SHARD CHANDAK, who heads the State Bank of India’s (SBI) operations in Britain as regional head and CEO of its wholly owned UK subsidiary, could easily work during lockdown from his home in the St John’s Wood area of north London, but normally makes it a point to come into the bank’s headquarters in King Street in the City.
“My team is working, so it is my moral responsibility to support them,” he tells Eastern Eye in an exclusive interview.
In these economically difficult times when his clients in “hotels, student accommodation or in buy to let” properties want either repayment holidays or loans to tide them over, it is quite remarkable that he hasn’t so far said “no” to anyone.
“We are taking a long-term view – and we are optimistic,” Chandak says.
Of course, he does due diligence, but otherwise adopts a relaxed approach, especially towards his Indian clients: “Definitely, they are good sensible people with very good business models. They were doing fantastically well up to February, and I don’t find any reason why they will not be paying in subsequent years also.
“The repayment may get elongated, so sure, instead of three months they may take six or nine months to come back to their original activity level. But they will come back. I am taking a long-term view.”
Before getting into the nitty gritty of how he is helping his clients – and they are not all Indian, by the way – it is worth sketching out how the SBI, some 300 years old, is integrated into the history of the Indian nation.
It began life as the Bank of Calcutta, went through many mergers, arrived in the UK as the Imperial Bank in 1921 and has been the State Bank of India since nationalisation in 1955. It is India’s biggest bank. “We have 25,000 branches – we have market share of around 25 per cent.”
SBI has deep penetration of India’s villages, where Chandak himself, now 55, worked for six years, having joined the bank in 1988. He worked in Raipur, Nagpur, Bhopal, attended a six-month training programme for high flyers in Pune, been regional manager responsible for 40 branches, and most recently the bank’s “steel specialist” based in Mumbai before arriving in London.
“I landed here on November 1, 2018, and then, after a handover period of three months, took charge on February 1, 2019.”
The bank has two “verticals”: wholesale, with a balance sheet of £18 billion, which remains under the ultimate control of the parent bank in India; and retail, with a balance sheet of £2bn, which has been essentially a British bank as a UK subsidiary – SBI UK Ltd – since April 1, 2018.
Apart from the head office in King Street and another office in nearby Bishopsgate in the City, retail has seven branches in London – City of London, East Ham, Golders Green, Harrow, Hounslow, Ilford and Southall – and five others in Birmingham, Coventry, Leicester, Manchester and Wolverhampton.
The retail branches are being kept open, though for only four hours a day, with 50 per cent of staff coming in. Employees in the back office, in Harrow for example, are allowed to work from home. The bank has not had to furlough any of its 330 staff.
SBI UK, which offers ISAs, flexi, business and normal saving accounts, has an internet-based banking platform and launched the mobile app YONO SBIUK in September 2019. Chandak says that like all high street banks, “we are tech savvy, but we also have the human touch”.
He says his deposit rate is higher than that offered by others. “As far as loans are concerned, buy to let is a popular product in the UK and our processing time and services are better. We can compete with any player in the market in that product.”
As for his client base, “in the deposit side it is 100,000,” he replies. “And for loans, it will be around 1,200.”
Chandak sets out the gravity of the coronavirus crisis for his clients. “With businesses, their entire revenue stream has dried up.”
He explains that accommodation is built for students to rent when they arrive from all over the world, including some 20,000 a year from India alone. He hopes the student population will edge towards normalcy by the “fourth quarter” of 2020.
“The hotel industry has almost collapsed because of the lockdown. Under these circumstances, what kind of help can banks provide?”
His answer: “We can give repayment holidays, sanction certain overdrafts, give some working capital loans and also some asset-backed loans. We have approached each and every customer to see if they want to avail of any of these facilities.”
With buy to let, customers get a moratorium of at least three months. He cites real cases: “One customer in hotels wanted a six-month repayment holiday – that we sanctioned. Another customer wanted almost nine months: we also sanctioned that.
“One client in the office space found his tenants had vacated and he was not getting any rent. So we have given him a repayment holiday. They wanted some additional facilities to take care of fixed assets. We have sanctioned that additional loan.”
The loan ceiling for the bank’s UK subsidiary is £20 million, which some clients have taken up.
Meanwhile, SBI UK is applying to join the British Business Bank, a state-owned economic development bank which currently provides financial support to SMEs through the government-backed “Coronavirus Business Interruption Loan Scheme” (CBILS). The bank wants to join the ranks of the 52 others registered with the British Business Bank.
But SBI UK can help borrowers even if they are not one of its clients, Chandak explains. “People thought we sanction loans only to our own customers but that is not the correct spirit. Lenders have changed their stand and now any borrower can go to any bank.”
Chandak predicts that UK-India trade, some of which is funnelled through the bank, will continue to “prosper”.
And finally, on easing the lockdown, he recognises “there is always a debate whether to save lives or livelihoods. The UK government has taken a very balanced approach. I am fully supportive of that because a calibrated approach is very much required.”