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Project Report on the State Bank of

India (SBI)
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An exclusive project report on the State Bank of India (SBI). This report
will help you to learn about:- 1. Constitution of the State Bank of India
2. Organisational Structure of the State Bank of India 3. Objectives 4.
Functions 5. Working or Achievements.

Contents:

1. Project Report on the Constitution of the State Bank of India

2. Project Report on the Organisational Structure of the State Bank of India
3. Project Report on the Objectives of the State Bank of India
4. Project Report on the Functions of the State Bank of India
5. Project Report on the Working or Achievements of the State Bank of
India

1. Project Report on the Constitution of the State Bank of India:

The original name of the State Bank of India was Imperial Bank of India.
The Imperial Bank of India was formed in 1921 by amalgamating the three
Presidency banks of Bengal, Bombay and Madras. Prior to Independence, the
Imperial Bank was handling the entire business and banking transactions of
the Government.

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Though the Reserve Bank of India had been established in 1935, it was
undertaking only central banking functions. Therefore, the Imperial Bank
continued to handle Government transactions. On the recommendations of
the All India Rural Credit Survey Committee (1954‘, the Government of
India nationalised the Imperial Bank of India and renamed it as the State
Bank of India with effect from 1 July, 1955.

Further, eight banks of the former princely States were brought under the SBI
as its subsidiaries in 1959. They were State Bank of Bikaner, State Bank of
Jaipur, State Bank of Patiala, State Bank of Saurashtra, State Bank of Indore,
State Bank of Hyderabad, State Bank of Mysore, and State Bank of
Travancore. In 1963, State Bank of Bikaner and State Bank of Jaipur were
merged as State Bank of Bikaner and Jaipur.

2. Project Report on the Organisational Structure of the State

Bank of India:
The SBI is not a bank wholly owned by the Government. It is a corporate
body with an authorised share capital, of Rs.1000 crore and paid-up capital
of Rs.526 crores of shares of Rs.10 each as on 31 March, 1998. The apex
body in the organisational structure of the SBI is the Central Board of
Directors, which consists of a Chairman, two Managing Directors and 17
Directors appointed/elected under Section 19(1‘ of the State Bank of India
Act, 1955.

The Chairman and the Managing Directors are appointed by the Central
Government in consultation with the RBI for a period not exceeding five
years. Out of 17 Directors 6 are ex-officio representing different
organisations, 4 are elected by the shareholders, 6 are nominated by the
Central Government and one is nominated by the RBI. To manage the
different Departments of the Bank, there is a Central: Management
Committee which has ten members consisting of the Chairman, two
Managing Directors and seven Deputy Managing Directors.

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The Chairman is the ex-officio member of the Committee. All the Deputy
Managing Directors function under the overall charge of the Managing
Directors. During 1995-96, several organisational changes have been carried
out in the areas of structure, systems and-strategies of the SBI.

Lean and integrated top management now consists of the Chairman, group
executives for National Banking Group, Corporate Banking Group,
International Banking Group and Associates and Subsidiaries Group and four
staff functionaries in charge of financial, credit, human resources and
technology management, and inspection and audit.

Three Strategic Business Units (SBUs‘ have been set up under the Corporate
Banking Group to focus attention on very large corporate customers, lease
finance and project finance. They are the Corporate Accounts Group,
Leasing Group and Project Finance Group. Each SBU has been given profit
responsibility.

A committee approach has been adopted, both at the apex and circle levels
for sanctioning large advances. For this purpose, Central Office Credit
Committee and Circle Credit Committees have been set up. They have been
delegated higher financial powers to ensure faster decision-making of credit
disposals. At the circle level, Commercial and Development and Personal
Banking Networks have been created under the charge of General Managers
to cater to the client-specific banking needs.

3. Project Report on the Objectives of the State Bank of India:

The State Bank of India was established with the following specific
objectives:

1. To have a strong commercial bank under the control and supervision of the
Government.
2. To spread banking facilities in rural, semi-urban and metropolitan areas by
opening 400 branches within five years of its establishment. This policy of
branch expansion has since been continued.

3. To help spread banking in rural areas for the purpose of encouraging and
mobilising savings among the ruralists and to provide credit to them.

4. To subscribe to the debentures of State Land Development Banks and to

advance loans on their security.

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5. To strengthen co-operative societies, help in the establishment of licensed

warehouses arid co-operative marketing societies.

6. To provide financial assistance to small, cottage and village industries.

7. To help other banks and strengthen the banking system.

8. To help the RBI in implementing its monetary and credit policies.

4. Project Report on the Functions of the State Bank of India:

The State Bank performs the following functions:

1. Central Banking Functions:

The SBI performs a number of functions on behalf of the Reserve Bank of

India.

(a‘ It acts as the agent of the RBI where the latter has no branch,

(b‘ It receives money on behalf of the Central and State Governments and
makes payments on their behalf,
(c‘ It buys and sells securities on behalf of the Government and manages the
public debt,

(d‘ It receives deposits from commercial banks and state cooperative banks
and in turn lends to them,

(e‘ It provides remittance facilities to these banks.

(f‘ It rediscounts their bills of exchange,

(g‘ It acts as a clearing house at places where the RBI has no office.

2. Accepts Deposits:

The State Bank accepts deposits of all kinds from the Indian public and NRIs
in rupees and foreign currencies.

3. Gives Loans and Advances:

It gives loans and advances against an eligible security including goods, bills
of exchange, promissory notes, fully paid shares and debentures or other
securities of a civil authority, etc.

4. Invests and Borrows:

The SBI invests in Government securities and borrows from the Reserve
Bank.

5. Deals in Bills of Exchange:

The State Bank draws, accepts, discounts, buys and sells bills of exchange
and deals in letters of credit payable in and outside India.

6. Deals in Gold and Silver:

The SBI buys and sells gold and silver. In June and July 1991, it sold gold to
the Swiss Bank and pledged gold to the Bank of England on behalf of the
Reserve Bank.
7. Deals in Foreign Currencies:

The SBI is an authorised agent for dealing in foreign currencies. As such, it

exchanges foreign currencies in Indian rupees and rupees into foreign
currencies.

8. Acts as Agent:

It acts as the agent of any registered co-operative bank.

9. Business on Commission:

The State Bank transacts pecuniary business on commission.

10. Underwrites Issues:

It underwrites issues of stocks, shares, debentures and other securities in

which it is authorised to invest.

11. Capital Stock of Banking Company:

It can subscribe to, buy, acquire, hold and sell any shares in the capital stock
of any banking company.

12. Form Subsidiary:

It can form any banking company as its subsidiary or take over any banking
company on the direction of the Reserve Bank.

13. Hire Purchase Companies:

It is authorised to make loans and advances to firms and companies engaged

in the financing of hire-purchase transactions on the security of book debts,
etc. subject to the approval of the Central Board.

14. Housing Schemes:

The State Bank is authorised to act as an agent of the Central Government, a

State Government or any corporation in implementing schemes for financing
the construction of houses and manage the funds placed at its disposal for
this purpose.

15. Finances Foreign Trade:

The SBI finances the foreign trade of the country.

5. Project Report on the Working or Achievements of State Bank

of India:
The State Bank of India is the biggest commercial bank in the country with
the largest number of branches and offices in India and abroad. Since its
nationalisation in 1955, its working reveals that it has made tremendous
progress in deposits, advances, rural credit, industrial finance, priority
sectors, merchant banking, mutual fund, housing finance, factoring etc.

We discuss below its role and importance as the leading commercial

bank of the country.

A. Banking Trends:

1. Paid-up Capital and Reserves:

There has been a phenomenal growth in the paid-up capital and reserves of
the State Bank over the years. From mere Rs.12 crores in 1955 and Rs.20
crores in 1969, they had risen to Rs.9,608 crores as at the end of March 1998.

2. Deposits Growth:

The SBI has made great efforts towards deposit mobilisation. In absolute
terms, they increased from Rs.226 crores in 1955 to Rs.131,091 crores in
1998.

3. Credit Expansion:
The Bank has expanded much its policy of giving loans and advances for
food and non-food purposes. The overall amount of advances increased from
Rs.106 crores in 1955 to Rs.841 crores in 1969 to Rs.74,237 crores as on
March, 1998.

4. Investments:

Its investments in Government securities also show considerable growth. In

absolute amount, they increased from Rs.117 crores in 1955 to Rs.350 crores
in 1969 and to Rs.54,982 crores in March, 1998.

5. Branch Expansion:

Since its nationalisation in 1955, the SBI has been successfully carrying on
its policy of branch expansion. Its number of offices including foreign offices
increased from 497 in 1955 to 8,979 in June 2003. Along with branch
expansion, the number of employees also increased from 14,682 to 2,33,000
over the period.

6. Other Highlights:

Its credit-deposit ratio was 47 per cent in 1995 which increased to 62 per cent
in 1996. Its capital adequacy ratio was 13.50 per cent in 2002-03 well above
the stipulated 9 per cent.

B. State Bank of India and Agricultural Finance:

The State Bank of India is a pioneer in the field of agricultural finance. In

fact, it has been a pace setter for other banks in rural banking.

It has been helping in providing rural finance in the following ways:

1. Branch Expansion:
At the time of nationalisation, the State Bank was required to open not less
than 400 branches within five years of its inception mainly in rural and semi-
urban areas. In fact, it opened 416 branches during the stipulated period.
Since then it has kept up the tempo of branch expansion with the result that
at the end of June, 2003, it had 4,098 branches in rural areas which formed
about 46 per cent of its total branches in the country.

2. Remittance Facilities:

With the spread of a network of branches in rural areas, the SBI has been
providing cheap remittance facilities to State and Central Co-operative
Banks, Land Development Banks, farmers and traders.

3. Help to Co-operative Banks:

The SBI has been of great help to co-operative and land development banks
engaged in providing rural credit. It grants short term credit to the State and
Central Co-operative Banks against Government securities at a concessional
rate. It also grants advances to these banks for financing marketing of
agricultural produce, distribution of fertilisers, and procurement of food
grains.

4. Help to Land Development Banks:

The State helps the Land Development Banks which provide long term credit
to agriculturists in the following ways: The SBI subscribes to the debentures
of LDBs and grants them loans and advances on the security of such
debentures. It also gives advances to them for a short-term on the guarantee
of the State Government, pending flotation of debentures by them.

5. Credit to Co-operative Marketing and Processing. Societies:

It provides direct credit to co-operative marketing and processing societies

for working capital requirements. This help is given when they are unable to
get financial assistance from Central/State Co-operative Banks. The
marketing societies are given advances against the pledge of their
goods/produce to the SBI till they sell the produce in the market. Similarly,
the Bank grants loans to co-operative processing societies engaged in the
processing of sugar, jute, cotton, etc.

6. Production Finance:

The SBI provides short term credit to individual farmers for raising of crops.

7. Finance for Irrigation:

The Bank has been extending assistance by way of term loans to various
minor irrigation projects, command area development schemes, dug-well and
tube-well sinking projects, etc. Besides, under the Special Project Agriculture
sponsored by the Rural Electrification Corporation for energisation of pump
sets. The Bank has also been financing drip irrigation scheme which involves
application of adequate water to the plant root at definite intervals, thereby
ensuring efficient management of limited water resources.

8. Modernisation of Farm Practices:

The SBI provides finance to farmers from raising agricultural productivity

through modernisation of farm practices.

9. Wasteland Development:

The Bank extends credit facilities to farmers for reclaiming wastelands under
social forestry schemes, for raising nurseries and planting trees to meet the
raw material requirements of fuel and fodder. It also provides credit for
setting up plantations in order to meet the raw material requirements of user
industries, joint sector undertaking, companies, co-operatives and individual
entrepreneurs.
10. Financing of Warehouses:

The establishment of warehouses helps in the marketing of agricultural

produce by farmers. The SBI has been associated with development of
warehouses in a number of States. It also gives advances to farmers against
warehouse receipts thereby preventing distress sales on the part of growers
and provides a cushion against violent fluctuations in the prices of farm
produce. Warehouses help in storing farm products and prevent their
wastage.

11. Financing of Fisheries:

The SBI finances fisheries schemes for increasing fish production to meet the
domestic demand and export potential.

12. Financing of Other Activities:

The SBI also provides financing assistance to special agricultural activities

such as animal husbandry, cattle breeding, dairy farming, piggery, poultry
farming, horticulture, sericulture, vermi-culture, tissue-culture and
mushroom cultivation and high-tech agriculture. During 1995-96, the Bank s
advances to agriculture and allied activities amounted to Rs.6,749 crores.

13. Service Area Approach:

Under the Service Area Approach introduced from 1 April, 1989,86 per cent
of the Bank s branches had implemented village credit plans in 1,12,064
villages allotted under SAA. The Bank s branches had also to finance non-
target group of borrowers in 54,353 villages allotted to branches of Regional
Rural Banks sponsored by the RBI, but falling outside the service areas of
the branches of the Bank. Under the activity-wise Special Credit Plan, the
Bank disbursed Rs.2,706 crores during 1995-96.

14. Integrated Area Approach:

Since 1971, the SBI has been laying emphasis on an integrated area approach
with developing compact areas where economic growth could be accelerated
with the Bank s support, preference being given to areas which are backward
and where special schemes of the Government have been taken up.

In keeping with this approach, the SBI has started the Village Adoption
Scheme. Under this scheme, the Bank adopts a village, fixes a target and
meets the entire financial needs of the village including its farmers, artisans
and others.

15. ADBs and ABDs:

The State Bank has Agricultural Development Branches (ADBs‘ and

Agricultural Banking Divisions (ABDs‘ in selective areas particularly
included in IRDP, HYVP and IAAP areas. The aim is to finance all-round
development of agriculture. The Bank works in close co-operation with
NABARD.

16. RRBs:

The Bank also finances rural activities through the Regional Rural Banks. It
has sponsored 30 RRBs in 14 States covering 76 districts with a network of
2,385 branches. Under the first phase of restructuring, 8 SBI-sponsored
RRBs were covered. In the second phase, 9 RRBs have been covered.

Conclusion:

The State Bank has been a pioneer in agricultural finance in the country. It
has been providing direct as well as indirect credit facilities to farmers,
artisans, marginal farmers, and weaker sections of rural India.

C. State Bank of India and Industrial Finance:

The State Bank of India occupies the premier position in providing finance to
large/medium, and small scale industries.
The type of financial assistance being rendered to them is as under:

1. Financing Large/Medium Scale Industries:

The Bank has been financing medium/large scale industries on a selective

basis. On the one hand, it has been financing new ventures of industrial
groups with a good track record and on the other, new generation
entrepreneurs with viable ventures. During 1995-96, the Bank s industrial
advances were Rs. 8,298 crores.

The Bank has been making loans and advances to such industrial groups as
iron and steel, coal, electricity generation, chemicals, cement, petroleum,
engineering, cotton textiles, food processing, gem and jewellery, paper
products, etc.

(a) Industrial Finance Branches (IFBs):

To strengthen infrastructure for catering to medium/large industries, it has

set up 9 IFBs at important centres.

(b) Monitoring of Credit:

The Bank has been making special efforts for monitoring of credit by
exposing the officials to different training programmes, including on-the-job
training at the apex level.

(c) Industrial Rehabilitation:

The SBI set up a separate Department of Industrial Rehabilitation in 1990-91

to deal with sick and financially weak units and to rehabilitate them. Its main
thrust towards this direction has been to extend nursing assistance to the sick
units, mainly under the aegis of the Board for Industrial and Financial
Reconstruction (BIFR‘. At the same time, speedy disposal of cases which are
not amenable to nursing has been achieved through compromises, recoveries,
write-offs and mergers with healthy companies.

So far, 101 out of the 351 rehabilitation packages drawn up for assisted units
under the direction of BIFR have been put in operation, and 51 companies
ordered to be wound up during the year.

(d) Infrastructure Development:

For financing infrastructure projects, the Bank assisted 9 independent power

projects envisaging Rs.2,276 crores. The Bank also sanctioned Bid Bond
guarantees to enable 8 companies bid for Basic and Cellular services during
1995-96.

2. Financing of Small Scale Industries:

The State Bank has been meeting the growing needs of the small scale sector
by providing credit facilities on liberal terms. Its financial assistance covers
all stages of manufacturing, viz. working capital, purchase of raw materials,
marketing, entrepreneurial assistance, etc. It also covers expansion and
modernisation of plants and equipment.

Smaller units predominate the Bank s portfolio of small scale industries and
about 66 per cent of the small industrial units financed by the Bank have
limits below Rs. 25,000. The Bank s outstanding advances to small scale
units stood at Rs.7,790 crores at the end of March, 1996 and the number of
units financed was 10 lakh.

(a) Equity Fund:

To provide equity support to small scale units, the Bank operates its Equity
Fund Scheme. Under this scheme, it provides interest free loans, repayable
over a period of 5-7 years with an initial starting period. Equity support is
provided up to Rs.1 lakh to deserving entrepreneurs setting up new small
scale units and up to Rs.50,000 to professionals and self-employed persons.

(b) Entrepreneur Scheme:

Under this scheme, the Bank finances technically qualified persons and
experienced craftsmen up to Rs.10 lakhs for starting new projects. Assistance
up to Rs.2 lakhs is made available free of margin. Where project cost
exceeds Rs.2 lakhs, margins ranging from 5 to 12.5 per cent are required to
be contributed by the entrepreneur.

(c) Consultancy Cells:

The Bank has Consultancy Cells which provide management consultancy

support to small scale units and technical guidance to operating staff. These
Cells are also actively engaged in the work relating to technology
upgradation. Officials of the Cell are trained to act as nodal points for
collecting and making available necessary information relating to the
industry, including techno-economic aspects.

(d) Entrepreneurial Development Programme:

The Bank conducts entrepreneurial development programmes in the

backward districts and its lead districts to motivate first generation
entrepreneurs to set up risk-bearing ventures.

(e) Rehabilitation of Sick Units:

Under the guidance of its Department of Industrial Rehabilitation, the Bank

identifies sick small units and formulates expeditious nursing programmes
for the viable units. So far about 90 per cent of the total viable small scale
sick units in the Bank s books have been placed under suitable rehabilitation
programmes. The Bank has also initiated steps for upgradation of technology
of selected groups of small scale industries to make them more competitive.
(f) Technology Upgradation:

The Bank has a separate Department of Systems and Technology which set
up the Industrial Technology Group (known as UPTECH Group‘ in 1988.
This Group directs and guides programmes aimed at facilitating technology
upgradation in the small scale industrial sectors. For this purpose, the Bank
has set apart Rs.2 crores to form a Technology Data and Information
Services Centre Fund.

The UPTECH group has taken up location and industry-specific

programmes. Upgradation of products and processes are attempted in these
programmes to bring about quality control, increased productivity and
efficiency. The Bank offers packages of assistance to units which wish to
implement the technological upgradation programmes.

(g) Small Business Finance:

The Bank also provides finances to small business enterprises which include
retail traders, transport operators, professionals and others. The main
objective of the Bank has been to increase opportunities for self-employment
in the tertiary sector. The Bank s advances to small business units amounted
to Rs. 2,414 crores covering 25 lakh accounts at the end of March 1996.

Conclusion:

The above analysis reveals that the State Bank has been playing a vital role
in financing large scale industries. But its contribution in supplying loans and
advances, in providing equity funds, in modernisation, in helping to supply
inputs, in marketing, etc., to small scale industries and small business has
been immense. No other commercial bank in the country is in a position to
compete with it.

D. Other Achievements of the State Bank of India:

Other achievements of the State Bank spread to a wide range of
activities which are discussed as under:

1. Assistance to Weaker Sections of Society:

The Bank has been carrying out a number of schemes to assist the weaker
sections of society so that they are provided gainful employment
opportunities and are able to raise their income levels.

Some of the schemes are:

(i) Integrated Rural Development Programme:

The Bank is actively engaged in alleviating rural poverty under the

Government sponsored IRDP. It assists the rural poor in acquiring income-
generating assets. Since the inception of the Programme in 1980 the
cumulative disbursement of the Bank up to March, 1996 amounted to
Rs.2,195 crores covering 61.55 lakh beneficiaries.

(ii) Differential Rate of Interest (DRI) Scheme:

Under this scheme, the Bank has been providing financial assistance at a
concessional rate of interest of 4 per cent to persons belonging to the weaker
sections of society who are engaged in productive activities. At the end of
March, 1996, the Bank s DRI advances stood at Rs.1,443 crores. Over 60 per
cent of the Bank s DRI advances were made to SC/ST and women
beneficiaries, exceeding the stipulation of 40 per cent laid down by the
Government involving Rs.248 crores.

(ii) Twenty-Point Programme:

The Bank has achieved considerable progress under the restructured Twenty-
Point Programme which mainly aims at raising agricultural productivity,
eradication of rural poverty and ensuring justice to the underprivileged
sections of the society.

As at the end of March 1996, the Bank s aggregate loans under the
Programme stood at Rs.4,142 crores covering 95 lakh borrowal accounts.
The major chunk of Bank s assistance has been in the spheres of attack on
poverty, needs of SC/ST borrowers, strategy for rainfed agriculture, better
use of irrigation water, bigger harvests, energy for villages, etc.

(iii) Scheme for Urban Micro Enterprises:

The Scheme which is a component of the Jawahar Rozgar Yojana, was

introduced in 1990. The scheme aims at encouraging the unemployed and
underemployed urban poor living below the poverty line in metropolitan
areas, cities and towns with population exceeding 10,000, to take up self-
employment ventures with the help of Bank loans and Government subsidy.

(iv) Prime Minister’s Rozgar Yojana:

The Prime Minister s Rozgar Yojana was launched on 2nd October 1993 to
help educated unemployed youth in establishing self-employment ventures.
The Bank financed 68,889 beneficiaries to the tune of Rs.375 crores during
1995-96.

(v) Total Assistance to Weaker Sections:

At the end of March 1996, the Bank s total advances to weaker sections such
as SC/ST, small and marginal farmers, landless labourers, including
beneficiaries under IRDP and DRI Schemes amounted to Rs.3,886 crores.

2. Community Services Programmes:

The Bank has a number of Community Services Programmes which aim at

closer identification with various strata of society, especially the weaker
ones, such as women, slum-dwellers, physically handicapped, victims of
natural calamities, ex-prisoners, orphans, ex-defence personnel etc.

Financial assistance is provided under these Programmes for self-

employment and rehabilitation of the beneficiaries. As at the end of March
1996, aggregate financial assistance rendered by the Bank under various
community services programmes amounted to Rs.317 crores spread over 11
lakh beneficiaries. Under the 15-Point Programme on minorities welfare, the
Bank disbursed Rs.372 crores to 5 lakh beneficiaries in 41 identified
districts.

3. Area Development:

The State Bank has been successfully carrying out its responsibility of the
development of districts under the Lead Bank Scheme. As on March 1996,
the Bank had lead responsibility in 113 districts in different parts of the
country where it had been acting as a catalyst agent of banking and rural
development. Under the Annual Action Plans for 1995-96, the Bank had
extended Rs.464 crores as credit and under the Annual Action Plans for non-
lead districts, the credit extended amounted to Rs.3,052 crores.

4. Development of Backward Areas:

The Bank lays special emphasis on the balanced development of different

regions, with greater emphasis on the development of backward districts.
More than 46 per cent of the Bank s direct agricultural advances are in
backward districts, covering over 51 per cent of the borrow accounts.

The Bank has also been assisting in the creation of self-employment

opportunities as well as industrial development of backward districts in the
country. About 50 per cent of the small scale industrial units and 55 per cent
of the transport operators assisted by the Bank are in the backward districts.
Of the small business units financed by the Bank, 50 per cent are in
backward areas, amounting for 48 per cent of the total quantum of assistance
provided to the small business sphere. Out of the 187 Entrepreneurial
Development programmes organised by the Bank so far, 118 have been
conducted in the backward districts.

5. Export Finance:

The Bank has been providing larger credit facilities to exporters and also
promotional and development support to them at the national level. The total
export credit provided by the Bank amounted to Rs. 6,955 crores as at the
end of March, 1996. The share of export credit in Bank s total credit was
12.4 per cent which was higher than the export credit target of 10 per cent
laid down for banks by the RBI.

Among the promotional measures taken by the Bank was the creation of an
Export Promotion Fund, with an allocation of Rs.1 crore out of the Bank s
profits in 1987. The Bank has been actively associated with a number of
Export Promotion Councils relating to different commodities and with the
Ministry of Commerce, Government of India in streamlining the procedures
and to render speedy and smooth service to exporters.

Further, the State Bank is the sole commercial bank nominated by the
Government of India for implementing financial transactions under the lines
of credit extended by the Government of India to various countries. The
Bank also administers Gold and Silver Jewellery Export Promotion Schemes
as a canalising agency on behalf of the Government of India.

6. Merchant Banking:

The State Bank has been rendering merchant banking services to its
customers since 1972. But it was with the setting up of SBI Capital Markets
Ltd. in 1986, SBI Mutual Fund in 1987, SBI Home Finance Ltd. and SBI
Funds Management Ltd. that its merchant banking activities have spread
considerably. These subsidiaries promote merchant banking, equipment
leasing, venture capital finance, portfolio management services, hire-
purchase activity, housing finance activities, etc. In fact, the Bank is a
pioneer in the field of merchant banking and house finance.

7. Development of Debt Market:

With a view to further develop the debt market in India, the Bank has set up a
subsidiary called the SBI Gilts Ltd., to act as a Primary Dealer in
Government securities. During 1995-96, the Bank acquired controlling
interest in Dis-court and Finance House of India Ltd.

8. Factors and Commercial Services:

The Bank launched the SBI Factors and Commercial Services Pvt. Ltd.
(FACS‘ on 30 July, 1991 as a new subsidiary. The SBI has 54 per cent
shareholding in the subsidiary, the Small Industries Development Bank of
India 20 per cent, Union Bank of India 10 per cent, State Bank of Indore 6
per cent and State Bank of Saurashtra 10 per cent. The SBI has been allotted
the west zone for factoring.

The SBI FACS performs the function of discounting the bills of its customers
by buying invoices on a continuing basis. The customer prepays up to 80 per
cent of the value of the invoices immediately. The SBI FACS maintains the
sales ledger and performs the function of realising the invoices purchased.
All types of business organisations engaged in either manufacturing or
trading are eligible for factoring.

9. Human Resources Development (HRD):

The State Bank has been a pioneer in the field of HRD. As such,-it has been
focusing attention on development of job knowledge, skills and appropriate
attitudes of its employees. Manpower Planning, Performance Appraisal
System, Career Planning and Development, Organisation Development, and
Training and Research are the various tools used in the process of
development of human resources.
The Bank lays more emphasis on training its employees at all levels and
prepares them to meet the growing needs of the Bank in the context of
changing market scenario and environment. For this purpose, the Bank has
two training Staff Colleges at Hyderabad and Gurgaon, and the Institute of
Rural Development, Hyderabad and 55 Staff Training Centres.

In February 1990, it started the Institute of Information and Communication

Management in Hyderabad to spread computer education and information,
and communication management skills. In addition to the above institutional
training system, the Bank also has in-branch training arrangements in the
form of visiting faculty and on-site training.

10. Customer Services:

It has been the constant endeavour of the Bank to improve its service to the
satisfaction of customers. It has Customer Service Committees and Customer
Councils at almost all branches in important towns and cities. The Speed
line system introduced in 1986 now covers 209 centres. It expedites
collection, remittances and transfer of accounts of customers. The Bank
operates eight Customer Service Centres in different parts of the country
which receive and dispose customer complaints pertaining to all public sector
banks at the centres.

Tele-Service has been introduced at select branches to enable customers to

obtain information over telephone.

11. New Schemes for Customers:

The Bank has been a pace setter in introducing several new schemes for the
benefit of its customers. There are a number of schemes for grant of loans to
purchase consumer durables such as Big Buy, SCO-OM and Computer Loan.
The State Bank Card and the High Value Card Scheme have created a place
in the market.
There is the Travel-cash Scheme for granting loans to individuals for meeting
travelling expenses. Under the Cash-key Scheme, individuals making
deposits in the form of Term/Special Term Deposits, Cash Certificates,
Recurring Deposits with the Bank and in Magnum Certificates of SBICAP
can be granted simultaneous overdraft facility for drawing up to 75 per cent
of the amount of such deposit.

In order to cover investment counseling and portfolio management activities

under a single window service , Personal Investment Cells have been
established in a number of metropolitan and urban branches. On 4 May,
1992, the SBI launched the Stock-invest Scheme.

SBINET facility has been extended to all main branches, zonal offices and
regional offices of the Bank. 72 branches have been connected by SWIFT. A
fast cheque collection scheme has been introduced at major centres. ATM has
been installed at Mumbai, New Delhi, Kolkata, Bangalore, Patna and
Jamshedpur.

12. Overseas Operations:

The SBI is the foremost Indian bank with overseas operations and
international network. Its international network comprises 50 offices spread
over 34 countries. The Bank has established correspondent relations with
several established banks in six republics of CIS to increase trade relations
between India and CIS. In December 1992, the Bank set up the SBI Euro-
plan Bank Limited in London to exploit opportunities and meet the
challenges arising out of integration of markets in the European Community.

This subsidiary is engaged in wholesale banking. The Bank s other branches

advance loans to both the private and public corporate sector in order to
finance commodity and raw material imports into India. To serve the NRIs
better, the Bank has exclusive NRI centres in Flushing (New York‘ and in
Melbourne.
The Bank operates the SWIFT network in its ten foreign branches. The Bank
is empanelled as a consultant with the World Bank, the Commonwealth Fund
for Technical Co-operation, UK, the Food and Agricultural Organisation
(FAO‘ and the European Bank for Reconstruction and Development.

Conclusion:

The State Bank has been highly successful in its objectives in opening a
network of branches in rural and semi-urban areas. It has established itself as
the largest commercial bank of the country. Further, it has helped in
developing agriculture, small industry and business, and uplifting the weaker
sections and priority sectors through liberal credit facilities.

Besides, it operates a number of customer oriented services, engages in

export promotion and successfully carries out overseas operations.

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