SBI's Bold Mandate: Subsidiaries to Fund Own Growth and Tackle Talent Drain
Share- Nishadil
- August 25, 2025
- 0 Comments
- 3 minutes read
- 10 Views

State Bank of India (SBI) Chairman Dinesh Kumar Khara is steering the nation's largest lender into a new era of strategic independence and competitive edge. In a decisive move, Khara has issued a clear, impactful directive to the bank's constellation of highly successful subsidiaries: it's time to fuel their own growth through enhanced internal accruals and tackle the critical challenge of talent retention by making their compensation packages more attractive.
This isn't merely a suggestion; it's a strategic imperative aimed at fortifying SBI's ecosystem, reducing the parent bank's funding burden, and ensuring these vital arms can vigorously compete in India's dynamic financial landscape.
Khara's vision is holistic: empower the subsidiaries not just financially, but also by creating an environment where top talent chooses to stay and thrive.
The core of Khara's message revolves around self-sufficiency. While subsidiaries like SBI Card, SBI Funds Management, SBI Life, SBI General, and SBI Capital Markets have been stellar performers, significantly contributing to the bank’s consolidated profits, they have historically relied on the parent for growth capital.
Khara is championing a shift, urging these entities to significantly ramp up their internal accruals. The goal is to generate sufficient profits within each subsidiary to fund their expansion plans, reducing the dependence on the SBI balance sheet and freeing up capital for the parent bank's core operations.
This strategic pivot is not born of necessity due to underperformance; quite the contrary.
These subsidiaries are consistently delivering robust profits, with SBI Card and SBI Life being particularly strong contributors. Khara’s proactive stance aims to future-proof their growth, fostering greater autonomy and financial muscle.
Perhaps the most compelling aspect of Khara’s directive is his sharp focus on human capital.
The SBI Chairman openly acknowledged a stark reality: senior and middle management salaries at SBI lag significantly behind those offered by private sector powerhouses like HDFC Bank, ICICI Bank, and Axis Bank. Even some public sector peers, such as Bank of Baroda, have managed to offer more competitive compensation in certain roles.
This pay gap isn't just an internal HR issue; it's a strategic vulnerability.
In an industry where talent is king, the inability to offer market-competitive salaries directly impacts SBI's capacity to attract and, more importantly, retain its brightest minds. The consequences are clear: a potential brain drain to competitors who can afford to pay more.
Here’s where the subsidiaries gain a distinct advantage.
Unlike the heavily regulated and often standardized pay scales of the parent bank, SBI’s subsidiaries enjoy greater operational flexibility in structuring their compensation packages. Khara sees this as a golden opportunity. By leveraging this autonomy, subsidiaries can design more attractive salary structures, performance incentives, and career growth paths, making them formidable competitors in the talent market.
This renewed focus on both financial independence and talent retention is part of a larger, ambitious strategy to bolster SBI’s overall competitiveness.
The bank, despite its massive scale and public sector mandate, is acutely aware of the market's valuation of its private sector rivals. With a market capitalization often dwarfed by its private counterparts, SBI recognizes that attracting top-tier talent is paramount to bridging this gap and driving innovation.
The initiative also aligns with SBI's ongoing efforts to optimize its workforce.
The bank is reportedly exploring options like a voluntary separation scheme (VSS) for certain employee categories, aiming to streamline operations and allocate resources more efficiently. These moves collectively signal a dynamic shift within SBI, driven by a commitment to agility, market responsiveness, and sustained leadership in India’s banking sector.
Dinesh Kumar Khara’s bold vision for SBI's subsidiaries represents a pivotal moment.
By empowering them to stand on their own financial feet and compete aggressively for talent, he is not just securing their individual futures but also strategically strengthening the entire SBI conglomerate. This forward-thinking approach is set to ensure SBI's enduring legacy as a powerhouse of Indian finance, ready to face the challenges and seize the opportunities of tomorrow.
.- India
- Business
- News
- BusinessNews
- FinancialStrategy
- StateBankOfIndia
- Sbi
- IciciBank
- HdfcBank
- BankOfBaroda
- PublicSectorBanks
- CSSetty
- PrivateSectorBanks
- TalentRetention
- SbiLife
- SbiCard
- SbiGeneralInsurance
- SbiCaps
- DineshKumarKhara
- SbiSubsidiaries
- SbiFundsManagement
- SbiGeneral
- SbiCap
- InternalAccruals
- SalaryDisparity
- EmployeeCompensation
Disclaimer: This article was generated in part using artificial intelligence and may contain errors or omissions. The content is provided for informational purposes only and does not constitute professional advice. We makes no representations or warranties regarding its accuracy, completeness, or reliability. Readers are advised to verify the information independently before relying on