to deal with the situation brought about by COVID-19. And, of course, it’s not confined to one country; it’s in all countries and economies. No question, we are in an unprecedented situation. I have spent almost 40 years now in the banking system. We are used to having disruptions, and there have always been localized disruptions. But nothing of this scale or effect.

Fortunately, we had been investing in our technology and digital capabilities and had been looking to build on that. So we have been able to keep our operations up and running, and there’s been no disruption of service as far as transactions go.

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