Professional Documents
Culture Documents
Organizational Study On STATE BANK OF HYDERBAD
Organizational Study On STATE BANK OF HYDERBAD
ON
STATE BANK OF HYDERABAD, RAICHUR
By
ROHIT H SAGAR
Reg.No:09KSCM068
INDIAN ACADEMY
SCHOOL OF MANAGEMENT STUDIES (IASMS)
Hennur Cross, Hennur Main Road, Kalyan Nagar, Bangalore -560 043
2010–11
INDIAN ACADEMY
SCHOOL OF MANAGEMENT STUDIES (IASMS)
Hennur Cross, Hennur Main Road, Kalyan Nagar, Bangalore -560 043
CERTIFICATE
This is to certify that Mr. ROHIT H SAGAR Studying III Semester, MBA. in Indian
Academy School of Management Studies (IASMS) has successfully undergone Internship
project at State Bank of Hyderabad, Raichur and has prepared a report entitled “AN
ORGANIZATIONAL STUDY ON STATE BANK OF HYDERABAD” under the
guidance of Prof KUPPUSAMY .A , Faculty Member, IASMS as a partial fulfillment of
the requirements of the Bangalore university of the award of Master Degree in Business
Administration for the academic year 2010-2011.
Date:
Place:
1
DECLARATION
I further declare that this internship report has not been submitted to any
university / institution for the award of any Degree/Diploma.
Date
Place Signature of the Student
2
Acknowledgment
Lastly I thank my parents, friends and all those concerned who have encouraged me
all through to complete this project well on time.
ROHIT H SAGAR
3
CONTENTS
Introduction 1-3
1 About the industry 1-2
Objective of the Study 3
Summary 63-64
Findings 63
5. Conclusion 63
Recommendation 64
4
LIST OF TABLES
Table No Particulars Page No.
2.1 Interest rate for education loan 27
2.2 Repayment Tenure for education loan 28
2.3 Security for education loan 28
2.4 Interest rate for loan against gold ornaments 30
2.5 Interest rate for FCNB 31
2.6 Reinvestment plan for FCNB 32
2.7 Interest rate for NRE 33
2.8 Interest rate for NRO 34
2.9 Reinvestment Plan for NRO 34-35
2.10 Interest rate for RFC 36
LIST OF FIGURES
5
1.1 NTRODUCTION-
State Bank of Hyderabad had been constituted as Hyderabad State Bank on 8th August 1941 under
Hyderabad State Bank Act, 1941. It served as the central bank of the erstwhile State of Hyderabad,
covering present-day Telangana region of Andhra Pradesh, Hyderabad-Karnataka of Karnataka and
Marathwada of Maharashtra. Their functions include managing the currency - Osmania Sikka and
public debt, leaving aside the usual functions of commercial banking. Gunfoundry in Hyderabad saw
the first branch of the bank on 5th April, 1942.it has 255 branches in india and 174 branches in
Andhra Pradesh.
It was in the year 1953 that the Bank overtook the assets and liabilities of the Hyderabad Mercantile
Bank Ltd. and started conducting Government and Treasury business as RBI's agent. Then right in
1956, the Bank was taken over by RBI as its first subsidiary and the name got rechristened from
Hyderabad State Bank to State Bank of Hyderabad. More transition waited for the bank as the bank
became a subsidiary of the State Bank of India one 1st October 1959 and presently it is the largest
Associate Bank of State Bank of India.
All the branches of the State Bank of Hyderabad are completely intertwined under Core Banking
Solutions - with a wide product and service range for its customers. Latest technologies like Internet
Banking, ATMs - all customers are entitled to these facilities. With a pan India presence, the Bank
operates through more than 1,000 branches.
State Bank of Hyderabad (SBH) is an associate bank of State Bank of India (SBI), and is one of the
scheduled banks in India. The Bank's Head Office is situated at Gunfoundry Area, in Hyderabad,
India. SBH has over 1031 branches and about 12,800 employees. Assets are in excess of Rupees 767
billion.
The bank has performed well in the past decades, winning several awards for its banking practices.
The bank originated as the central bank of the erstwhile Nizam state under the name, Hyderabad
State Bank. It was established in 1942, during the reign of the last Nizam of Hyderabad, Mir Osman
Ali Khan. The bank also managed the Osmanai sicca, the currency of Hyderabad state, which had the
distinction of having its own currency during British rule.
In 1956, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja Pannalal Pitti
had founded in 1935. (Other accounts give year of founding as 1946 and that of merger as 1952).
Hyderabad State Bank was renamed State Bank of Hyderabad in 1956, and its entire share capital was
vested with the Reserve Bank of India. Later, after the Subsidiary Banks Act was passed in 1959, it
and the other banks of the princely states became subsidiaries of SBI. SBH was the first subsidiary of
State Bank of India.
Quarterly results
Rs in crore 30th Sep 2009 30th Sep 2008
Net Profit 234.36 184.84
State Bank of India is the nation's largest and oldest bank. Tracing its roots back some 200 years to the
British East India Company (and initially established as the Bank of Calcutta in 1806), the bank operates
more than 15,000 branches within India, where it also owns majority stakes in six associate banks. State
Bank of India (SBI) has more than 80 offices in nearly 35 other countries, including multiple locations in
the US, Canada, and Nigeria. The bank has other units devoted to capital markets, fund management,
factoring and commercial services, credit cards, and brokerage services. The Reserve Bank of India owns
about 60% of State Bank of India. The roots of the State bank of India rest in the first decade of 19th
century, when the bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806.
The Bank of Bengal and two other Presidency banks, namely, 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 the royal charters. These three banks
received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they
retained until the formation of the reserve bank of India. The Presidency banks amalgamated on 27
January 1921, and the reorganized banking entity took as its name Imperial Bank of India. The Imperial
Bank of India continued to remain a joint stock company.
Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of India, which is
India’s central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955 the
Imperial Bank of India became the State Bank of India. The Govt. of India recently 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, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries.
On Sept 13, 2008, state bank of Saurashtra, one of its Associate Banks, merged with State Bank of India.
SBI has acquired local banks in rescues. For instance, in 1985, it acquired Bank of Cochin in Kerala,
which had 120 branches. SBI was the acquirer as its affiliate, State Bank of Travancore, already had an
extensive network in Kerala.
SBI provides a range of banking products through its vast network in India and overseas, including
products aimed at NRIs. The State Bank Group, with over 16000 branches, has the largest branch
network in India. With an asset base of $250 billion and $195 billion in deposits, it is a regional banking
behemoth. It has a market share among Indian commercial banks of about 20% in deposits and advances,
and SBI accounts for almost one-fifth of the nation’s loans
SBI has tried to reduce its over-staffing through computerizing operations and Golden handshake
schemes that led to a flight of its best and brightest managers. These managers took the retirement
allowances and then went on the become senior managers at new private sector banks.
7
The State bank of India is 29th most reputable company in the world according to Forbes.
Associate banks
1955 -
On 1st July State Bank Of India Was Constituted Under The State Bank Of
India Act 1955, For The Purpose Of Taking Over The Undertaking And
Business Of The Imperial Bank Of India. The Imperial Bank Of India
Was Founded In 1921 Under The Imperial Bank Of India Act 1920. The Bank
Transacts General Banking Business of Every Description Including,
Foreign Exchange, Merchant Banking and Mutual Funds.
2009
State Bank of India yesterday slashed its benchmark lending rate by
half a percentage point to 11.75 per cent. The Benchmark Prime Lending
Rate (BPLR) was revised down by 50 basis points with effect from June
29, SBI informed the Bombay Stock Exchange. This move would benefit
home, car and corporate loan customers
- State Bank of India on June 30 launched two new home loan products
called as SBI Easy Home Loan and SBI Advantage Home Loan, with zero
processing fees for both waived off till September 30. While SBI Easy
Home is for loans amount up to Rs 30-lakh while the SBI Advantage Home
is for loans above Rs 30-lakh, a press release issued here said.
2010
8
1.2 OBJECTIVES
5) To study the strength weakness opportunities and threats of the organization to carry out swot analysis.
2.1 HISTORY-
The bank originated as the central bank of the erstwhile Nizam state under the name, Hyderabad State
Bank. It was established in 1942, during the reign of the last Nizam of Hyderabad, Mir Osman Ali Khan.
The bank also managed the Osmania sicca, the currency of Hyderabad state, which had the distinction of
having its own currency during British rule.
In 1956, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja Pannalal Pitti
had founded in 1935. (Other accounts give year of founding as 1946 and that of merger as 1952).
Hyderabad State Bank was renamed State Bank of Hyderabad in 1956, and its entire share capital was
vested with the Reserve Bank of India. Later, after the Subsidiary Banks Act was passed in 1959, it and
the other banks of the princely states became subsidiaries of SBI. SBH was the first subsidiary of State
Bank of India.
9
State Bank of Hyderabad, H.O
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.
10
Gunfoundry is located in a lane opposite to the Jamia Masjid Aliya, and can be approached by
the side lane of Lepakshi Government Handicrafts Emporium. In fact, the whole locality is
known as Gunfoundry, where the Head Office Building of State Bank of Hyderabad ( a
landmark inaugurated by the President of India in 1955 ) and the Department of Archaeology
& Museums are located on the main road in the same line.
Gunfoundry is one of the several cannon and cannon-ball factories set up in 1786 by French
General, Monsieur Raymond who was in the service of Nawab Mir Nizam Ali Khan, the 2 nd
Nizam of Hyderabad. Incidentally, this is the only structure of surviving foundry established in
the 18th century in the whole of Hyderabad city.
In 19th century, Roman Catholic Cathedral on the main Secunderabad Road was also
constructed in Gunfoundry locality. Even before 100 years the ruins of a number of other
foundaries were seen on the road to Mir Alam Tank and on the Bangalore road. Malcolm, a
renowned historian, in his well-known book History of India, referred to these foundaries in
1798 as places in which they cast excellent cannon and made serviceable muskets
As seen in a photograph published in Glimpses of Nizams Dominion in 1895, the height of the
brick walls of Gunfoundry is approximately 50 feet with a tapered portion commencing above
25 feet height. It can be said that due to negligence and poor maintenance, the original
height of the tapered walls have come down to 25 to 30 feet. The lower portion was
plastered with lime. The shape of the bricks used in the construction of Gunfoundry is square
with less thickness. The binding material used is lime mortar. The wall surfaces have been
pointed with lime mortar on the exterior and interior sides of the foundary.
We find here and there that the walls have been given joints of square iron rods. In the lower
portions, brick arches are made in semi circular shape, where the furnaces, melting of iron
11
casting of cannons, muskets etc. were carried out in most scientific manner under the
supervision of General Monsieur Raymond.
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 to 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 centers 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.
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.
12
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 centers of the presidency.
India witnessed rapid commercialization 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 commercialization 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.
13
Bank of Bombay
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 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
14
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.
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.
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.
15
2.2 VISION:
“My SBH,
My customer first.
My SBH: First in customer satisfaction.”
MISSION
The bank has mission to reach every segment of society through branch expansion
in the remotest corner of the country. To cultivate entrepreneurship among the
needy through micro-finance. To introduce and run cope with technology enabled
services.
16
2.4 POLICIES & PROCEDURE
Power and duties of its officers and employees- All the officers have certain financial powers and
administrative powers depending upon their positions. The delegation of financial powers of various
grades of officials is decided by the Central Board which are revised from time to time, depending upon
the organization’s requirement and also Government / RBI guidelines. The concerned sanctioning
authority takes a decision to sanction a loan or otherwise on merits of each proposal.
The procedure followed in the decision making process, including channels of supervision
and accountability-
There is a well defined system in the Bank regarding the decision making process. Financial decisions are
taken at various levels by different officials depending upon their positions and also through committee
approach. Centralized credit processing cells are being formed at certain centres for sanction of personal
segment loans and loans under SIB segment. Branches will source the applications and forward them to
the respective credit processing cells, for their consideration. Further, there is a well defined
organisational structure and a clear system of accountability and control system, which also take into
account the RBI / CVC guidelines.
The norms set for discharge of its function-
Regarding the core functions of the Bank i.e. accepting deposits and sanction of loans, the interest rates
for deposits / advances and different deposit as well as loan products, are displayed in the Bank’s website
and also made available at all the Branches.
Regarding sanction of loans, each officer of the Bank will consider loan proposals and take a decision
in terms of the scheme of delegation of powers, on the merits of the proposals. All the officers of the
Bank are expected to discharge their duties and responsibilities with integrity and due diligence. Public
can also refer to the captions ''Interest rates', 'code of ethics' & 'citizens charter' of the Bank's website
for any further information.
The rules and regulations, instructions, manuals and records held by the Bank/ used by its
employees for discharging its functions
There are quite a number of documents like manuals, book of instructions, codified circulars,
scheme of delegation of powers, proceedings of the board etc and also the periodical circulars used by the
employees for discharging various functions.
A statement of the categories of documents that are held by the Bank or under its control.
These are mainly register of Shareholders/Record of the proceedings of the AGMs, Board Meetings
and various Committee meetings, documents executed by customers/borrowers/guarantors, contracts with
third parties etc.
The particulars of any arrangement that exists for consultation with, or representation by, the
members of the public in relation to the formulation of its policy or implementation thereof in
SBH.
As per the present arrangement, the Shareholders can raise issues concerning policies and in the Annual
General Meetings which can relate to the policy of the Bank.
Further, the Banks quarterly results and annual results / reports are published in the bank’s website
periodically for information of public as well as shareholders which would give an idea about the policies
of the bank and implementation thereof.
Further, the Central Board the apex management body of the bank is constituted with members who
are leaders from different interest groups and professions such as Industrialists, Bankers from Apex
Institutions, Chartered Accountants, Economists and Workmen representatives. Public can also refer to
the captions financial results / consolidated financial statement / annual report / shareholders
18
information of the Bank's website, for further information.
Bank has appointed various committees for different purposes. Following are some of the important
Committees managing the key affairs of the Bank
Public are not entitled to participate on the above committee meetings and minutes are not accessible to
public. Public can also refer to the caption Annual report for various committees more particularly the
"corporate governance" link under the Annual report for more information about the committees.
State Bank of Hyderabad offers its products and services in domains like -
Personal Banking.
NRI Services.
Agriculture.
International.
Corporate.
SME.
Domestic Treasury.
2. Savings Bank
3. Savings Plus
4. Term Deposits
5. Reinvestment Plan
19
7. Recurring Deposits
9. Housing Loans
3. Business Enterprises
4. Transport Operators
20
3. Produce Marketing Schemes
2. Central Govt.
3. CBEC
4. CBDT
5. UMEA
6. Defense
7. Posts
8. Telecom
(vi)Other Services
1. Safe Deposit Lockers
2. Safe Custody
4. Gift Cheques
21
2. Remittance Facilities (with Associate Banks)
4. Telegraphic Transfers
5. Collections (Cheques)
6. Collections (Bills)
Card Convenience
With SBH ATM cum Debit Card and you have access to the widest network of ATMs across the
country to withdraw cash, enquire about your balance, etc. Moreover, your card enables you to shop at a
large number of Merchant Establishments in India. You can also avail yourself of our International ATM-
cum-Debit Card which can be used within as well as outside India, at a nominal fee.
Easy and Wide Accessibility
Transact at your convenience, saving time and cost through SBH Internet Banking. You can also
withdraw cash from Maestro endorsed ATMs of other banks under bilateral sharing, at a nominal fee.
Monitoring Your Account
Monitor and control your funds through SBH Internet Banking or/ and through Passbook/
statement of account facility.
Alternatively, access your account by downloading Instant SBH on your computer. .
Other Benefits
Overdraft facility.
Transfer of accounts between our wide network of branches without any charge.
Nomination Facility - Available.
Low minimum balance requirements
SBH Savings Bank Account helps to plan and save for your future financial requirements. Your
savings remain liquid, safe and earn moderate interest.
Benefits-
i. Card Convenience
ii. Easy and Wide Accessibility
iii. Monitoring Account.
iv. Moderate Earning
The Savings Bank Account earns the holder an interest at the rate of 3.5% p.a., compounded half yearly.
v. Money Multipliers
Earning of Interest at Term Deposit rates through Savings Plus Account.
22
Linking Savings Bank Account to your Multi Option Deposit (MOD) Account to earn additional
interest on your surplus money and get the facility of automatic unitised break up of MOD in case
there is a shortfall in your SB account to honour the cheque drawn by you.
Value Added Features
Transfer of accounts between our wide network of branches without any charge.
Nomination facility – Available
25 cheque leaves free, in a year.
The Savings Plus ,Account brings to you the best of both Savings Bank and Term Deposit
Accounts. This provides you the convenience of a Savings Bank Account along with higher return of
Term Deposit.
An higher income can be earned on surplus funds by investing those with SBH. It provides security, trust
and competitive rate of interest.
Flexibility in period of term-deposit from 15 days to 10 years.
Affordable Low Minimum Deposit Amount: You can open a term deposit with SBH for a nominal
amount of Rs.1000/- only.
Flexibility in choosing the amount you wish to invest and the maturity period.
This plan helps to earn interest on interest, thus giving you a two-fold income. You deposit your money
with us for any period between six months to 10 years, and we pay you interest on your deposited money
plus on the interest you earn. Thus your interest gets compounded every quarter giving you higher
returns.
The Multi Option Deposit (MOD) Account is a combination of Savings Bank or Current Account with
Term/ Special Term Deposit Accounts, so that one can securely write cheques up to the balance in the
MOD account or up to the drawing power available as overdraft in the Current account. Withdrawals
through ATMs can also be conveniently made.
Want to create a fund for your children's education or marriage or to buy a car or for a dream
holiday? Whatever may be your financial goals, through Recurring Deposit Scheme you can save a little
every month so that at the time of need you have sufficient funds to achieve your financial goals.
Recurring Deposit provides you the element of compulsion to save at high rates of interest applicable to
Term Deposits along with liquidity to access that savings any time. So set aside a small amount every
month and earn at compounded rates of interest.
23
make contributions to the Fund and obtain Income Tax rebate under the relevant provisions of the Income
Tax.
"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards
along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in association
with AC Nielsen-ORG Marg in 21 cities across India. SBH HOME LOANS now offers Interest Rates
concessions on GREEN HOMES in accordance with SBH's commitment to Environment protection.
SBH Home Loans come to you on the solid foundation of trust and transparency built in the tradition of
State Bank of Hyderabad. Best Practices followed in SBH mentioned below will tell you why it makes
sense to do business with State Bank of Hyderabad.
Unique features:
- Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest and maximize
gains (see SBH Max-Gain in the following sections)
-Option to club income of your spouse and children to compute eligible loan amount
-Provision to club depreciation, expected rent accruals from property proposed to compute eligible loan
amount
-Provision to finance cost of furnishing and consumer durables as part of project cost
-Optional Group Insurance from SBH Life at concessional premium (Upfront premium financed as part
of project cost)
-Interest calculated on daily reducing balance basis, and starts from the date of disbursement.
-‘Plus’ schemes which offer attractive packages with concessional interest rates to Govt. Employees,
Teachers, Employees in Public Sector Oil Companies.
-Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban Development
Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat
24
-Option to avail loan at the place of employment or at the place of construction
Personal loan at attractive rates under SBH Home Plus scheme tailored exclusively for SBH
Home Loan customers.
Purpose
1. Purchase/ Construction of House/ Flat.
Move ahead in life with SBH Car Loans. Low interest rates, easy repayment options, total
transparency.
Finance to include vehicle registration charges, insurance, one-time road tax and accessories (subject to
conditions).
A new car, jeep, Multi Utility Vehicle (MUV) or SUV (any make or model)
A used car / jeep / MUV /SUV (not more than 5 years old). (any make or model)
Excellent service and lower costs. A quick survey of similar schemes available elsewhere and you will
find that SBH Car Loans for new and old vehicles offer you :
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.
Any other expenses required to complete the course like study tours, project work etc.
Amount of Loan
26
Interest Rates
(w.e.f 01.01.2009)
An Interest Rate concession of 0.50% to Girl Student availing Education Loans: 15%;
Repayment Tenure
Repayment will commence one year after completion of course or 6 months after securing a job,
whichever is earlier.
Repayment Period
Place of Study Loan Amount
in Years
Studies in India Rs. 10.0 lacs 5-7
Studies Abroad Rs. 20.0 lacs 5-7
Table No.2.2
Security:
For loans upto Rs. 10.00 lacs for Studies in India and upto Rs. 20.00 lacs for
Amount
studies abroad
Upto Rs. 4
No Security
lacs
Above Rs. 4 Collateral security in the form of suitable third party guarantee. The bank may, at its
lacs to Rs. discretion, in exceptional cases, weive third party guarantee if satisfied with the net-
7.50 lacs worth/means of parent/s who would be executing the documents as "joint borrower".
Above Rs. Tangible collateral security of suitable value, along with the assignment of future
7.50 lacs. income of the student for payment of installments.
Table No.2.3
(SOURCE BANK RECORDS)
All loans should be secured by parent(s)/guardian of the student borrower. In case of married person, co-
obligator can be either spouse or the parent(s)/ parents-in-law.
Funds readily available to you whenever you desire or need, be it a sudden vacation that you plan with
your family or urgent funds required for medical treatment?.SBH Saral - Personal Loan helps to access
this facility from over 3000 branches across the country and confidently face the challenge of meeting
any kind of personal expenses.
Enjoy the SBH Advantage :
If a person is a Central or State Government pensioner drawing your pension through one of SBH
branches and are not more than 72 years of age She/he can avail of a loan from that branch to
meet their personal expenses. They can avail a loan of up to a maximum of 12 months pension,
subject to a ceiling of Rs.1, 00,000. The loan may be repaid over 5 years and will carry a low
interest rate of 12.75% p.a. There are no processing fees, no hidden costs and no prepayment
penalties. Whenever they have some surplus funds, you can credit your loan account, thereby
reducing your loan liability and interest burden.
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Salient features of the Scheme:
Eligibility:
All Central and State Government pensioners, whose pension accounts are maintained by SBH
branches. The pensioner should not be more than 72 years of age.
Purpose:
To meet personal expenses.
Loan amount :
A maximum of 12 months pension with a ceiling of Rs.1,00,000/-
Margin :
Nil
The spouse eligible for family pension should guarantee the loan or any other family member or a third
party worth the loan amount
Leverage your investments in shares, debentures, public sector bonds and Government securities for
loans to meet unforeseen expenses!! You need not miss out on the next stock market boom!!
Avail of loans up to Rs.20.00 lacs against your shares/debentures to enable you to meet contingencies,
personal needs or even for subscribing to rights or new issue of shares.
These accounts can be opened/credited with remittances from abroad/transfers from existing
NRE/FCNR accounts/deposit of foreign exchange brought into India during visits to India.
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Term Deposit (cumulative or non-cumulative) accounts for periods from 6 months to 3 years can
be maintained in US Dollars, Pounds Sterling, Deutsche Marks, Japanese Yen or Euros.
These accounts involve no exchange loss, as interest and principal are payable in US Dollars,
Pounds Sterling, Japanese Yen, Deutsche Marks or Euros.
Accounts can be opened jointly only with another Non-Resident Indian.
Withdrawals for local payments or payments abroad in any convertible currency are allowed
without Reserve Bank of India's approval.
Loans against deposits are available for purposes other than re-lending/carrying on agricultural/
plantation activities/real estate business.
Interest Rates*
Reinvestment Plan
Table No.2.6
Features
NRNR accounts can be opened by way of transfer of funds from abroad or from existing
NRE/FCNR accounts.
Deposits will be accepted for maturities of six months to three years.
Interest is offered at rates higher than those offered on NRE accounts.
Loans against deposits are available in India. The interest earned is freely repatriable. These accounts can
be opened jointly with residents also.
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2.5.19 NON-RESIDENT (EXTERNAL) RUPEE ACCOUNTS (NRE)
Options
Savings Bank Accounts
Current Accounts
Term Deposits
Special Term Deposits (Cumulative Interest)
Recurring Deposits
Cash Certificates
Features
These accounts can be opened/credited with remittances from abroad/transfer from existing
NRE/FCNR accounts/deposit of foreign exchange brought into India, during visits to India.
Accounts can be opened jointly only with another Non-Resident Indian.
Non-Resident Indians can authorise residents to operate their NRE accounts for local payments
through a power of attorney/letter of authority. You may download the letter of authority by
clicking here.
Transfer of funds between NRE accounts of different persons, for genuine personal purposes, is
freely permitted.
Withdrawals for local payments or payments abroad in any convertible currency are allowed
without Reserve Bank of India's approval.
Loans against deposits are available for purposes other than re-lending/carrying on agricultural/
plantation activities/real estate business.
Interest rates*
Features
Accounts can be opened/credited with legitimate local funds of the non-resident Indian; foreign
exchange funds may also be credited into the accounts.
Accounts can be opened jointly with non-residents/residents.
Funds in the accounts cannot be remitted abroad but used only for local payments.
Interest rates are the same as in the case of domestic deposits.
Interest earned on the accounts can be remitted abroad against application on form RC1, along
with a Chartered Accountant’s Certificate and an undertaking/certificate regarding payment of tax
from the Income Tax authorities.
Interest is subject to deduction of tax at source at the rate of 30%.
Loans against the deposits can be availed of for purposes other than relending, carrying on
agricultural/plantation activities/real estate business.
Interest rates*
Table No.2.8
(SOURCE-BANK RECORDS)
Reinvestment plan
a.) 0.50% more in case of single deposit of Rs.15 lacs to less than Rs.1 crore
b.) 0.75% more in case of single deposit of Rs.1 crore to less than Rs. 10 crores.
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c.) The rate is quoted daily for single deposit of Rs. 10 crores and above.
Savings Bank Deposits: 4.00% p.a.
Effective from: 1st April 2000.
Features
NRIs returning permanently after a continuous stay of minimum one year abroad, can open
Resident Foreign Currency accounts with banks in India. NRIs returning after less than one year
should obtain RBI's permission for opening such accounts.
Accounts can be maintained as term deposits in US Dollars only for 6 and 12 months.
The minimum deposit accepted is US $1,000 .
The balances in NRE/FCNB accounts and other foreign exchange funds brought in by the NRI at
the time of return and subsequently from the assets maintained abroad can be freely invested in
RFCs.
The funds in RFCs can be remitted abroad for any bonafide purpose of the account-holder or his
dependents without RBI`s approval.
The funds can also be withdrawn in rupees for local payments. If the Returning Indian subsequently goes
abroad to become an NRI, the balance in his RFC account can be converted to an NRE/FCNR account.
Tax on the interest income from RFC is exempted till such time as the Returning Indians maintain the
status of 'Resident but Not Ordinarily Resident'.
Hence if the Returning Indian has been
Non-Resident for a continuous period of 2 years, he can get exemption from income tax for 9 subsequent
years, till he becomes 'Resident and Ordinarily Resident'.
Interest rates*
Applicable with effect from 29th May 2000
Table No.2.10
(SOURCE-BANK RECORDS)
SALIENT FEATURES
Purpose of Loan
Loans to NRIs & PIOs can be extended for the following purposes.
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To purchase a plot for construction of a dwelling unit.
To purchase furnishings and consumer durables, as a part of the project cost
Eligibility criteria
Loan Amount
Minimum loan amount : Rs. 3 lakhs
Maximum loan eligibility :
Margin: 15%
Processing Fee: 0.50% of the loan amount (incl. service Tax)
Advocate's fee and Valuer's fee extra
Interest Rate:
Interest rates are same as applicable for resident Indian borrowers for various tenures, available on
fixed/floating/combination of fixed and floating rates (under SBI-Flexi Home Loans)
Repayment in EMIs (Equated Monthly Installments)
Interest is applied on daily diminishing balance basis
Subject to liquidation of loan by the age of 60 years or the age of retirement whichever is earlier
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Mode of Repayment
Security
SBH Maxgain Home Loans- which enable the borrower to avail the Loan as an Overdraft. The borrower
can park his surplus funds in the loan account, significantly reducing his interest burden/optimize yield
on his funds. Borrower is eligible for International ATM-Debit Card, Internet Banking Facility and
cheque book to operate the loan account.
SBH-Flexi Home Loans- facility to avail Home Loan with a customized combination of fixed and
floating interest rates, to effectively hedge the risks arising due to interest rate volatility
SBH-Realty Home Loans- Exclusive scheme to suit the requirements of borrowers who intend to avail
loan for purchase of plot of land for construction of house
SBH-Freedom Home Loans- Tailor made product for NRIs, enabling the borrowers to avail loan by
pledging other securities like Banks deposits/National Savings Certificates/ Life policies etc. standing in
the name of the applicant/ third party- complete freedom from the hassles of mortgage formalities.
The Bank finances Small Business activities that can be started with relatively lower investment
and with no special skills on the part of the entrepreneurs.
In this category, the SBH extends loans to retail traders who act as a vital link between the
manufacturers of goods or commodities and the consumer.
The bank offers working capital products as well as loans for purchase, renovation and repairing
of equipment.
Retail trade finance is normally capped at Rs 5 lakh. Any individual or a firm (partnership or
proprietorship) engaged primarily in buying and selling mercantile goods is eligible for this mode
of finance.
For requirements up to Rs 25,000, no margins are involved. For needs ranging from Rs 25,000 to
Rs 50,000, the margin is set at 20 per cent. In other words, the quantum of the loan will be
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restricted to 80 per cent of the unit's expenditure. For fund needs above Rs 50,000, a 25 per cent
margin may be applied.
2.5.24 BUSINESS ENTERPRISE
Under small business finance, the SBH extends loans to transport operators in different forms. The bank
offers working capital products as well as term loans for purchase of vehicles. The bank finances up to 10
vehicles irrespective of the loan amount.
All transport operators whether individuals or associations of not more than six persons are eligible for
this mode of finance.
For requirements up to Rs 25,000, no margins are involved. For needs above Rs 25,000, the margin may
range from 15 per cent to 25 per cent.
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2.5.26 CROP LOAN (ACC)
Purpose
Financial assistance to meet cultivation expenses for various crops.
Loan Amount
Loan amount is worked based on the cost of cultivation incurred for each crop per acre of crop cultivated
and 90 % of the cost of cultivation (Scale of Finance) is given as loan.
Agriculture term loans refer to capital investments required by farmers to realize benefits over a period of
time. The outlay, is according to the NABARD unit of the scheme cost. The schemes are financed subject
to the technical feasibility and economic viability of the proposal in the area of operation.
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2.5.28 LAND DEVELOPMENT SCHEMES
Credit solutions for land development projects in the form of direct finance to cultivators for better
productivity.
Loans under this head cover various activities like land clearance(removal bushes, trees, etc.), land
leveling and shaping, contour/graded bunding,bench terracing for hilly areas, contour stone walls,
staggered contour trenches ,disposal drains, reclamation of saline/alkaline soils and fencing etc.
Who are eligible for Term Loans
All farmers owning agricultural land are eligible.
Loan amount
Upto Rs. 50,000/- 100 % of the cost of the asset / project cost is provided as loan. Above Rs. 50,000/-
upto 85 % of the cost of the asset / project is given as loan.
Credit for creating irrigation facilities from underground / surface water sources All structures and
equipments connected with it are also financed. Loans cover various activities like digging of new wells
(open/bore wells), deepening of existing wells (traditional/in well bore), energisation of wells (oil
engine/electrical pump set), laying of pipe lines, installing drip/sprinkler irrigation system and lift
irrigation system.
Purpose
Credit for purchase of farm equipment and machinery for agricultural operations.
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The scheme covers activities ranging from purchase of tractors and accessories,trailers, power tillers,
combine harvesters, power sprayers, dusters, threshers etc.
Loan amount
Upto Rs. 50,000/- 100 % of the cost of the asset is provided as loan. Above Rs. 50,000/- upto 85 % of the
cost of the asset provided as loan.
To extend adequate and timely support to farmers for their short term credit needs.
Farmers with excellent repayment record for 2 years. New farmers with sizeable deposits with our
branches for 3 to 4 years are also eligible. Farmers who have defaulted in repayment but have liquidated
the out standings are also eligible.
Loan Amount:
Loan amount is decided based on the cropping pattern, ancillary and contingency needs of the farmer for
the full year. 90 % of the cost of cultivation (Scale of Finance) is given as loan per acre. 100 % of the cost
is available as loan up to Rs. 50,000/- and 85 % of the cost is available as loan above Rs. 1,00,000/-
Disbursement of the loan:
As per the cultivation requirements of the crop the loan amount is disbursed in cash and kind (for
ferlizers, pesticides etc)
State Bank of Hyderabad's linkage with Government business are widespread. No wonder that out of
9315 branches in India, about 7000 branches are conducting Government Business. The large network of
our branches provides easy access to the common man to deposit the following Government dues and
pension payments
For the safety of your valuables we offer our customers safe deposit vault or locker facilities at a large
number of our branches. There is a nominal annual charge, which depends on the size of the locker and
the centre in which the branch is located
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2.5.34 SAFE CUSTODY
Gift Card is a Pre-paid Plastic Card supported by Magnetic-strip based technology. It is usable at all VISA
enabled Merchant Establishments and POS by signature/ PIN. It is a perfect
substitute for Gift Vouchers sold by many retail houses as its use is not restricted to any particular
Merchant Establishment/ Point of Sale.
2.5.36 DEMAND DRAFT IN INDIAN RUPEES
You can obtain a DD in rupees issued by SBH/ correspondent banks or exchange companies in
UAE, Bahrain, Oman & Qatar having Rupee Drawing arrangement with this bank and mail it to
the branch of SBH where your account is maintained. Rupee DDs obtained from exchange
companies in the Gulf drawn on designated branches of SBH under Rupee Drawing arrangement
are immediately paid on receipt or through clearing and amount credited to your account without
any deductions.
i. Customers can make local payment through Banker’s Cheques and remit funds from one centre to
another through drafts, telegraphic transfers, electronic funds transfer (RTGS,EFT,ECS etc) at specified
service charges (exchange).
ii. Drafts are issued on our branches. They are issued on the branches of Associate Banks at centres
where we do not have any branch.
iii. The issue and payment of Banker’s cheques and drafts in cash across the counter is subject to Income
Tax provisions and RBI guidelines against money laundering activities. Issue of these instruments of Rs.
50,000/- and above is not permitted against cash but only through debit to customer’s account or against
cheques/other instruments tendered by the purchaser.
40
iv. Banker’s cheques / drafts for an amount of Rs.50,000/- and over will not be paid in cash, but only for
credit of the payee’s account or to his banker.
v. Drafts of Rs.50,000/- and above are required to have signatures of two authorised officials. Before
taking delivery of the drafts, please verify that the draft is complete in all respects including signature of
the official(s) along with their specimen signature numbers at the place provided for.
vi. Banker’s cheques and drafts are valid for 3 and 6 months respectively and can be revalidated by
issuing branches on written request of the purchasers. The drafts can be revalidated by the payee(s) if
they are identified as the holder in due course. The drafts can be revalidated only once within one year
from the date of issue. After one year of the draft, they are to be cancelled at the issuing branch, and a
fresh draft obtained after paying the requisite service charges.
vii. In respect of lost drafts, duplicate drafts for amounts above Rs 10000/-(in cases where there is no
reason to doubt the bonafides of the applicant) shall be issued by the issuing branches on receipt of
confirmation of non payment from the drawee branch and on execution of stamped letter of indemnity
with two sureties good for the amount involved.
viii. For issue of duplicate drafts up to Rs.10, 000/- requirement of the relative non-payment certificate
from the other branch is waived. For issue of duplicate drafts below Rs.1,000/-, only indemnity letter will
be necessary. The customer should inform the issuing branch promptly of loss of demand draft giving full
particulars thereof in order to prevent misuse thereof.
ix. The Bank may not insist on production of sureties for issue of duplicate demand drafts for amounts up
to Rs 50, 000/- if the applicant/purchaser after complying KYC norms is maintaining a satisfactorily
conducted account with the issuing branch for a minimum period of six months as on the date of issue of
original draft and he/she is considered good for the amount involved.
x. The bank will issue duplicate demand draft to the customer within 14 days from the date of receipt of
request. For delay in issuing duplicate draft beyond the above stipulated period, the banks will pay
interest at the rate applicable for fixed deposit of corresponding maturity in order to compensate the
customer for such delay.
xi. Where the bank is found to have committed an error in non payment of a draft/remittance issued by it
to a holder in due course, the customer will be compensated with interest at SBAR for the number of days
the instrument remains unpaid from the date of its first presentment.
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2.5.38 TELEGRAPHIC TRANSFER
For quick credits to your account you can send wire transfer/ telex transfers through our offices/
correspondent banks. Facility of transfer by wire /telex is available at branches having SWIFT/ TT
drawing arrangements. For transferring funds through our corresponding banks you may furnish details in
the following format.
You can also deposit your personal cheques drawn in foreign currencies payable at foreign centres for
credit to your account or for issue of NRE/ FCNRB deposits Proceeds of the cheque collected through
our own Global Link Service (GLS) or through accredited correspondents will be credited to your
account after some cooling off period depending on the currency of the cheque.
2.5.40 RTGS
RTGS is a software package which provides online settlement of payments between financial institutions.
In this system payment instructions between banks are processed and settled individually and
continuously throughout the day. This is in contrast to net settlements where payment instructions are
processed throughout the day but inter-bank settlement takes place only afterwards typically at the end of
the day. Payee banks and their customers receive funds with certaintly, or so-called finality, during the
day, enabling them to use the funds immediately without exposing themselves to risk. A lag between the
time at which information is made available to receiving banks and the time at which settlement takes
place may have important risk implications in large fund transfer systems. To initiate a funds transfer, the
sending bank dispatches a payment message which is subsequently routed to the central bank and to the
receiving bank as the system processs and settles the transfer. RTGS system settles payments on a
transaction-by-transaction basis as soon as they are accepted by the system. RTGS systems do not create
credit risk for the receiving participant because they settle each payment individually, as soon as it is
accepted by the system for settlement. RTGS system can require relatively large amounts of intraday
liquidity because participants need sufficient liquidity to cover their outgoing payments. The cost of
intraday liquidy depends on variables such as amount required, the opportunity cost of maintaining liquid
balances and the cost of intraday credit.
When one is worrying too much about one’s savings, investments, etc and when one feels
insecure about his/her life, it’s time for him/her to insure his/her life. And what can be better than
SBI Life Insurance! SBI, a leading company in India, offers a comprehensive range of life
insurance and pension products. SBI Life Insurance is an integral part of the SBI Group. It is a
joint venture between the State Bank of India and BNP Paribas Assurance. It is also the largest
banking franchise in India. SBI Life Insurance comprises Banc assurance, Agency and Group
Corporate.
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SBI Life Insurance Products:-
SBI Life Insurance features both individual and group products like:
Unit Linked Products: this is a single non participating product group that meets both the financial
as well as insurance needs.
Pension Products: these comprehensive plans help to meet your post retirement financial needs.
Pure Protection Products: nobody can predict future. So, any time anything can shatter one’s
dreams. Pure Protection Products help to keep one safe and secure during these trouble times.
SBI Life also offers some protection cum savings products and money back scheme products. SBI
also has products for brokers. These products take inspiration from the endeavors of various
industries and make your life easy.
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2.5.42 SBI MUTUAL FUND
SBI Mutual Fund operates under State Bank of India and Societe Generale Asset Management of
France and has asset management experience of more than 25 years. SBI Mutual Fund offers
different kinds of products like growth based products, income based products and balanced
funds.
The SBI Mutual Fund operates under State Bank of India and Societe Generale Asset
Management of France. With over twenty years of experience in asset management, the company
has grown immensely since its establishment. SBI Mutual Funds offer innovative mutual fund
products to its wide pool of customers and its products are available across India. It has a wide
portfolio of products that meet the requirements of different types of investors. The SBI Mutual
Fund is headed by Mr. Syed Shahabuddin, Managing Director of the company.
Products and services offered by the SBI Mutual Fund are as follows:
Equity / Growth based products- The equity based funds offered by SBI Mutual Fund, are as follows -
44
SBI TAX ADVANTAGE FUND - SERIES I
Debt / Income based products-The debt based funds that are in operation now, are as follows -
Balanced funds - The balanced funds that are in operation now, are as follows -
2.6 GROWTH
Branch expansion:
Market share in branches has increased to 14.48% from 13.70%. during the year, ATM network was
expanded to 8,581 ATMs, up by44%.
Market share in aggregate deposits has increased from 15.41% in March 08 to 17.72 % in March 09
Market share in advances has increased from 15.20% in March 08 to 16.03 % in March 09.
Home Loans
Sanctioned Rs. 2,348 crore under New Happy Home loan Scheme (8% interest rate for first year) till Mar
09; scheme extended to Sep 09.
Share in incremental loans among banks is 46.62% till Feb ’09
Auto Loans
Market share increased to 12% of new vehicle sales from 10% (source: SIAM)
Tie-up entered with Tata Motors Ltd, for Tata Nano bookings
Tie-ups existing with Maruti and Hyundai as well
Growth is significantly higher than closest competitor (22%)
Rural Business
The Bank strongly believes in ‘Financial Inclusion’ and has set itself the mission of being the
‘Banker to every Indian’ household.
17,979 Customer Service Points / BCs / BFs are in place to cater to 52,782 previously unbanked
villages
Scaling up branch network; 481 branches added in rural and semi-urban areas in FY 09 taking the
total to 7,696;
47
ATM network in rural and semi-urban areas increased to 3,800.
Plans in place to cover an additional 50,000 villages in FY 10.
Enhancing loan processing capacity by setting up additional rural central processing centres – 158
in place by March 2009, which is being expanded to 300 by March 2010.
Using technology to cover unbanked villages and increasing financial inclusion through Internet
Kiosk, Mobile banking.
Number of Self-Help Groups financed surpassed 1 million during FY09.
Agricultural Debt Waiver and Debt relief scheme.
Total amount involved under Agricultural Debt Waiver and Debt relief scheme is around Rs
10,200 crore.
The expected claim from the government will be Rs 6,600 crore.
Claims filed thus far is Rs 5,287 crore, of which Rs 2,168 crore has been already received.
Around 42 lac farmers benefitted under the Scheme.
Loss of interest is Rs 188 crore; However, this has resulted in an NPA reduction of Rs 1,500
crore
International Loans
Loan book in USD terms has grown from USD 14.49 Bn to USD 17.05 Bn (17.7%);
Rupee depreciation accounts for the rest of the growth.
PROFITABILITY – FY 09
Net Profit increased by 35.55% to Rs. 9121.23 crore in FY 09.
NII increased by 22.63% during FY 09 to Rs. 20873 crore from Rs.17,021 crore in FY 08
Interest income on advances increased by 31.76% during FY 09 over FY 08 driven by growth and
increase in yields.
Interest expense on deposits increased by 40.13 % over FY 2008.
NIM at 2.93% in March 09 vs. 3.07% in March 2008.
Other income increased by 45.96% to Rs. 12,691 crores in FY 09.
Core fee income increased by Rs.1703 crore, an increase of 29%.
Operating expenses increased by 24% to Rs. 15,649 crore, mainly on account of higher provisions
for salary revision and for pensions.
100% rollout of core banking system covering all branches and 100% of business – the largest
such system in the world.
.
PROFITABILITY – Q4 FY 09
Net Profit increased by 45.62% to Rs. 2742.43 crore in Q4 FY 09.
48
Interest income on advances increased by 25.83% during Q4 FY 09 over Q4 FY 08 driven by
growth and increase in yields.
Interest expense on deposits increased by 53.47% over Q4 FY 08.
Other income increased by 67.49% in Q4 FY 09.
Operating expenses increased by 31.98% to Rs. 4283 crore;
3 DEPARTMENTS-
Global Market Department at the corporate centre handles the Bank treasury operations across all time
zones and covers activities in various Market-
49
Forex Market.
Interest Rates.
Bullion.
Equity.
Alternative Assets.
The group handles about 42% of the total C&I nonfood advances of the bank. It operates through 8
regional offices and 53 branches.
National Banking group consist of three business group viz. Personal banking, small and medium
enterprises and government banking and handles 34.41% of total domestic credit and 59.21% of total
domestic deposit business of the bank as on 31-03-2009.
Rural business group deals with the business of the bank at all rural and semi urban centers.
It now handles a deposit portfolio of Rs 2, 15,931 crores and credit portfolio of Rs1, 20,617 crores which
is 32% and 26%of the banks total domestic deposit and credit portfolio respectively as on 31-03-2009.
Consistent efforts by the Bank have resulted in emergence of Cross-Selling as an important source of
income.
Initiatives taken by the Marketing-
50
Cross Selling Dept. has earned the Bank an income of Rs.166.45 crores during the financial year ending
March 2009 despite the adverse economic scenario.
The New Businesses Department was created to formulate strategies for new businesses, incubate new
business initiatives, pilot the same and on stabilization, handover to the concerned Business Group.
Various new businesses like Pension Fund Management, General Insurance, Private Equity, Financial
Planning & Advisory Services (FP&AS), Custodial Services, Payment Solutions, Depository Participant
Services and On-line trading have been initiated by the department.
The Bank at the year-end had a network of 92 overseas offices spread over 32 countries covering all time
zones. The 92 offices comprised 37 Branches, 5 Sub Offices, 8 Representative Offices, 35 Branches of
Subsidiaries, 3 Managed Exchange Companies and 4 Joint Ventures. The asset level of Foreign offices
and subsidiaries was US$ 23.73 billion registering a growth of 20% over last year. Foreign Offices
earned a net profit of US $ 151 million during the year.
The Bank has been proactive in responding to the opportunities thrown open by evolving technology and
increasing technology penetration. Technology has been used innovatively for achieving financial
inclusion and technology driven banking solutions have been implemented to achieve enhanced customer
satisfaction.
Networking: More than 2000 branches were added to wide area network during the year. Presently all
the branches and ATMs of the Bank are networked. The network plays a major role in supporting the
Bank’s business applications and is capable of carrying data voice and video in a secure manner.
Core Banking: The Bank achieved full Core Banking status on 23.07.2008 when all the branches of the
Bank were made functional on CBS.
Internet Banking: With enabling of over 2100 branches for internet banking, all the branches of the
Bank are now internet banking enabled.
ATMs: The Bank, along with its Associate banks have a common ATM network which is the largest in
the country.
Payment Systems Group: All the branches of the Bank have been enabled for RTGS and NEFT
transactions.
Mobile Banking: The Bank has launched its mobile banking facility which offers various features like
Funds Transfer using NEFT, Enquiry Services (balance enquiry / mini statement), Request Services
(cheque book request), m-commerce (Mobile Top Up, merchant payments, SBI Life Insurance premium)
and bill payment (utility bills, credit cards).
Data Warehouse Project: Implementation of Enterprise Data Warehouse is under progress.
Information Security: The Bank has a robust IT policy and Information System (IS) Security policy
which has been benchmarked against global best practices.
The Business Intelligence Department in the Bank constantly assesses upgrades and fine tunes the
growing information requirements of various user departments and business units. The information takes
care of both decision support as well as statutory requirements. The Data Warehousing Project, designed
to be a single source for all data requirements, is also progressing satisfactorily.
51
The staffs who displayed understanding of the challenges of achieving excellent customer service which
alone will enable the Bank to continue to maintain its leadership position in future, were overwhelmingly
of the opinion that the Bank’s vision should focus primarily on customer service.
The Bank complied with the statutory requirements relating to the Official Language policy and made
several efforts to deliver its products and services to the masses in Hindi and other Indian languages.
These include installation of bilingual software in its 11448 Core Banking branches during the year
which enabled customers to get their pass books, statements of account and other reports in Hindi. In
addition to this, the number of hits on ATMs in Hindi reached 46 lakhs and in other Indian languages, 39
lakhs per month as a result of efforts made by the Bank to provide its services in Hindi and other Indian
languages to its customers.
The Bank has put in place, a Board approved revised policy on Know Your Customer (KYC)/ Anti
Money Laundering (AML)/Combating the Financing of Terrorism (CFT) measures in line with the
guidelines issued by Reserve Bank of India on the subject. Monitoring of Transactions is done with a
view to submit the required reports to Financial Intelligence Unit-India mandated by rules of Prevention
of Money Laundering Act, 2002.
52
4) There is no clear training policy for identifying training needs and training.
5) Marketing department has very less focus on sales and business development
4 .SWOT ANALYSIS
4.1 Strength-
53
1. Good Brand Name because it is related to central government and people can trust the
bank. They give good facilities to customers.
2. Nationwide networking of branches. In every state and in every district there are SB
branches. The total work done by using internet. Online facility is also available in SB.
3. Multiple product & service. It is related to all SB where you get the facility of taking
money in any ATM. It provides online banking also.
4. More number of customers all over the World because everyone trust SB.
5. Internet Banking & recent trends of banking. It provides online banking where you can
transfer money from one account to another account. You can use for shopping purpose
etc.SBH has got adequate ATM’s throughout India.
4.2 Weakness-
1. No separate branch for SBH life and SBH mutual Fund. It depends on SBI.
3. Comparing to some private banks, SBH has less modernization of infra structure.
4. Since more employees are working, the interference of trade union is yet another constraint.
4.3 Opportunities-
1. Large potential Market due to pickup in economic activity.
54
3. Massive marketing and Massive customization
4. Chances for increasing more investment avenues and designing various schemes for the
customers. Thereby, all the people all over India will be a customer one way or other.
4.4 Threats-
1. Huge competition due to private banks and lot of competitors. They provide lot of facilities
comparing to government banks.
5.1 FINDINGS-
1. SBH is offering a large diversity of product which are innovative and in line with latest
technology and customer preference. Its contribution towards society in terms of product and
service offered is appreciable.
2. The SBH has a unique brand image in the eyes of investors and depositors. This offers a
platform to expand its market share.
4. The implementation of information security with the global best practices will help the
organization to build a strong customer loyalty.
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5.2 CONCLUSION-
Being a huge government sector central bank SBH. in association with parent SBI along with other
subsidiary banks it has got enormous resources at its disposals to give wide range of servies to the
customers As for my report on, “ORGANIZATIONAL STUDY AT SBH” is concerned it is really an
enhancing experience for me in so many ways. In fact I can rightfully claim to have achieved my
predetermined objective.
.
5.3 RECOMMENDATION-
1. To increase the profitability of bank they may aim at reducing the cost of its deposits.
2. The investment portfolio of the bank may be enhanced for increasing yield on the assets.
3. Majority of the older employee lacks sufficient soft skill hence they should be trained in order to
increase efficiency of work.
4. There is need of better customer relationship management & awareness program to make the customer
aware about all product and service.
5. There should be minimum documentation and speedy transactions.
6. Need for establishment of better industrial relation in order to deal with formation of trade unions and
achieving higher efficiency of employees.
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7. Modernization of infrastructure through benchmarking the global best practices in order to achieve
customer attention and loyalty.
8. Need for consistency and growth in technology in order to keep up position and deal with competition.
9. Quick implementation of enterprise data warehouse.
Bibliography
Books:
1. L.M. Bhole. Financial Institution and Markets. 4th Ed. Tata McGraw-Hill Publishing
Company Limited, Delhi, 2004, pp3.1-3.4.
Journals:
1. M. Srinivas Narayana.(2009) “A study of social responsibility of commercial banks”,
Finance India, March, No XXIINO1.
Website:
1. Dr. Tracy McPherson (2007) “Workplace SBI Survey Reports: An assessment of
employer Practices and vendor products and services”. accessed on 04/07/2009 at
http://researchandmarkets.com/reports/837818.html
2. “SBI Mutual Fund”. accessed on 09/072009 at
http://businessmapsofindia.com/mutualfunds/firms/sbi.htm.
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