DEPARTMENT OF BCOM BANKING & INSURANCE

SUBJECT: INDIAN BANKING SYSTEM

TOPIC: UNIT II – STATE BANK OF INDIA
STAFF IN CHARGE: Dr.R.MAHARAJOTHI PRIYA
Associate Professor & Head
STATE BANK OF INDIA
UNIT - 2
 ▪ The State Bank of India (SBI Bank) was
established in 1806, in Kolkata. Three
years after that, it acquired its charter and
Brief History was re-designed as Bank of Bengal in
1809. It was the very first joint-stock bank
of India, which the Bengal Government
sponsored.
 ▪ The State Bank of India is an Indian
multinational, public sector banking and
financial services statutory body. It is a
government corporation statutory body
Brief History headquartered in Mumbai, Maharashtra.
SBI is ranked as 216th in the Fortune
Global 500 list of the world's biggest
corporations of 2018.
 ▪ The bank descends from the Bank of Calcutta,
founded in 1806, via the Imperial Bank of India,
making it the oldest commercial bank in
the Indian subcontinent. The Bank of
Madras merged into the other two "presidency
banks" in British India, the Bank of Calcutta and
the Bank of Bombay, to form the Imperial Bank of
Brief History India, which in turn became the State Bank of
India in 1955.
▪ The Government of Indiatook control of the
Imperial Bank of India in 1955, with Reserve Bank
of India (India's central bank) taking a 60% stake,
renaming it the State Bank of India.
MISSION &
VISION
 Chairman
Shri Rajnish
Kumar
Shri Chandan
Sinha
Director
 ▪ The State Bank of India has been
established to operate on the normal
commercial principles, with the only
difference that, unlike other commercial
banks in the country, it takes into
Objectives consideration and responds in a
progressively liberal manner the financial
requirements of cooperative institutions
and small scale industries, particularly in
the rural areas of the country.
 ▪ (i) To act in accordance with the
broad economic policies of the
government;
▪ (ii) To encourage and mobilise
savings by opening branches in
Main objectives rural and semi-urban areas and to
promote rural credit;
▪ (iii)To establish government
partnership in the provision of
cooperative credit;
 ▪ (iv) To extend financial help for the
establishment of licensed
warehouses and cooperative
marketing societies;

Main objectives ▪ (v) To provide financial help to the

small scale and cottage industries;
▪ (vi) To provide remittance facilities
to the banking institutions.
 ▪ It acts as the government’s bank, i.e., it
collects money and makes payments on
behalf of the government and manages
public debt.
▪ (ii) It acts as the bankers’ bank. It receives
deposits from and gives loans to
commercial banks.
Main functions
▪ It also acts as the clearing house for the
commercial banks, rediscounts the bills of
exchange of the commercial banks and
provides remittance facilities to the
commercial banks.
 ▪ It receives deposits from the public.
▪ It gives loans and advances against
Ordinary eligible securities
Banking ▪ It invests its surplus funds in government
Functions securities, railway securities and
securities of corporations and treasury
bills.
 ▪ It buys and sells gold and silver.
▪ It acts as agent of cooperative banks.
Other Functions ▪ It draws bills of exchange and grants
letters of credit payable out of India.
 ▪ i. Capital: The state Bank of India has an authorised
capital of Rs. 20 crore
▪ The shares of the State Bank are held by the Reserve
Bank, insurance companies and the general public
Organisation of ▪ Management: under the control of a Central Board of
Directors consisting of 20 members.
State Bank of
▪ Subsidiary Banks: Through the State Bank of India
India (Subsidiary Banks) Act, 1959, major state- associated
banks were converted into subsidiary banks of State
Bank of India.
 ▪ (a) The State Bank of Bikaner and Jaipur;
▪ (b) The State Bank of Hyderabad;

At present, ▪ (c) The State Bank of Mysore;

▪ (d) The State Bank of Patiala;
there are seven
▪ (e) The State Bank of Saurashtra;
subsidiary banks ▪ (f) The State Bank of Travancore; and
▪ (g) The State Bank of Indore.
 ▪ Deposit MobilisationThere has been an increasing
trend with regard to mobilisation of deposits by the
Achievements of State Bank of India
State Bank of ▪ Credit Expansion: The progress in the field of credit
India: expansion has also been considerable over the years

(A) General ▪ Branch Expansion: The number of branches of the

State Bank of India has also grown remarkably since its
Progress: establishment.
 ▪ India’s largest Bank State Bank of India
(SBI) has announced the launch of YONO
Present Position Cash through which customers can
of State Bank withdraw money from ATMs
Group without using a card....
This Cardless Cash Withdrawal process works with two-factor
authentication and eliminates the risk of skimming and cloning.

The customers have to set a 6-digit Yono PIN for withdrawing cash
through the Yono app. Once the process is initiated the customer will
receive a 6- digit reference code via SMS, which will then have to be
entered into a Yono Cash Point....

The cash withdrawal must be completed within the next 30 minutes at

an ATM using both the PIN and the reference number....

ATMs enabled with this service will be termed as Yono Cash Point.

This cardless cash withdrawal will address the concerns over using
debit cards at ATMs for cash withdrawals by eliminating the possible
associated risks and also maximizes convenience and enhances the
banking experience for its cust...
 Profits, Efficiency and Capital Adequacy:

Over the years, the SBI continued to show better performance in

terms of profits, efficiency and capital adequacy

International Banking: As part of this exercise, State Bank of India

Present Position (SBI) is in the process of closing down nine branches, said its
Managing Director Pravin K. Gupta.
of State Bank India's largest public sector lender operates in
about 36 countries with nearly 190 branches.
Group
Technology Upgradation and Consumer Services:

Send money overseas from India using onlineSBI international money

transfers. The State Bank of India (SBI) is the largest
bank in India. It's a government-owned public sector
organisation with more than 18,000 branches all over the country.
2555 computerised branches operating in 620 centres and
covering 76% of the Bank’s domestic business;
(b) Network of 100 ATMs in 8 cities;
(c) Internet banking covering 35 branches by March 2002;
(e) Tele-banking;
(f) Remote banking for corporates;
(g) State Bank electronic payment system (STEPS) to
facilitates
instantaneous electronic transfer of funds;
 Paid up capital & reserves of the bank increased
from Rs.15224 crore on 2001-2 to Rs.64986 crore
in 2010-11.
(ii) Deposits of the bank increased from Rs. 270560
crore in 2001-2 to Rs. 933933 crore in 2010-2011.
progress and (iii) Advances of the bank increased from Rs.
performance of 120806 crore in 2001-2 to Rs. 756720 crore In
the State Bank of 2010-11.
India since 2001: (iv) Number of domestic offices of the bank
increased from 9034 in 2001-02 to 13542 in 2010-
11
and of foreign offices increased from 51 in 2001-02
to 1565 in 2010-11.
 Net profits of the bank increases from Rs.
2432 crore in 2001-02 to Rs. 8265 crore in
2010-11.
progress and (vi) Capital-adequacy ratio moved from
performance of 13.4% in 2001-2 to 10.7% in 2010-11.
the State Bank of (vii) Net NPA to net advances ratio has
India since 2001: fallen from 5.6% in 2001-2 to 1.6% in 2010-
11.
 State Bank and Rural Credit: The State Bank
had made remarkable progress in the field of
rural credit.
Working and Since its establishment, it has been making
progress tremendous efforts to develop rural credit by
extending credit facilities to cooperative
institutions and agriculturists.
 Expansion of Rural BranchesThe branch
expansion of the State Bank has been largely
rural – oriented. Out of the total 12486
branches of the State Bank Group at the end of
March 1990, 5811 (i.e., 44.8%) were located in
Working and the rural areas with population less than
progress 10,000; 3483 (i.e., 27.9%) were in semi-urban
areas with population 10,000 to less than 1
lakh; and 3192
Agricultural FinanceThe State Bank has been
extending financial help to agriculture. In 1969,
the total agricultural advances by the State
Bank were Rs. 92 crore
 ▪ The Bank has contributed to the spread of minor
irrigation schemes;
The State Bank of India ▪ (ii) To increase productivity at the farm level, the Bank
has identified and is provides production finance directly to the farmers.
expanding its ▪ (iii) To develop dryland farming, the Bank- (a) grants
involvement in the loans for agricultural development in dryland areas,
following critical areas in and (b) prepares and finances dryland farming projects
agricultural lending: in compact areas on the watershed basis.
▪ The bank finances the farmers to install drip irrigation
schemes in Karnataka, Tamil Nadu and Maharashtra.
▪ (v) The Bank provides assistance to farmers to take up
cultivation on waste lands under social forestry
schemes for raising nurseries and planting of trees for
fuel, fodder, etc.

▪ (vi) The Bank provides financial help for modernising

agricultural practices and raising farm productivity
through the use of tractors and other agricultural
implements.
▪ Village Adoption Schemea village is selected for
development by meeting its complete financial
requirements, including the requirements of the
farmers, artisans and others.
▪ Integrated Rural Development Programme:
Integrated rural development scheme aims at all round
and integrated development (i.e., economic, social,
cultural, etc.) of the rural areas.
▪ Regional Rural Banks: Regional rural banks have
been started with a view to provide credit to the small
and marginal farmers and other weaker sections of the
society. The State Bank is providing financial assistance
to these banks.
▪ Agricultural Development Branches: An important
feature in the field of agricultural financing by the
State Bank is the expansion of special agricultural
development branches. These branches aim at
financing all – round development of agriculture
and function in close cooperation with
Agricultural Refinance Development Corporation
(ARDC), now called National Bank for Agriculture
and Rural Development (NABARD).
▪ Short-Term Credit to Cooperative Banks:
▪ Assistance to Land Development Banks:
▪ Finance for Marketing and Processing Societies:
▪ Warehousing Finance:
 ▪ . Industrial Finance:
▪ Finance to Small Scale Industries:
Other facilities provided by the Bank

▪ technical and financial consultancy

State Bank and ▪ interest – free loans repayable on a long – term basis to the
needy entrepreneurs to set up new small- scale units.
Industrial ▪ conducts Entrepreneurial Development Programmes to
Finance: promote entrepreneurship

▪ assist the export efforts of the small – scale industrialists -

Packing Credit Guarantee Scheme

▪ increase opportunities for self – employment

▪ technology upgradation of small and medium enterprises,
 ▪ The State Bank of India has been progressing well
in the right direction. It has made remarkable
achievements in the fields of expanding banking
Conclusion facilities in the rural and semi- urban areas, and
providing financial help to agriculture,
cooperative institutions and small scale industries.