A Project Report on

History of State Bank

of India (SBI)


Index
NO. DESCRIPTION

PAGE NO.
1 Certificate
2 Declaration
3 Acknowledgement
4 Introduction 1
5 History of Banking 2-6
6 About SBI
(Mission, Awards & Recognition, Structure,
Competitors, Products of SBI)
7-38
7 SWOT Analysis 39-45
8 Conclusion 46
9 Bibliography 47








DECLARATION

I, JINAL KAMLESH MOJIDRA Student of master of commerce, Banking &Finance
Semester-l of S.K SOMAIYA DEGREE COLLEGE OF ARTS, SCIENCE &COMMERCE,
Vidyavihar . Hereby declare that, I have Project Report on HISTORY OF STATE BABNK OF
INDIA (SBI) for the AcademicYear-2014-15

The information submitted is true &original to the best of my knowledge.





JINAL KAMLESH MOJIDRA
MASTER OF COMMERCE
BANKING &FINANCE





ACKNOWLEDGEMENT

I wish to express my deep sense of gratitude to my guide Mr. Bosco Peter sir for him able
guidance &useful suggestion, which help me in completing in my project work, in time.

Apart from the affords from me the success of any project depends largely on the encouragement
& guideline of many others, I take this opportunity to express my gratitude to the people. Who
have been instrumental in the successful completion of project.

Finally, yet importantly, I would like to express my thanks.





JINAL KAMLESH MOJIDRA





INTRODUCTION



INTRODUCTION

The word bank i t deri ved from the word bancus or banque that i s
French. There was other of the opinion that the word bank is originally derived from the
German word back meaning joint for which was Italianized into banco. But whatever be the
origin of the word bank as Prof. Rramchandra Rao says. It would trace the history of banking in
Europe from middle ages.Generall y, banks do the busi ness of money t hey t ake
deposits of moneys from client and give loan t o the person who has need of
money. But i n this age, for the conveni ence of customer, banks provi des some
other servi ces to t heir customer such as bankers cheque, overdraft , i nternet
banking, ATM faci lit y, payi ng of bil ls, credit card, t el egraphi c t ransfer,
insurance, demat et c.

For a peopl e, it is difficult t o keep a very bi g amount of money in hi s house
safel y. So, peopl e save thei r money t o bank. Bank gi ves loan to the person who
has need of money and gets hi gher interest on i t than t he int erest of deposi t. The
margin bet ween the interest of loan and interest of deposi t is the income of
bank. Now a Days banking is not in its traditional way, with the advancement of technology its
focusing on more comfort of customer providing services such as:
online banking
investment banking
electronic banking
internet banking
pc banking /mobile banking
e-banking

1












HISTORY OF
BANKING








HISTORY OF BANKING

As earl y as 2000 B. C. the Babyl onians had developed a banking system. There is
evi dence t o show the t empl es of Babylon were used as banks. Aft er a peri od of
time, t here was a spread of irrel i gion, which soon dest royed t he publi c sense of
securit y in deposi ting money and valuable in t empl es. The priests were longer
acting as financi al agents. The Romans did minute regulati ons, as to conduct
privat e banking and to creat e confidence in it. Loan banks were also common i n
Rome. From t hese the poor cit izens received l oans without payi ng int erest,
against securit y of l and for 3 or 4 years.

During t he earl y periods, although pri vat e i ndi vidual mostl y did the banking
business, many countri es est ablished publi c banks either for t he purpose of
facili tat ing commerce or t o serve t he government.

However, upon the revi val of ci vilization, growi ng necessit y forced the issued
in the middle of t he 12
t h
century and banks were established at Veni ce and
Genoa. The Bank of Veni ce established in 1157 is supposed t o be the most
anci ent bank. Ori gi nall y, it was not a bank in the modern sense, during simpl y
an offi ce for the t ransfer of the public debt.

In Indi a, as earl y as the Vedi c Period, banking, i n most crude from exist ed. The
books of Manu cont ain references regarding deposits, pl edges, poli cy of loans,
and rat e of int erest. True, the banking i n those days largel y mint money lendi ng
and they did not know the compli cated mechanism of modern banking.
2
This is t rue not onl y in the case of Indi a but also of other countries. Alt hough,
the business of banking i s as old as authenti c hist ory, banking instituti ons have
since t han changed in charact er and content very much. They are developed
from a few simpl e operations i nvol ving the satisfacti on of a few i ndivi dual
wants to the complicat ed mechanism of modern banki ng, involvi ng the
satisfaction of capit al slowl y seeking employment and thus provi ding the v ery
life bl ood of commerce.















3
TYPE OF BANKS
Regi onal Rural Bank (RRB)
Nat ionalized Bank
Stat e Bank Group
Co-operative Bank
Privat e Bank
Forei gn Bank

RESERVE BANK OF INDIA

The Hilt on-young commi ssion, appointed i n 1926 has recommended t he
necessit y of cent ral l y empowered insti t ution t o have effective control over
currency and financi al t ransaction in t he count y. Accordi ngl y, the Government
had then passed Reserve Bank of Indi a Act , 1934 and est ablished t he Reserve
Bank of Indi a with effect from 1
s t
April 1935. The pri ncipal ai m behi nd thi s was
to organize proper control over the currency management in the int erest of
country benefits and to mai nt ain financi al st abi lit y. Wit h thi s, the RBI mainl y
looks aft er the following import ant funct ions:

To keep effecti ve control over creati on of credits and currency suppl y
To control t he Banki ng t ransactions of Central and St at e Government s.
To act as Central administ ered Authorit y of al l ot her Banks i n the count ry.
To organize cont rol over Forei gn Currency Transacti on.
To assi st for improvement i n financi al aspect of the count ry.


4
NATIONALISED BANKS

The Banking Company Act est abl ishes it in Jul y 1969 by nat ionalizati on of 14
major banks of Indi a. The sent percent ownership of t he bank is of gove rnment
of India.

STATE BANK GROUP

The State Bank of India was established under
the State Bank of India Act, 1955, the subsidiary
banks under the State Bank of India (subsidiary
Banks) Act 1959. The Reserve Bank of India
owns the State Bank of India, to a large extent,
and rest of the part is some private ownership in
the share capital of State Bank of India. The
State Bank of India owns the subsidiary Banks.


OLD PRIVATE BANK

These banks are registered under Company Act, 1956. Basic Difference
between co-operative banks and private banks is its aim. Co-operative
banks work for its member and private banks work for earn profit.


5
NEW PRIVATE BANKS

These banks lead the market of Indian banking business in very
short period. Because of its variety services and approach to handle
customer and also because of long working hours and speed of
services. This is also registered under the Company Act. 1956.
Between old and new private sector bank, there is wide difference.

FOREIGN BANKS

Foreign Bank means multi-countries bank. In case of India Foreign Banks are such Banks.
Which open its branch office in India and their head office is outside of India.












6






ABOUT SBI












STATE BANK OF INDIA

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 apex of modern banking in India till their
amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as a
result of the compulsions of imperial finance or by the felt needs of local European commerce
and were not imposed from outside in an arbitrary manner to modernise India's economy. Their
evolution was, however, shaped by ideas culled from similar developments in Europe and
England, and was influenced by changes occurring in the structure of both the local trading
environment and those in the relations of the Indian economy to the economy of Europe and the
global economic framework.


Bank of Bengal H.O.

7
Establishment

The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock
banking in India. So was the associated innovation in banking, viz. the decision to allow the
Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a
restricted geographical area. This right of note issue was very valuable not only for the Bank of
Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the
capital of the banks, a capital on which the proprietors did not have to pay any interest. The
concept of deposit banking was also an innovation because the practice of accepting money for
safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous
bankers had not spread as a general habit in most parts of India. But, for a long time, and
especially up to the time that the three presidency banks had a right of note issue, bank notes and
government balances made up the bulk of the invertible resources of the banks.

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.
8
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. Demand promissory notes were signed by the borrower in favour of
the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on
the mortgage of houses, land or other real property was, however, forbidden.


Indians were the principal borrowers against deposit of Company's paper, while the business of
discounts on private as well as salary bills was almost the exclusive monopoly of individuals
Europeans and their partnership firms. But the main function of the three banks, as far as the
government was concerned, was to help the latter raise loans from time to time and also provide
a degree of stability to the prices of government securities.

Old Bank of Bengal


9
Major change in the conditions
A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras
occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue
of the presidency banks was abolished and the Government of India assumed from 1 March 1862
the sole power of issuing paper currency within British India. The task of management and
circulation of the new currency notes was conferred on the presidency banks and the
Government undertook to transfer the Treasury balances to the banks at places where the banks
would open branches. None of the three banks had till then any branches (except the sole attempt
and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters
had given them such authority. But as soon as the three presidency bands were assured of the
free use of government Treasury balances at places where they would open branches, they
embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies
of the three presidency banks covered most of the major parts and many of the inland trade
centres in India. While the Bank of Bengal had eighteen branches including its head office,
seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.


Bank of Madras Note Dated 1861 for Rs.10

10
Presidency Banks Act
The presidency Banks Act, which came into operation on 1 May 1876, brought the three
presidency banks under a common statute with similar restrictions on business. The proprietary
connection of the Government was, however, terminated, though the banks continued to hold
charge of the public debt offices in the three presidency towns, and the custody of a part of the
government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta,
Bombay and Madras into which sums above the specified minimum balances promised to the
presidency banks at only their head offices were to be lodged. The Government could lend to the
presidency banks from such Reserve Treasuries but the latter could look upon them more as a
favour than as a right.

Bank of Madras
The decision of the Government to keep the surplus balances in Reserve Treasuries outside the
normal control of the presidency banks and the connected decision not to guarantee minimum
government balances at new places where branches were to be opened effectively checked the
growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell
sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits
of that bank were mainly derived from trade dispersed among a number of port towns and inland
centres of the presidency.

11
India witnessed rapid commercialisation in the last quarter of the nineteenth century as its
railway network expanded to cover all the major regions of the country. New irrigation networks
in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash
crops, a portion of which found its way into the foreign markets. Tea and coffee plantations
transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of
estate agriculture par excellence. All these resulted in the expansion of India's international trade
more than six-fold. The three presidency banks were both beneficiaries and promoters of this
commercialisation process as they became involved in the financing of practically every trading,
manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay
were engaged in the financing of large modern manufacturing industries, the Bank of Madras
went into the financing of large modern manufacturing industries, the Bank of Madras went into
the financing of small-scale industries in a way which had no parallel elsewhere. But the three
banks were rigorously excluded from any business involving foreign exchange. Not only was
such business considered risky for these banks, which held government deposits, it was also
feared that these banks enjoying government patronage would offer unfair competition to the
exchange banks which had by then arrived in India. This exclusion continued till the creation of
the Reserve Bank of India in 1935.


Bank of Bombay

12
Presidency Banks of Bengal
The Presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in
1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a
giant among Indian commercial banks had emerged. The new bank took on the triple role of a
commercial bank, a banker's bank and a banker to the government.


But this creation was preceded by years of deliberations on the need for a 'State Bank of India'.
What eventually emerged was a 'half-way house' combining the functions of a commercial bank
and a quasi-central bank.The establishment of the Reserve Bank of India as the central bank of
the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased
to be bankers to the Government of India and instead became agent of the Reserve Bank for the
transaction of government business at centres at which the central bank was not established. But
it continued to maintain currency chests and small coin depots and operate the remittance
facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It also
acted as a bankers' bank by holding their surplus cash and granting them advances against
authorised securities. The management of the bank clearing houses also continued with it at
many places where the Reserve Bank did not have offices. The bank was also the biggest
tendered at the Treasury bill auctions conducted by the Reserve Bank on behalf of the
Government.


The establishment of the Reserve Bank simultaneously saw important amendments being made
to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier
restrictions on its business were removed and the bank was permitted to undertake foreign
exchange business and executor and trustee business for the first time.

13
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 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.


Stamp of Imperial Bank of India

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.

14
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
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 sub
serving 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.The Bank is actively involved since 1973
in non-profit activity called Community Services Banking. All SBI branches and administrative
offices throughout the country sponsor and participate in large number of welfare activities and
social causes. SBI business is more than banking because we touch the lives of people anywhere
in many ways. SBI commitment to nation-building is complete & comprehensive.

15
TECHNOLOGY UPGRADATION

SBIs Information Technology Programme aims at achieving efficiency in operations, meeting
customer and market expectations and facing competition. SBI achievements are summarized
below:

FULL BRANCH COMPUTERISATION (FCBs): All the branches of the Bank are now fully
computerised. This strategy has contributed to improvement in customer service.


ATM SERVICES: There are 5290 ATMs on the ATM Network. These ATMs are located in
1721 centers spread across the length and breadth of the country, thereby creating a truly national
network of ATMs with an unparalleled reach. Value added services like ATM locator, payment
of fees for college students, multilingual screens, voice over and drawl of cash advance by SBI
credit card holders have been introduced.

INTERNET BANKING (INB): This on-line channel enables customers to access their account
information and initiate transactions on a 24x7, boundary less basis. 2225 branches, covering 555
centers are extending INB service to their customers. All functionalities other than Cash and
Clearing have been extended to individual retail customers. A separate Internet Banking Module
for Corporate customers has been launched and available at 1305 branches. Bulk upload of data
for Corporate, Inter-branch funds transfer for Retail customers, Online payment of Customs duty
and Govt. tax, Electronic Bill Payment, SMS Alerts, E-Poll, IIT GATE Fee Collection, Off-line
Customer Registration Process and Railway Ticket Booking are the new features deployed.


16
GOVT. BUSINESS : Software has been developed and rolled out at 7785 fully computerised
branches. Electronic generation of all reports for reporting, settlement and reconciliation of Govt.
funds is available.

STEPS: Under STEPS, the bank's electronic funds transfer system, the Products offered are
eTransfer (eT), eRealisation (eR), eDebit (CMP) and ATM reconciliation. STEPS handles
payment messages and reconciliation simultaneously.

SEFT: SBI has launched the Special Electronic Fund Transfer (SEFT) Scheme of RBI, to
facilitate efficient and expeditious Inter-bank transfer of funds. 241 branches of our Bank in
various LHO Centres are participating in the scheme. Security of message transmission has been
enhanced.

MICR Centre: MICR Cheque Processing systems are operational at 16 centre viz. Mumbai,
New Delhi, Chennai, Kolkata, Vadodara, Surat, Patna, Jabalpur, Gwalior, Jodhpur, Trichur,
Calicut, Nasik, Raipur, Bhubaneswar and Dehradun.

Core Banking: The Core Banking Solution provides the state-of-the-art anywhere anytime
banking for our customers. The facility is available at 1012 branches.

Trade Finance : The solution has been implemented, providing efficiency in handling Trade
Finance transactions with Internet access to customers and greatly enhances the bank's services
to Corporate and Commercial Network branches. This new Trade Finance solution,
EXIMBILLS, will be implemented at all domestic branches as well as at Foreign offices engaged
in trade finance business during the year.
17
WAN : The bank has set up a Wide Area Network, known as SBI connect, which provides
connectivity to 4819 branches/offices of SBI Group across 385 cities as at 31st March 2008. This
network provides across the board benefits by providing nationwide connectivity for its business
applications

ASSOCIATE BANKS

State Bank of India has the following seven Associate Banks (ABs) with controlling interest
ranging from 75% to 100%.

1. State Bank of Bikaner and Jaipur (SBBJ)
2. State Bank of Hyderabad (SBH)
3. State Bank of Indore (SBIr)
4. State Bank of Mysore (SBM)
5. State Bank of Patiala (SBP)
6. State Bank of Saurashtra (SBS)
7. State Bank of Travancore (SBT)






18
MISSION
To retain the Banks Position as the Premier Indian Financial Services Group, with world class
standards and significant Global business, committed to excellence in customer, shareholder and
employee satisfaction and to play a leading role in the expanding and diversifying financial
services sector while continuing emphasis, on its development banking role.

DR. KALAM TALKS ABOUT SBI PLAN AND MISSON

EW DELHI : President A.P.J. Abdul Kalam on Tuesday chalked out a seven-point action plan
for the State Bank of India (SBI) while urging the country's premier bank to create a Rs. 5,000-
crore venture capital fund and hike lending to the farm sector.

In his address at the SBI's Bicentennial Celebrations here, Mr. Kalam noted that within the next
three years, the bank should raise the credit to the farm and agro-processing sector from 10 to 20
per cent of its total loan disbursal.

Agricultural growth, he said, was lagging behind while sectors such as manufacturing and
services were showing robust increases. A higher credit disbursal, he said, was essential to hike
farm growth to over four per cent as it was a vital requirement for increasing the overall Gross
Domestic Product growth to 10 per cent. Unveiling his plan, Mr. Kalam asked the SBI to allocate
Rs. 5,000 crores as venture capital from 2007-08 for the purposes of funding innovative
scientists and technologists for speedier societal transformation. This would include the
development of ICT products, software development and software services.

19
The President also advised the bank to create and nurture five rural development projects, on the
lines of the bio-fuel project and seaweed project, as it had the potential to provide employment to
50 lakh persons in the rural areas at the least.

Mr. Kalam also asked the SBI to adopt and innovatively fund at least one lakh sick units in the
small-scale sector to infuse the latest technology and turn them into profitable ventures. Another
sector with great potential, Mr. Kalam said, was medical tourism in which the bank could extend
funds at competitive interest rates for setting up corporate hospitals which would also serve the
rural areas. Likewise, yet another sector for the bank's participation, he said, was infrastructure
development, including provision of 50 million quality houses with basic infrastructure in rural
areas in association with state and Central entities.
Turning to the plight of villagers caught in the ``vicious cycle of borrowing,'' Mr. Kalam asked
the SBI to adopt a ``villager-friendly'' banking system to free them from the clutches of money-
lenders.
Mr. Kalam also lamented that hassle-free loans were being extended by the SBI to students of
only the best engineering colleges, medical colleges and business schools. ``I would request the
SBI to examine the possibility of providing loans to students who would like to pursue science
and commerce as a career," he said.
Besides, ways should be found to fund the education of those meritorious students who could not
get admission to top engineering, medical and B-schools owing to stringent competition, Mr.
Kalam said.




20
AWARDS & RECOGNITIONS























21
SBI has bagged
the awards for
Most Preferred
Bank and Most
preferred brand
for home Loan in
CNBC Awaaz
Consumer
Awards in
August 2007

SBI is placed at
70
th
in Top 1000
Banks Survey by
Banker
Magazine, July
2007, (up from
107 last year)


SBI ranked 6
th

in the Economics
Times Market
Cap List, (up
from 50 last year)
Today,
SBI/SBI
CAP is the No.1
syndicator of
domestic debt in
Asia Pacific
REGION.

No.1 in mergers
& Acquisition
Deals (31
Deals of US $
19.8bn)
.

The only
Indian Bank to
find a place in
the Fortune
Global 500
List


























22
SBI is No 1
provider of
AGRI Finance
and No. 1 in
Credit Linking
of Rs 9.35 lacs
SHGS


SBI is market
Leader in
financing SSIs
with a market
share of 29%


Readers digest
May 07 Golden
Award for being
among the two
most trusted
banks in India


Up gradation of
ratings by citi
group/ Morgan
Stanley
Moodyss S&P


3
rd
in the
Economic Times
brand Equity
Ranking Top 50
most trusted
service brands in
the service
sector


Business
Standard has
Awarded the
Best Banker of
the Year Award
to Shri O.P.Bhatt
for his initiative
to reenergize the
Bank






















23

CNN IBN network
18 has selected shri.
O.P.Bhatt as Indian
of the Year
Business 2007 for
showing how a public
sector behemoth can
flex its muscle in the
ferociously
competitive Banking
sector



Asian centre for
corporate Governance &
Sustainability and Indian
Merchants Chamber has
awarded the
Transformational Leader
Award 2007 to Shri
O.P.Bhatt for leadership,
charisma, inspiration and
intellectual stimulation for
the entire SBI team

STRUCTURE OF ORGANISATION

CHAIRMAN










24
DMD & CCO
DMD & CFO
DMD & CDO
DMD CORPORATE
STRATEGY & NEW BUSINESS
DMD (IT)
CHIF ECONOMIC ADVISOR
CVO
DMD RURAL & AGRI BUSINESS
GROUP
MD & GE
(CB)
MD & GE (NB) DMD & GE
(TRESASURY &
MARKETS
DMD & GE
(ASSOCIATES &
SUBSIDIARIES
DMD (I & MA)
(Located at Hyderabad)
DMD: DEPUTY MANAGING CCO: CHIEF CORPORATE DIRECTOR
OFFICER
CFO: CHIEF FINANE CB: CORE BANKING
OFFICER
NB: NON BANKING IB: INTERNATIONAL BANKING


MAJOR COMPETITOR

State bank of India has been facing great rivalry and major competition with other public sector
banks and some of private commercial banks. State bank of India has many banks as art rival.
Some of its art rival.

List of major competitors of SBI

I. ICICI Bank
II. Bank of Baroda
III. Canara Bank
IV. Punjab National Bank
V. Bank of India
VI. Union Bank of India
VII. Central Bank of India
VIII. HDFC Bank
IX. Oriental Bank of Commerce.
Here especially some of the public sector and private sector banks are giving hardcore
competition to the state bank of India. So let us have some of the best banks which is also
mentioned above and mentioned below in detail.
25

ICICI BANK
ICICI bank stands for Industrial Credit and Investment Corporation of India. This ICICI
bank is one of the heavyweight banks of private sector of India. It is providing the core
competition to the state bank of India. Especially in lending money, Investment. But in
profit making state bank of India is standing ahead. And when and where social
responsibility of concern state bank of India is heading high than any other banks in India


HDFC BANK

HDFC stands for Housing Development and Finance Corporation ltd. This is also one of
the leading banks of India in private sector. This bank is also providing hardcore
competition to all the banks as well as state bank of India But state bank of India is ahead
in banking India. So HDFC bank has to work hard to reach at the milestone achieved by
state bank of India.


BANK OF BARODA

Bank of Baroda is also one of the leading public sector banks in India. Bank of Baroda is
known as BOB. This PSU bank is also providing the tough competition to all other banks
in India. The BOB bank is very renowned banks of India today. It is very changed and
very professionally working public sector banks BOB has got professional in recent time
so. It has to work very hard to achieve position and reputation which are achieved by
State Sank of India.



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PRODUCTS OF SBI
TYPES OF DEPOSITS

SAVING DEPOSIT
Everyone wants to save for something in the future and also that everyone wants their
savings to be safe and accessible anytime, anyplace to help meet their needs. So State
bank of India brings to the Saving Account, which helps to plan and save for future
financial requirements. This is a normal, General Saving Bank A/c which all the banks
offer. However, following are the below mentioned benefits attached
With this A/c.

Benefits of Saving Account:
1) In this A/c bank offers Free ATM cum Debit Card which will allow us to access the
widest network of across the country to withdraw cash, enquiry about balance etc.
2) Transact at convenience, saving time and cost through the largest distribution network
in India of more than thousands of ATMs or through bank of India internet banking.
3) Free personalized cheque book for that customer has to maintain some balance.
4) Account holders are also offered free phone banking facility with this account. By
which they can also operate certain functions through their phone.
5) The Account holders are also offered free Net Banking facility with the account, by
which they can operate their account through their computers. This has made banking
complete easy and hassle free.



FIXED DEPOSIT
The term "fixed" in fixed deposits denotes the period of maturity or tenor. Fixed Deposits,
therefore, presupposes a certain length of time for which the depositor decides to keep the money
with the bank and the rate of interest payable to the depositor is decided by this tenor.
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The rate of interest differs from bank to bank .This, however, does not mean that the depositor
loses all his rights over the money for the duration of the tenor decided. The deposits can be
withdrawn before the period is over. However, the amount of interest payable to the depositor, in
such cases goes down (usually 1% to 2% less than the original rate). Moreover, as per RBI
regulations there will be no interest paid for any premature withdrawals for the period 15 days to
29 or 15 to 45 days as the case may be. Other than banks, there are non-banking financial
companies and companies who float schemes from time to time for garnering deposits from the
public. In the recent past, however, many such schemes have gone bust and it is very essential to
look out for danger signals before putting all your eggs in one basket. Mode of calculation of
Interest on Short Deposits and Fixed Deposits for periods less than 12 months.

a. Short Deposits (On deposits repayable within six months)
In case of short deposit Interest rate is paid for the actual number of days on the basis of
365 days in a year.
b. Fixed Deposits (On Deposits repayable after six months)
o Interest is calculated for the completed months.
o If the terminal month is incomplete- the actual number of days on the basis of
365 days in a year interest is calculated.



RECURRING DEPOSIT
Recurring deposit account is generally opened for a purpose to be served at a future date.
Generally opened to finance pre-planned future purposes like, wedding expenses of daughter,
purchase of costly items like land, luxury car, refrigerator or air conditioner, etc.
Recurring deposit account is opened by those who want to save regularly for a certain period of
time and earn a higher interest rate. In recurring deposit account certain fixed amount is accepted
every month for a specified period and the total amount is repaid with interest at the end of the
particular fixed period. The bank provides loan facility to recurring deposit holders up to 75% of
the amount standing to the credit of the account holder.
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Under this deposit any person can open an account (Individuals, joint accounts including minors
also). Depositor also gets the facility of nomination. Minimum amount of monthly installment is
Rs. 1000/- and maximum amount of monthly installment is Rs. 10,000/- . Minimum recurring
period is12 months and Maximum period is10 years. (In multiples of 3 months only). Rate of
interest is applicable as per period for which the A/c is opened. Maturity value is calculated by
the System, depending on the amount of flexi installments.

CURRENT ACCOUNT
Current account can be opened in any bank it can be co-operative bank or commercial bank or in
nationalized banks. Current account, amount can be deposited and withdrawn at any time
without giving any notice. It is also suitable for making payments to creditors by using
cheque. Cheque received from customers can be deposited in this account for collection.


Benefits to the current account holder:

The main objective of current bank account is to enable the businessmen to conduct their
business transactions smoothly.
There is no restriction on the number and amount of deposits. There is also no restriction
on the withdrawals.
Generally bank does not pay any interest on current account. Nowadays, some banks do
pay interest on current accounts.
Current account is of continuing nature and as such there is no fixed period.
The businessmen can make direct payment to their creditors with the help of cheques.
The bank collects money on behalf of its customers and credits the same to their
accounts.
Current account enables the account holder to obtain overdraft facility.
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TYPES OF CARDS

DEBIT CARD

State Bank of India provides debit card facility to its customers. Cardholders have the choice of
applying for State Bank of India Star links Debit cum ATM card or SBI Global Debit cum ATM
card (MasterCard). SBI Global debit cum ATM card is presently available to accountholders in
Networked branches only.
Debit cum ATM card can be used to book tickets on IRCTC website (Transaction
charges Rs10 in addition to ticket payment and IRCTC charges).
Debit cum ATM card is also accepted on billers / merchants websites to make online
payments under the Debit card option, if "SBI Debit cum ATM card is displayed as one
of the payment option. The person who have Satisfactory running SB, Current, Overdraft
Accounts Operated upon singly (In Jt. Accounts Anyone to operate).In case
of STUDENT, who have completed 15 years of age and operate their SB A/c. themselves
(not through guardians). In this case, the card is usable only in ATMs, to avail the debit
card facility balance for saving a/c is 500and for current ac it is 5000.


Facilities offered to customers
Balance enquiry
Deposit of Cash & Cheques at ATM with depositories ATMs)
Star Sandesh (SMS) is sent free of charges on all Debit transactions through ATM.
Transfer of balances among the accounts attached to the Card (only on site ATM).
Mini statement of last 5 transactions for any a/c. attached to the





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CREDIT CARD

Corporate Cards are All Credit Cards can be issued as Corporate (Companies, Partnership &
proprietorship firms and Regd. institutions/Societies) having net profit in two years of the
preceding three financial years, and having banking accounts with them. Limits: Overall Credit
(spending) limit to Corporate shall not exceed 20% of its net profit as per latest financial
statement, within which sub limits shall be assigned to its Executive / Employees as per
corporate request. No add on cards will be allowed to Executives / Employees on Corporate
Cards No. of Cards per Corporate: any number of cards can be issued to Executives/Employees
as per request. Each card shall be subject Annual fee/charges.

Exceptional Convenience and financial benefits no other Cards offer
Choice of Charge or Credit
Choice of branch billing (auto debit) or direct Cardholder will have the choice of paying
the bills directly or through a debit to his designated charge account with any of our
branches.

Mode of Billing and dispatch
Billing is done monthly and the bills (Credit Card statement) are mailed to the
Cardholders by ordinary post
.
Lowest Service Charges
Revolving Credit at preferential rate of 1.7% per month (APR: 22.45 % per annum on
daily balances) on cards where minimum payment is made by due date is provided which
is one of the lowest in industry.

No Entrance Fee
Our credit cards are issued without any entrance fee.


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Lowest Membership Fee
All the exceptional features are available at a nominal membership fee, which is lowest in
the industry. We do not believe in charging for services not availed

Interest Free Period:
An interest free period ranging from 21 to 51 days is available depending upon the date
of purchase and date of billing.

Freedom of withdrawing cash at branches
Cardholder can withdraw Cash against limits prescribed on their cards from any of the
2500 plus branches spread throughout the country
.
Through ATMs
people get the privilege to access 9000 ATMs in India and over 8.1 laky ATMs across the
Globe where VISA/MasterCard Cards are accepted round the clock. Can also with draw
cash at all BOI/MasterCard/VISA/Cash tree/Bancs ATMs.

Easy Pay Scheme
Cardholder can convert his purchases above Rs.5, 000/- by joining this scheme and pay
the outstanding in Equated monthly instalments of 24/36 instalments at a rate of interest
of 1.5% monthly. For details refer Users guide available on request
.
Add-On cards
Cardholder has the freedom to apply for two add-on members on his Card. Presently add-
ons are allowed for cardholder's spouse, children, brothers, sisters and parents at lower
membership fees.




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LOAN PRODUCTS
HOUSING LOAN:
Home is where the heart is! At SBI, we understand this better than most the toil and sweat that
goes into building/ buying a house and the subsequent pride and joy of owning one. This is why
our Housing loan schemes are designed to make it simple for you to make a choice at least as far
as financing goes!

Eligibility
Minimum age 21 years as on the date of sanction
Steady source of income
Loan Amount
Applicant/ any one of the applicants are aged over 21 years and upto 45 years 60 times Net
Monthly
Income (NMI) or 5 times Net Annual Income (NAI), subject to aggregate repayment obligations not
Exceeding 57.50% of NMI/ NAI

Applicant(s) aged over 45 years of age 48 times NMI or 4 times NAI, subject to aggregate
repayment obligations not exceeding 50%of NMI/ NAI




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HOUSING LOAN INTEREST RATES:
Interest rates
Floating interest rates (linked to State Bank Advance Rate SBAR):
(SBAR: 12.75%)
Tenure Rate of Interest (p.a.)
Upto 5 years 2.00% below SBAR Minimum 10.75%
Above 5 and upto 10 years 1.50% below SBAR Minimum 11.25%
Above 10 and upto 15 years 1.50% below SBAR Minimum 11.25%
Above 15 and upto 20 years 1.00% below SBAR Minimum 11.75%
Tenure Rate of Interest (p.a.)*
Upto 5 years 11.50%
Above 5 and upto 10 years 11.75%




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Fixed interest rates:
CAR LOAN
Move ahead in life with SBI Car Loans! Low interest rates, easy repayment options, total
transparency, Low processing charges, finance to include vehicle registration charges, insurance and one
time road tax. Just step in to any of our branches (more than 6000) that offer Car Loans or our Personal
Banking Branches and give wheels to your desire!

Eligibility
To avail an SBI Car Loan, you should be
Individual between the age of 21-65 years of age.
A Permanent employee of State/Central Government, Public Sector Undertaking,
Private company or a reputed establishment
A Professionals or self-employed individual who is an income tax assesses or
A Person engaged in agriculture and allied activities.
Net Annual Income Rs. 75,000/- and above.

Salient Features
Loan Amount
There is no upper limit for the amount of a car loan. It is limited only by your repaying capacity. A
maximum loan amount of 2.5 times the net annual income can be sanctioned. If married, your spouses
income could also be considered provided the spouse guarantees the loan The loan amount includes
finance for one-time road tax, registration and insurance!


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Margin
New/used vehicles 10-15% when loan is upto Rs.6 lacs
20-30% when loan exceeds Rs.6 lacs
Repayment
You enjoy the longest repayment period in the industry with us. Repayment period for new vehicles:
Maximum of 84 months
Repayment period for old vehicles: Up to 84 months from the date of original purchase of the vehicle.


EDUCATION LOAN:
A term loan granted to Indian Nationals for pursuing higher education in India or abroad where
admission
has been secured.
Eligible Courses
All courses having employment prospects are eligible.
Graduation courses/ Post graduation courses/ Professional courses
Other courses approved by UGC/Government/AICTE etc.
Amount of Loan
For studies in India, maximum Rs. 10 lacs
Studies abroad, maximum Rs. 20 lacs
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Interest Rate
For loans upto Rs. 4 lakh 10.50% p.a.
For loans above Rs. 4 lakh 11.50% p.a.

Repayment Tenure
Repayment will commence one year after completion of course or 6 months after securing a job,
whichever is earlier.
Place of Study Loan Amount
Repayment Period
in Years
In India
Up to Rs. 7.5 lacs 5-7
Above Rs. 7.5 lacs 5-10
Abroad
Up to Rs. 15 lacs 5-7
Above Rs. 15 lacs 5-10







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Security

Amount Studies In India Studies Abroad
Upto Rs. 4 lacs No Security No Security
Above Rs. 4 lacs to Rs. 7.50 lacs
Third Party
Guarantee
Third Party Guarantee
Above Rs. 7.50 lacs to Rs. 10 lacs(India)/
Rs. 15 lacs(Abroad)
Tangible Collateral
security for full
value of loan
Tangible Collateral security of suitable
value of loan or third party guarantee
Rs 15 lacs to Rs. 20 lacs ___
Tangible Collateral security for full
value of loan












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S.W.O.T Analysis





S.W.O.T Analysis

S Strength
W Weakness
O Opportunity
T Threat

Strength
Years of Experience..Century
Experienced Employee
Large Network
Huge ATM Network
Government Support
Safety and Security of Money
Transparency in Charges
Large income from Loan interest
Less interest rate of loan with low charges

Weakness
Lake of Young Employee
Rigid work culture
Physical environment & Ambience
Excessive Documentation
Bureaucracy
Less knowledgeable employee
Less control on employee
Poor technology

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Opportunity
Constant fear in the minds of customers towards private bank.
Fraud and cheating with customer from private banking.
Dissatisfy from private banking.
So much hidden charges of private banks.
Nationalizes bank more reliable and trustworthy.

Threats

shifting customers preference towards private banks.
Private bank providing more facilities at lower charges.
Quick Dynamic employees and greater technological product.
oung stare are attract towards private bank because of speedy and upgrade technology.


FUTURE PLANS

SBI has set for itself an ambitious target of credit linking 1 million SHGs up to March 2008.
The Bank has started to leverage our vast SHG network for various services beyond credit
delivery.

FINANCIAL INCLUSION FUTURES PROSPECT

Scheme for Financial Inclusion by extension of banking services through Business Facilitators/
Business Correspondents
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Objective
To extend Micro Finance services for uplifting the poor.
To extend banking facilities in untapped / unbanked areas through the use of existing
branch network and new technology in combination with outsourcing.

2. Eligible entities
a) Business Facilitator Model:
NGOs
Farmers Clubs
Functional cooperatives
Community based organizations
I.T. enabled rural outlets of corporate entities
Well functioning Panchayats
Rural Multipurpose Kiosks / Village Knowledge Centers
Agri Clinics / Agri Business Centers
Krishi Vigyan Kendras
KVIC / KVIB units
Post Offices
Insurance agents
Social organizations
Any other entity, as may be specified by RBI from time to time.

However, it would be desirable to identify such entities which have presence and activity
throughout the Circle/State.

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b) Business Correspondent Model:

NGOs / MFIs set up under the Indian Societies / Trust Acts
Societies registered under Mutually Aided Cooperative Societies(MACS) Act or the
Cooperative Societies Acts of States
Section 25 companies
Post Offices


3. Scope of activities
a) Business Facilitator Model:
The scope of activities to be undertaken by the Business Facilitator will include:
Identification of potential customers and activities
Collection and preliminary processing of loan applications / account opening forms
including verification of primary information / data
Processing and submission of loan applications / account opening forms to the Bank
Cross-selling of our other financial products (Insurance, etc.)
Post-sanction monitoring and follow-up for recovery
Promoting and nurturing Self Help Groups (SHGs) / Joint Liability Groups (JLGs)
Creating awareness about savings and other products and education and advice on
managing money and debt counseling



42
b) Business Correspondent Model:

In addition to the activities listed under the Business Facilitators Model, the scope of activities to
be undertaken by the Business Correspondents will include:

Opening of deposit accounts.
Collection and payment of small value deposits and withdrawals (not exceeding
Rs.10,000/- in each case).
Disbursal of small value loans (not exceeding Rs.10,000/-) and obtaining prescribed
documents.
Recovery of principal / collection of interest.
Furnishing of mini account statements and account information.
Selling insurance / mutual fund products / pension products / any other third party
product.
Receipt and delivery of small value remittances / other payment instruments (not
exceeding Rs.10,000/-).
Payment / Receipt in respect of e-governance activities
Railway ticketing and
Any other service on behalf of the Bank, duly authorized by the appropriate authority






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FUTURE STRATEGIES:

1) New Businesses:

The Corporate strategy and New Business Group has been created to focus on emerging
opportunities. The Bank plans to enter into the areas of merchant acquisition, payment
solutions, Private Equity, Infrastructure Fund, Venture Capital, Pension Funds
Management, General Insurance and Financial Planning & Wealth Management.


2) Rural Business:

Plan to credit-link 2.63 lac SHGs thus surpassing our mission of credit-
linking 1 million SHGs by March 2008.
Tie-up with around 20,000 internet kiosks during next 24 months.
Under Financial Inclusion initiatives, to cover 1 lac villages in 24 months.
plan to issue 10 million SBI Tiny Cards by March 2009.
Developing alternate delivery channel through:
Business Facilitators


3) Corporate Accounts Group (CAG):

CAG will be focusing more on the fee-based income in future.
Institutional Accounts Group formed for focusing on Banks and Financial
Institutions.

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CAG to offer more technology-supported products to meet the market
expectations and offer total range of products and services to our corporate
customers, under one roof.


4) Treasury Group:
Bank in its pursuit to provide better returns to its customers and shareholders is in the process of
launching derivative embedded products to help customers utilise the new RBI dispensation to
manage their risks and earnings more effectively.















45



CONCLUSION













CONCLUSION


It shows the various challenges and opportunities of bank like rural market, transparency,
customer expectations, management of risks, and growth in banking sector, human factor, global
banking, environmental concern, social, ethical issues, and employee and customer retentions.
Banks are striving to combat the competition. The competition from global banks and
technological innovation has compelled the banks to re-plan their policies and strategies.














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BIBLIOGRAPHY














BIBLIOGRAPHY

Web Sites:-

www.sbi.co.in
www.rbi.org.in
www.google.com

Books:-
NGB Business bulletin
Indian Financial System











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