a project report on history of sbi

8/11/2019 A Project Report on History of Sbi

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A Project Report on

History of State Bank

of India (SBI)


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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


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DECLARATION

I, JINAL KAMLESH MOJIDRA Student of master of commerce, Banking &FinanceSemester-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


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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


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INTRODUCTION


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INTRODUCTION

The word bank it derived from the word bancus or banque that is

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.Generally, banks do the business of money they take

deposits of moneys from client and give loan to the person who has need of

money. But in this age, for the convenience of customer, banks provides some

other services to their customer such as bankers cheque, overdraft, internet

banking, ATM facility, payi ng of bil ls, credit card, telegraphic transfer,

insurance, demat etc.

For a people, it is difficult to keep a very big amount of money in his house

safely. So, people save their money to bank. Bank gives loan to the person who

has need of money and gets higher interest on it than the interest of deposit. Themargin between the interest of loan and interest of deposit 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

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http://www.google.co.in/search?hl=en&oi=definer&q=define:online+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:online+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:investment+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:investment+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:electronic+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:electronic+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:internet+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:internet+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:pc+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:pc+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:e-banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:e-banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:e-banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:pc+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:internet+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:electronic+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:investment+banking&defl=enhttp://www.google.co.in/search?hl=en&oi=definer&q=define:online+banking&defl=en


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HISTORY OF

BANKING


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HISTORY OF BANKING

As early as 2000 B.C. the Babylonians had developed a banking system. There is

evidence to show the temples of Babylon were used as banks. After a period of

time, there was a spread of irreligion, which soon destroyed the public sense of

security in depositing money and valuable in temples. The priests were longer

acting as financial agents. The Romans did minute regulations, as to conduct

private banking and to create confidence in it . Loan banks were also common in

Rome. From these the poor citizens received loans without paying interest,

against security of land for 3 or 4 years.

During the early periods, although private individual mostly did the banking

business, many countries established public banks either for the purpose of

facilitating commerce or to serve the government.

However, upon the revival of civilization, growing necessity forced the issued

in the middle of the 12t h

century and banks were established at Venice and

Genoa. The Bank of Venice established in 1157 is supposed to be the most

ancient bank. Originally, it was not a bank in the modern sense, during simply

an office for the transfer of the public debt.

In India, as early as the Vedic Period, banking, in most crude from existed. Thebooks of Manu contain references regarding deposits, pledges, policy of loans,

and rate of interest. True, the banking in those days largely mint money lending

and they did not know the complicated mechanism of modern banking.

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This is true not only in the case of India but also of other countries. Although,

the business of banking is as old as authentic history, banking institutions have

since than changed in character and content very much. They are developed

from a few simple operations involving the satisfaction of a few individual

wants to the complicated mechanism of modern banking, involving the

satisfaction of capital slowly seeking employment and thus providing the very

life blood of commerce.

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TYPE OF BANKS

Regional Rural Bank (RRB)

Nationalized Bank

State Bank Group

Co-operative Bank

Private Bank

Foreign Bank

RESERVE BANK OF INDIA

The Hilton-young commission, appointed in 1926 has recommended the

necessity of centrally empowered institution to have effective control over

currency and financial transaction in the county. Accordingly, the Government

had then passed Reserve Bank of India Act, 1934 and established the Reserve

Bank of India with effect from 1s t

April 1935. The principal aim behind this was

to organize proper control over the currency management in the interest of

country benefits and to maintain financial stability. With this, the RBI mainly

looks after the following important functions:

To keep effective control over creation of credits and currency supply

To control the Banking transactions of Central and State Governments.

To act as Central administered Authority of all other Banks in the country.

To organize control over Foreign Currency Transaction.

To assist for improvement in financial aspect of the country.

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NATIONALISED BANKS

The Banking Company Act establishes it in July 1969 by nationalization of 14

major banks of India. The sent percent ownership of the bank is of government

of India.

STATE BANK GROUP

The State Bank of India was established underthe 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.

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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.

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ABOUT SBI


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STATE BANK OF INDIA

The origin of the State Bank of Indiagoes 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.

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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.

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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

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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.

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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

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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.

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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 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.

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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.

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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.

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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.

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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 Indiahas 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)

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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.

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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

3rd

in the

Economic Times

brand Equity

Ranking Top 50

most trusted

service brands in

Business

Standard has

Awarded the

Best Banker of

the Year Award

to Shri O.P.Bhatt


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STRUCTURE OF ORGANISATION

CHAIRMAN

24

DMD & CCO

DMD & CFO

DMD & CDODMD 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 &

DMD (I & MA)


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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 hardcorecompetition 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.

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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 inprofit 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. Bywhich 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.

RECURRINGDEPOSIT

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 calculatedby

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. AccountsAnyone 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 age48 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%



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:


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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 Persona

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 AmountRepayment 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 lacsThird Party

GuaranteeThird 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


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S.W.O.TAnalysis

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

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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.

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CONCLUSION


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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


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BIBLIOGRAPHY

Web Sites:-

www.sbi.co.in

www.rbi.org.in

www.google.com

Books:-

NGB Business bulletin

Indian Financial System
http://www.sbi.co.in/http://www.rbi.org.in/http://www.google.com/http://www.google.com/http://www.rbi.org.in/http://www.sbi.co.in/

a project report on history of sbi

Documents