State Bank of India (SBI) is an Indian multinational, public sector banking and financial services company. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. On 01.04.2017, State Bank of India, which is India's large Bank merged five of its Associate Banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank with itself. This is the first ever large scale consolidation in the Indian Banking Industry. With the merger, State Bank of India will enter the league of top 50 global banks with a balance sheet size of ₹41 trillion, 277,000 employees, 500 million customers, and more than 22,500 branches and 58,000 ATMs. SBI's market share will increase to 22 percent from 17 per cent. It has 198 offices in 37 countries; 301 correspondents in 72 countries. The company is ranked 232nd on the Fortune Global 500 list of the world's biggest corporations as of 2016.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding, in 1806, of the Bank of Calcutta, making it the oldest commercial bank in the Indian subcontinent. Bank of Madras merged into the other two "presidency banks" in British India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India, which in turn became the State Bank of India in 1955. Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of India (India's Central Bank) taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India.
State Bank of India is a banking behemoth and has 20% market share in deposits and loans among Indian commercial banks.
History
The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies and were the result of royal charters. These three banks received the exclusive right to issue paper currency till 1861 when, with the Paper Currency Act, the right was taken over by the Government of India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 1 July 1955, the imperial Bank of India became the State Bank of India. In 2008, the Government of India acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and operatonal takeover between September 1959 and October 1960, which made eight state banks associates of SBI. This acquisition was in tune with the first Five Year Plan, which prioritised the development of rural India. The government integrated these banks into the State Bank of India system to expand its rural outreach. In 1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
The new logo of the SBI was introduced on 1 October 1971 and was designed by Shekhar Kammat at National Institute of Design. Though it may seem that the logo might have been greatly inspired from the Kankaria Lake, Ahmedabad. in Gujarat, Mr. Kamat had mentioned that it was mainly the shape of the cash counters at that time that inspired him and not the lake in later interviews. .
There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing the number of associate state banks from seven to six. On 19 June 2009, the SBI board approved the absorption of State Bank of Indore. 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 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of branches. Also, following the acquisition, SBI's total assets will approach ₹10 trillion. The total assets of SBI and the State Bank of Indore were ₹9,981,190 million as of 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.
On 7 October 2014, Arundhati Bhattacharya became the first woman to be appointed Chairman of the bank. Mrs. Bhattacharya received an extension of two years of service to merge into SBI the five remaining associated banks.
The five associate banks (see below), along with Bharatiya Mahila Bank, merged with SBI on 31 March 2017.
Operations
SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout India.
Domestic presence
SBI has 18,354 branches in India. In the financial year 2012â€"13, its revenue was ₹2.005 trillion (US$31 billion), out of which domestic operations contributed to 95.35% of revenue. Similarly, domestic operations contributed to 88.37% of total profits for the same financial year.
Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government in August 2014, SBI held 11,300 camps and opened over 3 million accounts by September, which included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas.
International presence
As of 2014â€"15, the bank had 191 overseas offices spread over 36 countries having the largest presence in foreign markets among Indian banks. It has branches in Singapore, 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 and Bahrain, and representative offices in Myanmar, Bhutan and Cape Town.
SBI has 7 retail banking branches in Singapore.
The Canadian subsidiary SBI Canada Bank (previously State Bank of India (Canada)) also dates to 1982. It has six branches, four in the Toronto area and two in the Vancouver area.
SBI operates several foreign subsidiaries or affiliates.
In 1989, SBI established an offshore bank: State Bank of India International (Mauritius) Ltd in Mauritius. SBI International (Mauritius) Ltd amalgamated with The Indian Ocean International Bank, which has been doing retail banking business in Mauritius since 1979 with the new name, SBI (Mauritius) Ltd. Today, SBI (Mauritius) Ltd is having fully integrated 14 branches- 13 Retail Branches covering major cities and town of Mauritius, including Rodrigues, and 1 Global Business Branch at Ebene in Mauritius. Apart from Branch Banking, customers also have the convenience of 24x7 ATM Banking at 18 ATMs across the country. Bank also has a 24x7 robust Internet Banking Channel enabling customers to work from their homes and offices.
SBI Sri Lanka now has three branches located in Colombo, Kandy and Jaffna. The Jaffna branch was opened on 9 September 2013. SBI Sri Lanka, the oldest bank in Sri Lanka, celebrated its 150th year in Sri Lanka on 1 July 2014.
In 1982, the bank established a subsidiary, State Bank of India, which now has ten branchesâ€"nine 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.
In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indoâ€"Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.
In Nepal, SBI owns 49% of SBI Nepal (State Bank in Nepal) share with Nepal Government owing the rest and SBI NEPAL has branches throughout the country in each and every city as banking has become the major part of daily life for Nepalese people.
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.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005.
In January 2016, SBI opened its first branch in Seoul, South Korea following the continuous and significant increase in trade due to the Comprehensive Economic Partnership Agreement signed between New Delhi and Seoul in 2009.
Associate banks
SBI acquired the control of seven associate banks in 1960. They were the seven regional banks of former Indian princely states, all of them which were renamed with the prefix 'State Bank'. These seven banks were State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Travancore (SBT), State Bank of Saurashtra (SBS) and State Bank of Indore (SBI - Indore). All these banks used the same logo as its parent bank.
The plans for making SBI a mega bank with trillion dollar business by merging associate banks started in 2008, and in September the same year, SBS merged with SBI. The very next year, SBI-Indore also merged. In the same year, another subsidiary named Bharatiya Mahila Bank was formed. The negotiations for merging of 6 associate banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore and Bharatiya Mahila Bank) by acquire their businesses including assets and liabilities with SBI started in 2016. The merger of these six subsidiaries was approved by Union Cabinet on 15 June 2016. The State Bank of India and all its associate banks use the same blue keyhole logo. The State Bank of India wordmark usually has one standard typeface, but also utilises other typefaces.
On 15 February 2017, the Union Cabinet approved the merger of five associate banks with SBI.
The State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, and Bharatiya Mahila Bank were merged with State Bank of India with effect from 1 April 2017.
Non-banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:
- SBI Capital Markets Ltd
- SBI Funds Management Pvt Ltd
- SBI Factors & Commercial Services Pvt Ltd
- SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
- SBI DFHI Ltd
- SBI Life Insurance Company Limited
- SBI General Insurance
In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of the remaining capital), to form a joint venture life insurance company named SBI Life Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was founded with its headquarters in Mumbai.
Other SBI service points
As of 31 March 2016,SBI has 49,577 ATMs & SBI group (including associate banks) has 58,541 ATMs.
As on 20 January 2017, Government of India held around 62.22% equity shares in SBI. Life Insurance Corporation of India is the largest non-promoter shareholder in the company with 11.27% shareholding.
The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, and the National Stock Exchange of India, where it is a constituent of the CNX Nifty.
Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.
Employees
SBI is one of the largest employers in the country having 222,033 employees as on 31 March 2014, out of which there were 45,132 female employees (20%) and 2,610 (1%) employees with disabilities. On the same date, SBI had 42,744 Schedule Caste (19%) and 17,243 Schedule Tribe (8%) employees. The percentage of Officers, Assistants and Sub-staff was 36%, 46% and 18% respectively on the same date Hiring drive: 1,776 Assistants and 1,394 Officers joined the Bank in FY 2013-14, for expansion of the branch network and to mitigate staff shortage, particularly at rural and semi-urban branches. Staff productivity: As per its Annual Report for FY 2013-14, each employee contributed net profit of INR 485,000.
Recent awards and recognition
- SBI was ranked as the top bank in India based on tier 1 capital by The Banker magazine in a 2014 ranking.
- SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest corporations for the year 2016.
- SBI was named the 29th most reputed company in the world according to Forbes 2009 rankings
- SBI was 50th Most Trusted brand in India as per the Brand Trust Report 2013, an annual study conducted by Trust Research Advisory, a brand analytics company and subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th Most Trusted Brand in India.
Major competitors
Some of the major competitors for SBI in the banking sector are large other public sector banks Punjab National Bank,Bank of Baroda, Canara Bank, Bank of India. And large private sector banks ICICI Bank, HDFC Bank, Axis Bank, IndusInd Bank. And However, in terms of average. market share, SBI is by far the largest player in the market.
See also
- List of largest banks
- John Mathai
References
External links
- Official website