Daybreak - India's only listed credit-card company is a revolving door of embattled CEOs

Episode Date: March 25, 2025

Every two years, SBI Cards, India’s only listed credit card company, valued at $9 billion, appoints a new CEO. This time, it's going to be Salila Pande, a career banker who has been with SBI for over 30 years. On the 1st of April, she will take the reigns from her predecessor, Abhijit Chakravorty.However, it is going to be a tough few years for her. And the reason is like an open secret amongst SBI Cards executives. They just don’t get along with any of their CEOs in general.Tune in to find out why.Tell us what you thought of this episode on WhatsApp at [phone]Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Every two years, India's only listed credit card company, valued at $9 billion, SBI cards, appoints a new CEO. This time around, it is going to be Sallila Pande, a career banker who's been with SBI for over 30 years now. On the 1st of April, she's going to be taking over the reins from her predecessor, Abhijit Chakravarty.

It's going to be a tough two years for her because almost all her predecessors have made life tough for her, to be honest. That was my brilliant colleague, the Ken reporter, Ronnak Kumar Gunjin. The problem, he explained to me, is like an open secret among SBI cards employees. Actually, you can't even call it a secret anymore. The thing is, they just don't get along with their CEOs in general. Take the outgoing CEO, Chakravarti, for example. There is this anecdote also that a couple of employees told me was that, you know, he refers to SBI cards as the United States of SBI cards running a fiefdom,

sort of mocking them about the amount of money that they make. Now, here is where things get really interesting. You see, SBI cards employees often make more money than their CEO. For example, according to the company's exchange filing, until December 2024, Chakravarti made 87 lakh rupees a year. But every SBI card's executive that Ronex spoke to makes over 1 crore rupees annually plus stock options worth 1 to 5 crore rupees. As you can imagine, this does not sit too well with these bosses.

But it's not just about. about hurt egos. The problem goes deeper. It is more structural and it is affecting SBI card's performance, not just on the borses, its net income and market share have also been sliding. So in today's episode, we will take a closer look at what is happening inside one of India's biggest credit card companies. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Das Sharma, and I don't chase the new cycle. Instead, every day. day of the week, my colleague Rahal Philipos and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 25th of March. So,

Ronak, a really great story. Why don't we start off straight with a little bit of company history background, you know, about SBI cards? Sure. So it's a, it's a very unique company in itself because it's, as you said, it's the only listed pure play credit card company in India. And it's, And it's been there for a while. It was first established in 99. It got listed in 2020. And ever since, it's been, it's been a middling performance in terms of the stock market performance of the company.

But it's been a very, very, I mean, it's been a major player in the credit card space in India. For the longest time, it was in terms of credit cards in force, in terms of spends, etc. It was the number two player, only second to HDFC Bank. but it has slipped to the third spot in the last 12 months in terms of both credit cards in force and the expenditure on credit cards that people are doing. So while it's a very significant company, its performance has been tanking off later. The credit card major also slipped from second to third place behind HGFC Bank and ICICI Bank

in its market share for both value and volume of credit card transactions. Also, while credit card spending between January last year and January this year grew by 10% on an industry level, for SBI cards, it fell by over 5%. So, if there haven't been any major operational changes since its inception, what happened now? So SBI card was set up as a joint venture between SBI and GE Capital, where GE Capital held a significant minority share in the company. And the CEO still came from SBI, but the employee said that it was as if there are two chief executatives in the company. And most of the decisions were actually a joint agreement between those two chiefs. GE Capital actually took care of the operations, etc., the HR functions and all of those things.

So the employee said that as GE Capital exit, I mean, G sold its shares to Carlisle and SBI. So after the exit of G. things have become slightly difficult inside SBI card because earlier it was more of a collaborative process where the two downs and three downs were also included in the decision making

of the entire company. But now it's become slightly top down. Right. So the way G.E. was handling employees, that was different, right? GE also made sure that you know, the employees were

taken care of through HR initiatives, etc. But those things have stopped. For instance, another anecdote this employee came up with was that there was no punch in, punch out time. And people only had to come, finish their work and leave. And that's how maturely the workplace behaved. But off late, they've started this punch in time where if you're late 15 minutes, on three days, you will be missing a day's salary, etc. So all of those things actually talk about how the authority. So this employee was again very direct in saying that. It almost feels as if the senior leadership believes that people inside the company don't want to work and we will make them work.

So which is why such examples come up, such measures come up. Right. Now, you know, the other thing, Ronak, that I was really curious about is, you know, CEO tenures at SBI cards. So, you know, from what I understood in your story, it is SBI Bank's board of directors who are appointing a new CEO for SBI cards every two years, right? So what exactly is the issue here, you know, I mean, apart from, you know, the obvious fact that, you know, change in company leadership every two years could be confusing for other employees? The couple of reasons. One, because SBI chiefs don't have the kind of experience in credit cards. So it takes them a while to get used to it.

And by the time they get used to it, it's time for them to leave. That's one reason. The second reason is, of course, there is a disparity in terms of the money that SBI chiefs earn and the money that SBI employees, SBI card employees earn. So a pretty big disparity there. Hmm, right. That makes sense. Right.

So it does seem a bit high-handed, right, on part of the board. Can you tell us a little bit about the SBI board, actually, Ronak? So the board mostly comprises of directors from SBI itself. SBI chairman is a part of it. SBI, other senior SBI folks are part of it. And then there are independent directors as well. But the thing is, these independent directors are also in some way or the other have been associated with SBI in some way.

So there is a lot of SBI, SBI influence on the board. So on the board of SBI card also, there are a couple of SBI executives. So any large decision obviously needs a board approval as well. So it's very difficult for anything to be green lighted without the SBI agreeing to it, the bank, because it has two of its senior execs on the board of SBI card as well. So there is no way that something can be executed or rolled out without SBI agreeing to that prospect. Right. Also, what happens to innovation, you know, when a company CEO is changing every two years, does it take a hit in some way?

Plus, you know, like you mentioned, the CEOs are not experienced specifically in running a pure credit card business, right? These bankers have a lot of experience. It's not as if they absolutely are clueless about credit cards. They're well-informed people. But the problem is that they do not know the intricacies of the business. That's the only problem. Otherwise, the ideas, I mean, off-lates in the last two, three years. or the last five years where the employee said

that it's more or less become a top-down approach where the idea stem from the CEO and his one-downs and then it's implemented throughout the workplace. So basically all these SBICR employees, they also feel this discontent because they think they're being left out of decision-making, especially when it comes to new products and innovation. The thing is that the employees say that there are a lot of plans

that come in from the CEO that do not seem viable, do not seem practical. Some of it are done only because on the whims of the chief execraigra, for instance. So there is a lot of class that happens, but ultimately the employee said that it comes with almost a compulsion that it has to be done. And there is no other way that the chief would have it. So they do it, which is why there is so much discontent, so much attrition at the senior level and so many people leaving.

So like Ronak says, when the new CEO Salila Ponday steps into the company's Gurgaun office on the 1st of April, she is going to have to do a lot or rather undo a lot in very little time. And if she's not careful, her two-year term will fly by with very little to show for it and before she knows it, the next she will be walking in. And the cycle will continue. By the way, what did you think of this episode? Do you prefer this format over my usual monologue style episodes? I would really love to know.

So please write to me at snigda at the ken.com or you can also send me a WhatsApp text with your feedback at our WhatsApp number 89711-08379. Also, please do not forget to share, like, subscribe and follow wherever you can. It makes a huge difference for us here on the other side. Thank you for listening and catch you tomorrow. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the Ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Snigda Sharma and edited by Rajiv Sien.