Bank of Baroda’s change of guard poses a test
The public sector lender cannot afford to take its eye off ICICI Bank, which threatens to dislodge it as India’s third largest bank.
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Editor's note: On 14 January, Sanjiv Chadha was given an extension at the helm of Bank of Baroda. His three-year term as the CEO and managing director, which was to end on 19 January, will now get over on 25 June, when he attains superannuation. The same day, in a separate order, the Financial Services Institutions Bureau—the agency tasked with finding people to head public sector banks—recommended the name of the bank’s current executive director, Debadatta Chand, as Chadha’s successor. This means that Chadha will hand-hold Chand through the next six months. The extended leadership transition could be good for the bank as Chadha’s will be a hard act to follow. Chadha’s tenure at Bank of Baroda can be divided into two phases: the clean-up phase in the first two years and the growth phase in the third. When Chadha took charge, for every Rs 10 that the bank had lent out, Re 1 had turned into a default. Things have improved visibly since. At the end of September 2022, the bank’s gross non-performing asset, or NPA, ratio had almost halved to …
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