State Bank of India (SBI) (
LSE:
SBID) is the largest
bank in
India. If one measures by the number of branch offices and employees, SBI is the largest bank in the world. Established in
1806 as
Bank of Calcutta, it is the oldest commercial bank in the
Indian subcontinent. SBI provides various domestic, international and
NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The government nationalized the bank in
1955, with the
Reserve Bank of India taking a 60% ownership stake. In recent years the bank has focused on three priorities, 1), reducing its huge staff through
Golden handshake schemes known as the Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private sector, 2), computerizing its operations and 3), changing the attitude of its employees (through an ambitious programme aptly named 'Parivartan' which means change) as a large number of employees are very rude to customers.
Roots The State Bank of India traces its roots to the first decade of
19th century, when the
Bank of Calcutta, later renamed the
Bank of Bengal, was established on
2 June 1806. The government amalgamated Bank of Bengal and two other Presidency banks, namely, the
Bank of Bombay (incorporated on
15 April 1840) and the
Bank of Madras on
27 January 1921, and named the reorganized banking entity the
Imperial Bank of India. All these Presidency banks had been incorporated as
joint stock companies, and were the result of the
royal charters. The Imperial Bank of India continued as a joint stock company. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as India's central bank, at least in terms of issuing the currency. The State Bank of India Act 1955, enacted by the
Parliament of India, authorized the
Reserve Bank of India, which is the
central banking organization of India, to acquire a controlling interest in the Imperial Bank of India, which was renamed the State Bank of India on
30 April 1955.
Timeline
Offices of the Bank of Bengal
- June 2, 1806: The Bank of Calcutta established.
- January 2, 1809: This became the Bank of Bengal.
- April 15, 1840: Bank of Bombay established.
- July 1, 1843: Bank of Madras established.
- 1861: Paper Currency Act passed.
- January 27, 1921: all three banks amalgamated to form Imperial Bank of India.
- July 1, 1955: State Bank of India formed; becomes the first Indian bank to be nationalised.
- 1959: State Bank of India (Subsidiary Banks) Act passed, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries.
- 1980s When Bank of Cochin in Kerala faced a financial crisis, the government merged it with State Bank of India.
- June 29, 2007: The Government of India today acquired the entire Reserve Bank of India (RBI) shareholding in State Bank of India (SBI), consisting of over 314 million equity shares at a total amount of over 355 billion rupees.
Associate banks
There are seven other associate banks that fall under SBI. They all use the "State Bank of" name followed by the regional headquarters' name. These were originally banks belonging to
princely states before the government nationalized them in
1959. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks with the State Bank of India to expand its rural outreach. The State Bank group refers to the seven associates and the parent bank. All the banks use the same logo of a blue keyhole. Currently, the group is merging all the associate banks into SBI, which will create a "mega bank", and one hopes, streamline operations and unlock value.
Foreign Offices
State Bank of India is present in 32 countries, where it has 84 offices serving the international needs of the bank's foreign customers, and in some cases conducts retail operations. The focus of these offices is India-related business.
Foreign Branches
SBI has branches in these countries:
The Israeli branch
Subsidiaries and Joint Ventures
In addition to the foreign branches above, SBI has these wholly owned subsidiaries and joint ventures:
Growth
Mumbai, India location.
State Bank of India has often acted as guarantor to the
Indian Government, most notably during
Chandra Shekhar's tenure as
Prime Minister of India. With more than 9400 branches and a further 4000+ associate bank branches, the SBI has extensive coverage. Following its arch-rival
ICICI Bank, State Bank of India has electronically networked most of its metropolitan, urban and semi-urban branches under its Core Banking System(CBS), with over 4500 branches being incorporated so far. The bank has the largest
ATM network in the country having more than 5600 ATMs
[1]. The State Bank of India has had steady growth over its history, though the
Harshad Mehta scam in
1992 marred its image. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the
Fortune Global 500 rating and various other rankings. According to the
Forbes 2000 listing it tops all Indian companies.
Fortune Global 500 Ranking - 2007
SBI debuted in the
Fortune Global 500[2] at
498 in 2006. In 2007 it moved up to 495. As per fortune 500-2007 following are the data for SBI in $ million. Revenues 15,119.4. Profits 1,407.3. Assets 187,547.1. Stockholders' Equity 9,786.2
Group companies
- SBI Capital Markets Ltd
- SBI Mutual Fund (A Trust)
- SBI Factors and Commercial Services Ltd
- SBI DFHI Ltd
- SBI Cards and Payment Services Pvt Ltd
- SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)
- SBI Funds Management Pvt Ltd
- SBI Canada
IT Initiatives
According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India launched a project in 2002 to network more than 14,000 domestic and 70 foreign offices and branches. The first and the second phases of the project have already been completed and the third phase is still in progress. As of December
2006, over 10,000 branches have been covered. The new infrastructure serves as the bank's backbone, carrying all applications, such as the
IP telephone network,
ATM network,
Internet banking and internal
e-mail. The new infrastructure has enabled the bank to further grow its
ATM network with plans to add another 3,000 by the end of
2007 raising the total number to 8,600. As of September 20, 2007 SBI has 7236 ATMs.
See also
References
External links
