The State Bank of India

7/29/2019 The State Bank of India

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The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size,

number of branches, market capitalization and profits is today going through a momentous phase

of Change and Transformation the two hundred year old Public sector behemoth is today

stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign

Banks a run for their money.

The bank is entering into many new businesses with strategic tie ups Pension Funds, General

Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant

Acquisition, Advisory Services, structured products etc each one of these initiatives having a

huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new banking models, to

expand its Rural Banking base, looking at the vast untapped potential in the hinterland and

proposes to cover 100,000 villages by 2014.

Introduction

State Bank of India is the largest and one of the oldest commercial bank in India, in existence for

more than 200 years. The bank provides a full range of corporate, commercial and retail banking

services in India. Indian central bank namely Reserve Bank of India (RBI) is the major

shareholder of the bank with 59.7% stake.SBI has the largest branch and ATM network spread

across every corner of India. The bank has a branch network of over 14,000 branches (including

subsidiaries).As of 31 March 2012, the bank had 173 overseas offices spread over 34 countries.

In recent past, SBI has acquired banks in Mauritius, Kenya and Indonesia. As of now the bank

has total staff strength of 292,215 as on 23rd July 2012. Of this, 29.51% are officers, 45.19%

clerical staff and the remaining 25.30% are sub-staff. The bank is listed on the Bombay Stock

Exchange, National Stock Exchange, Kolkata Stock Exchange, Chennai Stock Exchange and

Ahmedabad Stock Exchange. SBI group accounts for around 25% of the total business of the

banking industry while it accounts for 35% of the total foreign exchange in India.

SBI provides a range of banking products through its vast network of branches in India and

overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group has

the largest banking branch network in India. SBI has 14 local head offices situated at Chandigarh

(Punjab & Haryana), Delhi, Lucknow (Uttar Pradesh), Patna (Bihar), Kolkata (West Bengal),


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Guwahati (North East Circle), Bhubaneswar (Orissa), Hyderabad (Andhra Pradesh), Chennai

(Tamil Nadu), Trivandrum (Kerala), Bengaluru (Karnataka), Mumbai (Maharashtra), Bhopal

(Madhya Pradesh) & Ahmedabad (Gujarat) and 57 Zonal Offices that are located at important

cities throughout the country.

Mission statement:

To retain the banks position as the premier Indian financial services. It also aims to be a group

with world class standards and significant global business commitments to excellence in

customer, shareholder and employee satisfaction so as to play a leading role in expanding and

diversifying financial services while continuing emphasis on its development banking role.

Vision:

To be a premier Indian financial services group with global perspective, world class standard of

the efficiency and professionalism and also its core institutional values, To retain its position in

the country as a pioneer in developing countries, It also aims to maximize its shareholders value

through high sustained earnings per share, To become an institution with a culture of mutual care

and commitment. It also focuses on a pleasant working environment to have continuous learning

opportunities.

Values:

Excellence in customer service

Profit orientation Belonging and commitment to bank Fairness in all dealings and relations Risk taking and innovations

Team playing

Learning and renewal Integrity Transparency and discipline in

policies and systems


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HISTORY

EVOLUTION OF SBI

The origin of the State Bank of India goes back to the first decade of the nineteenth century with

the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank

received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique

institution, it was the first joint-stock bank of British India sponsored by the Government of

Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed

the Bank of Bengal. These three banks remained at the top of modern banking in India till their

amalgamation as the Imperial Bank of India on 27 January 1921.

The three banks were governed by royal charters, which were revised from time to time. Each

charter provided for a share capital, four-fifth of which were privately subscribed and the rest

owned by the provincial government. The members of the board of directors, which managed the

affairs of each bank, were mostly proprietary directors representing the large European managing

agency houses in India. The rest were government nominees, invariably civil servants, one of

whom was elected as the president of the board.

Business

The business of the banks was initially confined to discounting of bills of exchange or other

negotiable private securities, keeping cash accounts and receiving deposits and issuing and

circulating cash notes. Loans were restricted to Rs.one Lakh and the period of accommodation

confined to three months only. The security for such loans was public securities, commonly

called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and

no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium,

indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but

such finance by way of cash credits gained momentum only from the third decade of the

nineteenth century. All commodities, including tea, sugar and jute, which began to be financed

later, were either pledged or hypothecated to the bank.


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Imperial Bank

The Imperial Bank during the three and a half decades of its existence recorded an impressive

growth in terms of offices, reserves, deposits, investments and advances, the increases in some

cases amounting to more than six-fold. The financial status and security inherited from its

forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking

which the Imperial Bank consistently maintained and the high standard of integrity it observed in

its operations inspired confidence in its depositors that no other bank in India could perhaps then

equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian

banking industry and also secure a vital place in the country's economic life.

When India attained freedom, the Imperial Bank had a capital base (including reserves) of

Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and

a network of 172 branches and more than 200 sub offices extending all over the country.

First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India was given

the highest priority. The commercial banks of the country including the Imperial Bank of India

had till then confined their operations to the urban sector and were not equipped to respond to the

emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the

economy in general and the rural sector in particular, the All India Rural Credit Survey

Committee recommended the creation of a state-partnered and state-sponsored bank by taking

over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate

banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India

was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking

system thus passed under the direct control of the State. Later, the State Bank of India(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight

former State-associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480

offices comprising branches, sub offices and three Local Head Offices inherited from the


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Imperial Bank. The concept of banking as mere repositories of the community's savings and

lenders to creditworthy parties was soon to give way to the concept of purposeful banking

subserving the growing and diversified financial needs of planned economic development. The

State Bank of India was destined to act as the pacesetter in this respect and lead the Indian

banking system into the exciting field of national development.

Competitors and other players in the field:-

Top Performing Public Sector Banks

Andhra Bank Allahabad Bank Punjab National Bank Dena Bank Vijaya Bank

Top Performing Private Sector Banks

HDFC Bank ICICI Bank AXIS Bank Kotak Mahindra Bank Centurion Bank of Punjab

Top Performing Foreign Banks

Citibank Standard Chartered


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HSBC Bank ABN AMRO Bank American Express

Strengths

SBI is the largest bank in India in terms of market share, revenue and assets. As per recent data the bank has more than 14,000 outlets and 25,000 ATM centers The bank has its presence in 32 countries engaging currency trade all over the world Strong domestic market position sustaining reach and customer confidence Strong capital position helping pursue growth initiatives

Weakness

Lack of proper technology driven services when compared to private banks In spite of modernization, the bank still carries the perception of traditional bank to new

age customers

Opportunities

SBIs merger with five more banks namely State Bank of Hyderebad, State bank ofPatiala, State bank of Bikaber and Jaipur, State of bank of Travancore and State bank of

Mysore are in approval stage

Mergers will result in expansion of market share to defend its number one position Since the bank is yet to modernize few of its banking operations, there is a better scope of

using advanced technologies and software to improve customer relations


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Threats

FDIs allowed in banking sector is increased to 49% , this is a major threat to SBI aspeople tend to switch to foreign banks for better facilities and technologies in banking

service

Customer prefer to switch to private banks and financial service providers for loans andmortgages, as SBI involves stringent verification procedures and take long time for

processing.


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Board of Directors

Pratip Chaudhuri (born 1954), a 1974 batch alumnus of University Business School -

Chandigarh, is the current chairman of the State Bank of India. He took charge from O.P. Bhatt,

on 7 April 2011.Prior to that he was the Deputy Managing Director (DMD) of the International

Division of SBI.He has experience covering International Banking, Credit, Corporate Banking,

Treasury and Operations, besides overseas experience in Canada. He was earlier posted as ChiefGeneral Manager (Foreign Offices), Managing Director, former State Bank of Saurashtra and

Chief General Manager, Chennai Circle. He joined the State Bank of India 38 years back as a

probationary officer in 1974.He has held several important positions in SBI including Chief

General Manager of Chennai Circle. He is also credited with the merger of State Bank of

Saurashtra in 2008, where he was a director.


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Associate Banks

SBI has five associate banks:

State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore State Bank of Saurashtra - merged with SBI in 2008. State Bank of Indore - merged with SBI in 2010.

Earlier SBI had only seven associate banks that, with SBI, constitute the State Bank Group. Alluse the same logo as SBI and all the associates use the "State Bank of" name, followed by the

regional headquarters' name. Originally, the then seven banks that became the associate banks

belonged to princely states until the government nationalised them between October 1959 and

May 1960. In tune with the first Five Year Plan, emphasizing the development of rural India, the

government integrated these banks into the State Bank of India to expand its rural outreach.

There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and

streamline operations.

The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra

merged with SBI, reducing the number of state banks from seven to six. Then on 19 June 2009

the SBI board approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds

98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the

government hold the balance of 1.77%.

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of 12,448

and over 21,000 ATMs. Also, following the acquisition, SBI's total assets will inch very close to

the Rs 10-lakh crore mark. Total assets of SBI and the State Bank of Indore stood at Rs 998,119

crore as on March 2009. The process of merging of State Bank of Indore was completed by April

2010, and the SBI Indore Branches started functioning as SBI branches on 26 August 2010.


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International Presence

As of 31 March 2012, the bank had 173 overseas offices spread over 34 countries. It has

branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran,

Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka,

Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and

representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.

SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank:

State Bank of India (Mauritius).

In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten

branchesnine branches in the state of California and one in Washington, D.C. The 10th branch

was opened in Fremont, California on 28 March 2011. The other eight branches in California are

located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and

Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches,

four in the Toronto area and three in British Columbia.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant

Bank and received permission in 2002 to commence retail banking. It now has five branches in

Nigeria.

In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In

Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In

Indonesia, it owns 76% of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin

(China).

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8

million in October 2005.


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Services of State Bank of India

State Bank of India Services is most varied and innovative amongst all its contemporaries. State

Bank of India Services includes a host of products and services to suit all types of consumers.

State Bank of India Services is offered through the following subsidiaries and Joint Ventures:

Banking Subsidiaries - State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad

(SBH), State Bank of Indore (SBI), State Bank of Mysore (SBM), State Bank of Patiala (SBP),

State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT).

Foreign Subsidiaries - State bank of India International (Mauritius) Ltd., State Bank of India

(California), State Bank of India (Canada) and INMB Bank Ltd, Lagos.

Non- banking Subsidiaries - SBI Capital Markets Ltd (SBICAP), SBI Funds Management Pvt

Ltd (SBI FUNDS), SBI DFHI Ltd (SBI DFHI), SBI Factors and Commercial Services Pvt Ltd

(SBI FACTORS) and SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

Joint ventures - SBI Life Insurance Company Ltd (SBI LIFE), SBI General Insurance

Company Limited, SBI-SG Global Securities Private Limited.


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Products and services offered by State Bank of India:

A. Personal Banking

Term Deposits Loan to affluent pensioners Recurring Deposits Property Loan

B. Home Loans

C. Loan against share/debentures

D. SBI Car Loan


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E. Rent Plus

F. Education Loans

G. NRI Services

H. Agriculture / Rural

Symbol & Slogan

Logo Designer: Shekhar Kamat, NID, Ahmedabad

The circular form of the emblem suggests unity, completeness, the fullness of mans being and

his growing consciousness and continual expansion (of the bank); like concentric rings in water,to cover the entire country; the small circle in the center connotes that despite the banks size, it

is the small man who holds the center of State Bank stage.

Logo release: 01 October 1971, on the day of inauguration of SBI Central Office building


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Previous logo:

The first Emblem of the State Bank of India adopted in 1955 is showing a banyan tree. Thebanyan tree has strong roots and its branches are capable of propagating and growing because of

its aerial roots

The Marketing Initiatives by State Bank of India

SBI carried out various marketing initiatives to enhance its reach. They included

Segregating and targeting existing high value customers, Cross sales of other products, Setting up call centers and outbound sales force to secure new customers. Plans were also made to utilize database marketing to pursue large and medium sized

Corporate, government and trade finance customers.

Database marketing was expected to draw increased revenue from cross selling, lowercosts and increased customer loyalty. SBI also introduced various other ways of reaching

out to customers like extension of hours of work(SBI increased daily working hours by

two hours and Sunday banking was introduced) and

Aggressive marketing through print and television media.


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Some of the strategies to cope with the current scenario

It is the part of SBI`s philosophy to open new branches .The Bank is forging ahead withcutting edge technology and innovative new banking models, to expand its Rural

Banking base, looking at the vast untapped potential in the hinterland and proposes to

cover 100,000 villages in the next two years. SBI is planning to hire 11,000 employees in

the current fiscal. It is also focusing at the top end of the market, on whole sale banking

capabilities to provide Indias growing mid / large Corporate with a complete array of

products and services.

.

Conclusion


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Indias largest bank, the State Bank of India (SBI) has beaten all expectations. Despite being a

public sector undertaking, the SBI has outperformed several private banks in almost all the areas.

An impressive and probably the highest growth in the industry has been observed by the bank in

housing loan (20 per cent), small and medium enterprises (25 per cent), auto loans (30per cent)

and mid corporate (24 per cent).

SBIs growth rate in advances stands at 23.4 per cent, which is above the average market growth

of 21.6 per cent. Even the yield on advances has increased from 8.67 per cent to 9.90 per cent

Large corporates (23 per cent growth) have been one of the favourites of the SBI. But an

impressive growth in the mid corporate (24 per cent increase) and small and medium enterprises

(26 per cent increase) has given an indication that Bhat is equally interested in other segments

also.

SBI has done extremely well in the international banking business. Traditionally, the

international business constitutes six to seven per cent of the total business. However, this figure

has risen to 10 per cent this year. Banks claims highest provider of corporate syndicated credit

and capture India related business in high potential countries. An impressive 50 per cent growth

in international advances, to Rs 58135 crore, has been declared by the bank.

On the income side the bank has registered a robust 29 per cent increase in income from other

heads. Income from mutual funds and insurance has seen an impressive 79 per cent increase. The

banks cost to income ratio has declined by 520 basis points from 54.20 per cent to 49 per cent,

which leads to an impressive growth of operating profit by 31 per cent to Rs 13107 crore.

Several initiatives, like reverse mortgage, have been taken up by the bank. It is claiming to give

the best of customer services like opening the account in 10 minutes, home loan disbursal within

three days - for high value loans and increased employee productivity. In rural areas, the bank

has employed more than 3000 people to augment its sales.


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The State Bank of India or SBI bank is Indias largest banking institution, with its headquarters

in Mumbai. This is the only Indian bank that has won recognition and been listed among the top

100 world banks list based on the Fortune Global 500 rating.

Slogans

With you all the way Pure banking nothing else The Banker to every Indian The Nation banks on us

Awards and Recognitions

1. The only Indian bank to find a place in the Fortune Global 500 list- improved the ranking from

495 to 380 this year.

2. Improved the ranking from 290th position last year to 150th this year in Forbes 2000 list of

largest companies in the world.

3. Reputation Institute, US, has ranked SBI 29th.

4. Awarded the Bank of the Year 2008- India by Banker Magazine, London.

5. Ranked 59 in global 500 Financial Brand Recognition Ranking by Brand Finance, London08.

6. Ranking in The Banker- Top 1000 World Banks, improved to 57 from 70 in 2007. Only

Indian bank among top 100 banks in world. Ranked 8th in top 25 banks in Asia.

7. Ranked # 1 in survey of top 5 companies in India in terms of financial reputation by Wall

Street Journal- Asia.

Others

Best Executive Award to the Chairman by Asia Money.

State Bank of India also improved its ranking in Fortune 500 Global List,

Forbes list of 2000 largest companies in the world, Banker list of top 1000 world banks,

Brand FinanceGlobal 500 Financial Brand recognition, to name a few.


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Most Admired Infrastructure Financier Award by KPMG,

Top Public Sector Bank under SME Financing by Dun and Bradstreet

The Bank was voted, for the third year in a row, as the Most Preferred Housing Loan and

Most Preferred Bank in the CNBC AWAAZ Consumer Awards in a survey conducted by

CNBC TV18 in association with AG Nielsen & Company.

The Bank was also awarded the Best Home Loan Provider as well as The Best Bank by

Outlook Money Awards, 2008.

SBI has been rated as the Best Public Sector Bank for Rural Reach by Dun & Bradstreet.

The Bank has won awards for topping SHG-Bank Credit linkage in Orissa, Jharkhand,

Maharashtra, Uttarakhand, Tamil Nadu and Uttar Pradesh.

The Bank was awarded Readers Digest Pegasus Corporate Social Responsibility Award 2007

in recognition of its contribution towards Rural Community Development.

The Bank was conferred the following National awards by the Government of India (GOI),

Ministry of Micro Small and Medium Enterprises for the FY 2007- 08:

(i) First under "National Awards for excellence in lending to Micro Enterprises".

(ii) Second under "National Awards for Excellence in MSE Lending".

(iii) The Bank was also presented an award for outstanding performance in the area of finance to

SMEs by Dun & Bradstreet.

State Bank of India Voted THE BEST BANK in Cash Management Services in local currency

by AsiaMoney.

State Bank of India wins 2 awards for Best Rural Banking Initiative and Best IT Architecture


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CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility has always been a part of the State Bank of India covering

various social, environmental and welfare activities. In SBI, they believe that they owe a solemn

duty to the less fortunate and underprivileged members of the society to make a sustainable

social change in their development.

Focus areas for CSR activities are:

Supporting Education

Supporting Healthcare

Supporting Girl Children & Child development.

Assistance to poor & underprivileged.

Environment protection.

Clean Energy.

Entrepreneur development programme.

Help in National calamities

The breakup of sectorial deployment of CSR spends during the year:


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Supporting Education:

To support school education and to bring happiness to millions of school children specially the

underprivileged children, Bank provided 1,20,000 electric fans to 12,000 schools across India.

During the year, the Bank also provided large number of buses/vans to needy schools.

Preference has been given to schools for physically/mentally challenged children, and children

belonging to economically weaker sections etc. SBI also assisted them with computers, furniture

and other accessories.

To transform and upgrade the efficacy of education in schools run by Municipal Corporation of

Greater Mumbai, SBI is extending funding support.

Responsibility to the Nation:

Girl Child adoption- Our branches have adopted girl children from underprivileged class and

assist them financially for their education. Bank has adopted 17627 girl children.

Assistance for Natural Calamities: SBI has always been at forefront to help the States affected

by natural calamities. During the current fiscal, the Bank has lent its helping hand to the states

who faced problems, with donations of Rs 5.50 Crores to the Chief Minister's Relief Fund of the

respective states to provide help to the people affected by natural calamities.


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Financial Status as of July 2012

Revenue: US$ 36.950 billion (2012)

Profit: US$ 3.202 billion (2012)

Total assets: US$ 359.237 billion (2012)

In Forbes magazine it ranks as 267 th in term of sales, 256th in term of profits, 69th in terms of

assets and 298th in terms of market value out of 2000 top most companies around the world.

Stock Market: Share price of State bank of India is been traded at a price of 2484.80 on BSE and

2486.70 on NSE as on 4th January 2013.

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The State Bank of India