Despite the regulator going public with its concerns on the so-called teaser rate home loans, SBI is likely to continue with the scheme, where rates are fixed during the initial few years before turning flexible. "Every quarter we look at the data. It is data-based. If it's good, then I would extend it," said Bhatt, the longest serving chairman in recent years. "The NPAs on my loans are the lowest and I also have the collateral of the customer's house."
With nearly 80% of his home loans being under Rs 10 lakh, Bhatt said the real beneficiary was the aam aadmi. "About 2.92 lakh people have got loans. Where is the tease in the product? There is no risk and there is no opacity. There is no dilution of loan appraisal norms or documentation. Every Indian is eligible," he said.
Though it was rivals such as HDFC which first raised concerns over these schemes, RBI recently asked banks continuing with the scheme to set aside more funds to deal with possible defaults in the future. Following this, SBI tweaked its offer and told RBI that it was no longer offering teaser rate schemes that required provisioning. Now, other players such as LIC Housing Finance are also using SBI's stance to argue their case.
The difference in position over the fixed-cum-floating rate offer, which has been on for nearly two years now, is not the only issue on which the regulator and the public sector player have differed. RBI first raised concerns over SBI's plans to float a private equity fund, which eventually put on the backburner.
Then came the tiff over provision coverage ratio that required banks to set aside funds to cover 70% of their gross bad debt. In this case, SBI managed to get certain flexibilities and an extended deadline though its profits may be hit. The latest set of differences arose over structuring of loans given to corporate houses and Bhatt said his position on the issue had been supported by the government too.
He, however, said there was no question of his relations with RBI being strained. "There are a few issues on which we differed with the regulator. But that's in the nature of things. If you are the largest financial conglomerate in the country, often the regulator may do things that are not appropriate for us, or for the system. We give feedback on a regular basis and sometimes it gets into public domain. There are no interpersonal issues," he said.
Is it the size, accounting for three-quarters of the banking business in the country, that allows him to defy the regulator?
"That's a strong term. Tell me, had I been wrong, would the finance ministry or the regulator have not said anything. What power do I have? Who knows a simple pahadi like me? I can always be removed anytime," said Bhatt.
Asked about his plans post-retirement, he said there were a few offers but he would only decide around April-May.
But he seems to be retiring with a sense of satisfaction with what he has done. After all, he has brought much-needed aggression. "Focus, not aggression. Hopefully it should continue," he said and listed creating a leadership pipeline, steps to improve technology and productivity in retail banking as areas that were work in progress.
Besides, he admitted that the expectation was very low when he took charge in June 2005. "The bank was not in the best of health. No one knew me. People said 'yeh Garhwali kahan se aa gaya' (where has this Garwhali come form)'." Since then, things have clearly changed for the country's largest bank though Bhatt said the size was a constraint.