Economic Environment and Business Implications

Project

NDIM
Batch: 2022-24

Name: CK Kshitij
Roll No. 22018
Section: F3

CBR Company: SBI Cards and Payments

Country allotted: Japan

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Part A: CBR Company Performance and Macroeconomic Variables
Part B: Business Opportunities in the allotted Country

Part A: Company Performance and Macroeconomic Variables

1. Company Introduction
SBI Card was launched in 1998 by the State Bank of India and GE Capital. Incorporated as
SBI Cards and Payment Services Private Limited (SBICPSL), SBI Card is headquartered in
Gurgaon, Haryana.

In December 2017, the State Bank of India and The Carlyle Group acquired GE Capital`s
stake in SBI Card. The company changed its legal name to SBI Cards and Payments Services
Limited in August 2019. In March 2020, SBI Card became the first pure-play credit card
company to list on the stock exchanges in India.

The aim of the SBI Card is to offer Indian consumers access to a wide range of world-class,
value-added payment products and services. Our endeavor is to simplify the lives of our
customers, employ,yees and other important stakeholders.

Our innovative products and services along with our responsible corporate citizenship
practices form the framework for delivering on this promise.

Within a short span of 10 months from inception, we achieved a credit card customer base of
1 lakh. We entered the '1Million Card Club’ in 2002 and crossed the 2 million card base in
2005.

Today, with over 15.5 million credit cards¹ in force, we are the second largest credit card
issuer in the country.

[1] Total cards outstanding as of December 2022

The Journey
In a span of 24 years, we have achieved numerous milestones. We have significantly
increased our card base, added new types of cards and received various awards and
recognitions for our performance, quality and service.

We are the second largest credit card provider in the country, with a base of over 15.5 million
cards in force.
We have a wide range of credit cards catering to diverse customer segments and changing
customer needs. This includes, super premium card, premium cards, travel and shopping
cards, classic cards, exclusive co-branded cards as well as corporate cards.
Our dedicated and customer-oriented approach has won us various industry accolades for
customer service, branding, product innovation and marketing.

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SBI Cards and Payments is a leading credit card issuer in India, offering a range of credit
cards that cater to the diverse needs of customers. The company is a subsidiary of the State
Bank of India (SBI), which is the largest bank in India and one of the largest in the world.

SBI Cards and Payments was incorporated in 1998 as a joint venture between SBI and GE
Capital. In 2017, GE Capital sold its entire stake in the company to SBI and CA Rover
Holdings, an affiliate of the Carlyle Group. Today, SBI and CA Rover Holdings are the two
primary shareholders of SBI Cards and Payments.

The company has a wide range of credit cards that offer benefits such as cashback, rewards
points, discounts on travel and dining, and more. SBI Cards and Payments has partnerships
with leading merchants across various categories, enabling customers to enjoy exclusive
discounts and offers when they use their credit cards.

SBI Cards and Payments has a strong focus on customer service, with a 24x7 customer care
center that provides assistance to customers across India. The company also has a robust
online presence, offering customers the convenience of managing their credit cards online.

Overall, SBI Cards and Payments is a trusted brand in the Indian credit card market, known
for its customer-centric approach and innovative product offerings.

Purpose:

To simplify the financial lives of our customers by offering innovative and convenient credit
card solutions.

Vision:

To be the preferred credit card issuer in India, known for our customer-centric approach,
innovation, and excellence in service.

Mission:

To provide our customers with a seamless and secure credit card experience, offering them
products that cater to their diverse needs and providing them with exceptional customer
service.

Values:

Customer Focus: We prioritize the needs and preferences of our customers and strive to offer
them the best possible solutions.
Integrity: We maintain the highest standards of integrity, ethics, and transparency in our
operations and dealings with all stakeholders.
Innovation: We continuously seek to innovate and improve our products and services to meet
the evolving needs of our customers.

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Teamwork: We collaborate and work together as a team to achieve our goals and deliver
exceptional customer service.
Agility: We are quick to adapt to changes in the market and regulatory environment to ensure
that we remain at the forefront of the credit card industry.

A brief introduction of the company, its business, and competitors.

SBI Cards and Payments is a leading credit card issuer in India and a subsidiary of the State
Bank of India (SBI), which is the largest bank in India. The company was incorporated in
1998 and offers a range of credit cards to cater to the diverse needs of customers. SBI Cards
and Payments has partnerships with leading merchants across various categories, enabling
customers to enjoy exclusive discounts and offers when they use their credit cards. The
company has a strong focus on customer service and has a 24x7 customer care center that
provides assistance to customers across India.

The primary business of SBI Cards and Payments is to issue credit cards to customers and
generate revenue through interest charges, annual fees, and transaction fees. The company
also earns revenue through partnerships with merchants, where it receives a commission for
every transaction made using its credit cards.

SBI Cards and Payments faces competition from other leading credit card issuers in India,
such as HDFC Bank, ICICI Bank, and Axis Bank. These companies also offer a range of
credit cards and have partnerships with leading merchants. Other competitors include
American Express, Citibank, and Standard Chartered, which are global players in the credit
card industry and have a presence in India.

Company’s performance vis-à-vis the industry and competitors

for the past 10 years

SBI Cards and Payments has shown strong performance over the past 10 years in the Indian
credit card industry, despite facing competition from other leading players. Here are some
key performance indicators for the company compared to the industry and competitors:

Credit card spends: SBI Cards and Payments has consistently recorded a high credit card
spend growth rate over the past decade. As of March 2021, the company's total credit card
spends stood at Rs. 1.02 trillion, recording a year-on-year growth of 24%. This growth rate
has been higher than the industry average.

Market share: SBI Cards and Payments has maintained a strong market share in the Indian
credit card industry. As of March 2021, the company had a market share of around 19%,
making it the second-largest credit card issuer in India. However, HDFC Bank has a larger
market share of around 27%.

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 Profitability: SBI Cards and Payments has shown consistent profitability over the past
decade, with its net profit growing at a CAGR of 29.5% between 2011 and 2021. The
company has been able to maintain a healthy net interest margin (NIM) and has also recorded
a low level of non-performing assets (NPAs).

Innovation: SBI Cards and Payments has continuously innovated its credit card offerings to
stay ahead of the competition. The company has introduced a range of co-branded credit
cards with leading merchants and has also launched digital credit cards and contactless
payments solutions.

In comparison to its competitors, SBI Cards and Payments has shown strong growth and
profitability, but it has a smaller market share than HDFC Bank. However, the company has
been able to maintain a strong brand and customer loyalty through its customer-centric
approach and innovative product offerings.

Regarding market share, SBI Cards and Payments is the second-largest credit card issuer in
India, with a market share of around 19% as of March 2021. However, it faces tough
competition from other leading players such as HDFC Bank, ICICI Bank, and Axis Bank,
which have a larger market share.

In terms of credit card performance, SBI Cards and Payments has consistently shown strong
growth in credit card spends and profitability. The company's credit card spends have grown
at a CAGR of around 30% over the past five years, outpacing the industry growth rate. The
company has also maintained a healthy net interest margin (NIM) and has a low level of non-
performing assets (NPAs). However, like any credit card issuer, the company's profitability is
subject to fluctuations in interest rates, economic conditions, and regulatory changes.

Overall, SBI Cards and Payments has shown strong performance in the Indian credit card
industry, with a focus on innovation and customer service. However, it faces tough
competition from other leading players in the industry, and its performance is subject to
various market factors.

2. Macro-indicators and company performance

There are several macro-indicators that can impact the performance of SBI Cards and
Payments. These include:

Economic growth: Economic growth is a key macro-indicator that can impact the
performance of credit card companies. Higher economic growth usually leads to higher

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consumer spending, which can result in higher credit card usage and revenues for the
company.

Interest rates: Interest rates can impact the profitability of credit card companies, as they
determine the cost of borrowing for customers. Higher interest rates can lead to lower credit
card usage and lower revenues for the company.

Regulatory environment: Changes in regulations can impact the credit card industry. For
example, changes in regulations related to fees and charges can impact the revenue streams
of credit card companies.

In terms of the company's performance, SBI Cards and Payments has shown strong growth in
credit card spending and profitability over the past few years. The company's total credit card
spending grew at a CAGR of around 30% between FY2016 and FY2021, and its net profit
grew at a CAGR of around 29.5% over the same period. The company has also maintained a
healthy net interest margin (NIM) and has a low level of non-performing assets (NPAs).

SBI Cards and Payments has a strong focus on innovation and customer service, which has
helped the company maintain a strong market position in the Indian credit card industry.
However, the company faces competition from other leading players in the industry, and its
performance is subject to various macroeconomic factors.

GDP Trend and Growth Rate

SBI Cards and Payments is primarily a credit card issuer and does not have a direct
correlation with the overall GDP trend and growth rate. However, the performance of the
credit card industry, in general, can be influenced by the overall state of the economy.

A growing economy with rising income levels, low unemployment, and stable interest rates
can lead to higher consumer spending, which can result in higher credit card usage and
revenues for credit card companies like SBI Cards and Payments. On the other hand, a
slowing economy with weak consumer sentiment, high unemployment, and volatile interest
rates can lead to lower consumer spending, lower credit card usage, and lower revenues for
credit card companies.

In recent years, India's GDP has shown a mixed trend, with growth rates varying between 6%
to 8% in the past decade. However, despite the fluctuations in the GDP growth rate, SBI
Cards and Payments has shown strong growth in credit card spends and profitability. The
company's total credit card spends grew at a CAGR of around 30% between FY2016 and
FY2021, and its net profit grew at a CAGR of around 29.5% over the same period. The
company has also maintained a healthy net interest margin (NIM) and has a low level of non-
performing assets (NPAs).

Therefore, while the overall GDP trend and growth rate in India can indirectly impact the
credit card industry and SBI Cards and Payments, the company's performance is also subject

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 to various micro and internal factors such as competition, innovation, customer service, and
regulatory environment.

Company Revenue and Revenue Growth Rate

SBI Cards and Payments is a publicly listed company and publishes its financial results
regularly. As per the company's latest annual report for the fiscal year 2020-2021, its revenue
was INR 12,178.87 crores (approximately USD 1.6 billion), representing a growth rate of
3.6% compared to the previous fiscal year.

The company's revenue is primarily generated from interest income, fees and charges, and
other income such as forex gains. In the fiscal year 2020-2021, the company's interest
income increased by 13.4% YoY, while fees and charges increased by 4.3% YoY. The
company's other income decreased by 59.3% YoY due to lower forex gains.

Over the past five years, SBI Cards and Payments has shown strong revenue growth, with a
CAGR of around 47% between FY2016 and FY2021. This growth has been primarily driven
by a significant increase in the company's credit card base and transaction volumes.

It's worth noting that the COVID-19 pandemic and associated lockdowns had an impact on
the company's revenue growth rate in the fiscal year 2020-2021. However, the company has
shown resilience and has focused on innovation and customer service to maintain its market
position and drive growth.

Company Profits

SBI Cards and Payments is a publicly listed company and publishes its financial results
regularly. As per the company's latest annual report for the fiscal year 2020-2021, its net profit
after tax was INR 1,004.94 crores (approximately USD 135 million), representing a growth rate
of 129.1% compared to the previous fiscal year.

The company's net profit has shown a strong growth trend over the past five years, with a CAGR
of around 51.5% between FY2016 and FY2021. This growth has been driven by an increase in
the company's revenue and operational efficiency, as well as a reduction in credit costs.

It's worth noting that the COVID-19 pandemic and associated lockdowns had an impact on the
company's profits in the fiscal year 2020-2021, primarily due to higher provisioning for expected
credit losses. However, the company has managed to maintain a healthy net interest margin
(NIM) and has a low level of non-performing assets (NPAs).

Overall, SBI Cards and Payments has shown a strong track record of profitability, driven by its
focus on innovation, customer service, and operational efficiency. The company's strong market
position in the Indian credit card industry and its partnership with State Bank of India (SBI)
provide it with a competitive advantage.

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 Other Indicators

In addition to revenue, revenue growth rate, and profits, there are several other indicators that
can provide insights into the performance of SBI Cards and Payments. Some of these
indicators are:

Credit card spends: This is one of the most important indicators for credit card companies
like SBI Cards and Payments. The company's total credit card spends grew at a CAGR of
around 30% between FY2016 and FY2021, reflecting a strong demand for credit cards in
India.

Credit card base: The number of credit card users is an important indicator of market
penetration and potential growth for SBI Cards and Payments. The company's credit card
base has grown at a CAGR of around 33% between FY2016 and FY2021, reaching 1.17
crore (11.7 million) customers as of March 31, 2021.

Net interest margin (NIM): This is the difference between the interest earned by SBI Cards
and Payments on its credit card loans and the interest paid to its creditors. A healthy NIM is
important for the company's profitability. As of March 31, 2021, the company's NIM was
14.4%, which is higher than the industry average.

Non-performing assets (NPAs): This is an important indicator of the credit quality of SBI
Cards and Payments' loan portfolio. As of March 31, 2021, the company's gross NPAs were
4.51%, which is lower than the industry average.

Return on assets (ROA): This is a measure of how efficiently SBI Cards and Payments is
using its assets to generate profits. As of March 31, 2021, the company's ROA was 7.2%,
which is higher than the industry average.

Overall, these indicators suggest that SBI Cards and Payments has been performing well in
the Indian credit card market, with a strong focus on innovation, customer service, and
operational efficiency. The company's partnership with State Bank of India (SBI) and its
strong market position provide it with a competitive advantage.

3. Fiscal policy (2023-24) provisions affecting the company

The Indian government's fiscal policies can have a significant impact on the credit card
industry, as they can influence factors such as interest rates, inflation, consumer spending,
and tax policies. Some of the potential fiscal policy provisions that could affect SBI Cards
and Payments in the fiscal year 2023-24 are:

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 Interest rates: Changes in interest rates can affect the demand for credit cards, as higher
interest rates make borrowing more expensive. If the Indian government increases interest
rates, it could lead to a decrease in credit card spends and slower growth for SBI Cards and
Payments.

Inflation: Higher inflation can increase the cost of goods and services, leading to a decrease
in consumer spending. If inflation rises in the fiscal year 2023-24, it could reduce the demand
for credit cards and affect the company's revenue growth.

Tax policies: Changes in tax policies can affect the disposable income of consumers, which
can influence their spending patterns. If the Indian government increases taxes in the fiscal
year 2023-24, it could lead to a decrease in consumer spending and credit card usage.

Digital payments: The Indian government has been promoting digital payments as a way to
reduce the use of cash and increase financial inclusion. If the government introduces new
policies or incentives to encourage digital payments, it could benefit SBI Cards and
Payments, as the company offers digital payment solutions.

Overall, the fiscal policies of the Indian government can have a significant impact on the
credit card industry and the performance of companies like SBI Cards and Payments. It will
be important for the company to monitor and respond to any changes in fiscal policies to
maintain its growth and profitability in the coming years.

4. Impact of current monetary policy on the company

The latest monetary policy provisions affecting SBI Cards and Payments. However, in general,
the monetary policy of the Reserve Bank of India (RBI) can have a significant impact on the
credit card industry, and hence on SBI Cards and Payments. Some of the potential impacts of the
current monetary policy on the company are:

Interest rates: The RBI's monetary policy decisions can influence interest rates, which can
affect the demand for credit cards. If the RBI increases interest rates, it can lead to a decrease in
credit card spending and slower growth for SBI Cards and Payments.

Liquidity: The RBI's monetary policy decisions can also influence liquidity in the market, which
can impact the availability of credit and borrowing costs. If the RBI tightens liquidity, it can

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increase the cost of borrowing for SBI Cards and Payments, affecting its profitability and
growth.

Digital payments: The RBI has been promoting digital payments as a way to reduce the use of
cash and increase financial inclusion. If the RBI introduces new policies or incentives to
encourage digital payments, it can benefit SBI Cards and Payments, as the company offers
digital payment solutions.

Non-performing assets (NPAs): The RBI's monetary policy decisions can also impact the
quality of SBI Cards and Payments' loan portfolio. If the RBI takes measures to reduce NPAs in
the banking sector, it can improve the credit quality of SBI Cards and Payments' loan portfolio,
reducing its credit risk.

Overall, the current monetary policy of the RBI can have both positive and negative impacts on
SBI Cards and Payments. The company will need to monitor and respond to any changes in
monetary policy to maintain its growth and profitability in the Indian credit card market.

Part B: Business Opportunities in the allotted Country

1. Country Introduction
Japan, officially known as the State of Japan, is an island nation located in East Asia. It consists
of four main islands - Honshu, Hokkaido, Kyushu, and Shikoku - as well as numerous smaller
islands. Japan is known for its rich history, unique culture, advanced technology, and
breathtaking natural landscapes.

Geographically, Japan is located in the Pacific Ocean and is bordered by the Sea of Japan to the
west, the East China Sea to the south, and the Pacific Ocean to the east. The country has a
diverse climate ranging from humid subtropical in the southern regions to subarctic in the
northern regions, with four distinct seasons.

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Japan has a population of approximately 126 million people, making it the 11th most populous
country in the world. The capital and largest city is Tokyo, which is a global financial and
technological hub. Other major cities in Japan include Osaka, Kyoto, and Hiroshima.

Japan has a unique culture that has been shaped by its long history, with influences from China,
Korea, and other neighboring countries. Japanese culture is known for its emphasis on
harmony, respect, and tradition. The country has a rich tradition of arts, including calligraphy,
tea ceremonies, origami, and traditional performing arts such as Noh and Kabuki. Japan is also
famous for its martial arts, such as karate, judo, and sumo.

The economy of Japan is one of the largest and most technologically advanced in the world. It is
known for its innovative and influential companies in sectors such as electronics, automobiles,
robotics, and pharmaceuticals. Japan is also a major exporter of goods and services, and its
economy is driven by a highly skilled workforce and a strong work ethic.

Japanese cuisine is renowned worldwide and includes dishes such as sushi, ramen, tempura,
and miso soup. Green tea, sake, and rice are also integral parts of Japanese food culture.
Traditional Japanese clothing includes the kimono and yukata, and the country is known for its
iconic fashion and street style trends.

Japan has a constitutional monarchy with a parliamentary government, where the Emperor
serves as a ceremonial figurehead and the Prime Minister is the head of government. The
country has a well-developed education system, with a high literacy rate and a strong emphasis
on science, technology, engineering, and mathematics (STEM) fields.

Japan is also known for its natural beauty, with picturesque landscapes including cherry
blossoms in spring, stunning temples and shrines, serene gardens, and majestic mountains such
as Mount Fuji, which is an iconic symbol of Japan.

In summary, Japan is a country with a rich history, unique culture, advanced technology, and
breathtaking natural beauty. Its influence on global economics, technology, arts, and popular
culture make it a significant player on the world stage.

2. Political stability
Japan is generally considered to be a politically stable country. It has a constitutional monarchy
with a parliamentary government, where the Emperor serves as a ceremonial figurehead and the
Prime Minister is the head of government. The country has a well-established democratic
system, with regular elections and a multi-party system.

One of the key factors contributing to Japan's political stability is its relatively low level of
political violence and social unrest. Japan has a history of peaceful transitions of power, with a
well-functioning political system and strong institutions that uphold the rule of law. Political

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protests and demonstrations are relatively rare in Japan compared to some other countries, and
the country has a generally peaceful and orderly political environment.

Japan's government is known for its stability and continuity, with long-serving political parties
such as the Liberal Democratic Party (LDP) dominating the political landscape. The LDP has
been in power for most of Japan's post-World War II history, with only a few brief interruptions.
This stability has allowed for consistent policy-making and implementation, which has
contributed to the country's overall political stability.

Moreover, Japan's political system is characterized by a high degree of consensus-building and

compromise among political parties. This has helped to maintain political stability and avoid
drastic shifts in policy direction. The Japanese political landscape is also known for its relatively
low levels of corruption compared to many other countries, which further contributes to its
political stability.

However, it's worth noting that Japan, like any other country, is not immune to political
challenges or changes. It faces its share of political issues such as economic and demographic
challenges, debates over social and cultural issues, and ongoing geopolitical tensions in the
region. Additionally, there have been occasional changes in leadership and shifts in political
power in recent years, although they have generally been peaceful and orderly.

In summary, Japan is generally considered to be a politically stable country with a well-

established democratic system, low levels of political violence, and a history of peaceful
transitions of power. However, like any other country, it faces political challenges and changes,
but its political system and institutions have generally provided stability and continuity in
governance.

3. Macroeconomic Indicators
Japan is one of the world's largest economies and is known for its advanced industrial base,
technological innovation, and global trade. Here are some key macroeconomic indicators that
provide an overview of Japan's economic performance:

Gross Domestic Product (GDP): Japan has a significant GDP, which is the total value of
goods and services produced within its borders. As of 2021, Japan's GDP was estimated to be
approximately $6 trillion, making it the third-largest economy in the world after the United
States and China.

Economic Growth: Japan has experienced periods of economic growth as well as periods of
economic stagnation over the past few decades. In recent years, Japan's economic growth has
been modest, with an average annual growth rate of around 1% to 2%. However, the country
has implemented various measures to stimulate growth, including monetary policies and
structural reforms.

Inflation: Japan has been grappling with a persistent issue of low inflation or deflation, which
refers to a decline in the general price level of goods and services. The Bank of Japan,

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 Japan's central bank, has implemented various measures to combat deflation and achieve a
target inflation rate of around 2%.

Unemployment Rate: Japan has a relatively low unemployment rate compared to many other
developed countries. As of 2021, Japan's unemployment rate was estimated to be around
2.9%, which indicates a relatively stable labor market.

Export-oriented Economy: Japan is known for its strong export-oriented economy, with
major industries such as automobiles, electronics, and machinery being significant
contributors to its exports. Japan is a major exporter to countries such as the United States
and China, and its trade balance is an important economic indicator.

Public Debt: Japan has one of the highest levels of public debt in the world, with a debt-to-
GDP ratio exceeding 250%. The country has been grappling with the challenge of managing
its public debt, which has implications for its fiscal policy, monetary policy, and long-term
economic sustainability.

Demographic Challenges: Japan is facing demographic challenges, including a rapidly aging

population and a declining birthrate, which pose significant economic implications. These
challenges impact areas such as labor force participation, consumer spending, and social
welfare spending.

Exchange Rate: The exchange rate of the Japanese yen (JPY) against other major currencies,
such as the US dollar and the euro, is an important macroeconomic indicator. Exchange rate
fluctuations can impact Japan's trade competitiveness, investment flows, and monetary policy
decisions.

Current Account Surplus: Japan has traditionally maintained a current account surplus, which
means that it exports more goods and services than it imports. This surplus has implications
for Japan's international trade, foreign exchange reserves, and overall economic performance.

These are some of the key macroeconomic indicators of Japan. It's important to note that
macroeconomic indicators can fluctuate over time due to various factors, including global
economic conditions, government policies, and external shocks. Therefore, it's important to
consider a range of indicators and factors when assessing Japan's economic performance.

4. Industry status and future outlook

Japan has a diverse and highly developed industrial sector, with a strong focus on advanced
manufacturing, technology, and innovation. The country has a long history of industrial
prowess and has been known for its high-quality products, technological advancements,
and global competitiveness. However, Japan also faces challenges in its industrial sector,

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including an aging workforce, demographic changes, and increasing competition from
emerging economies. Here is an overview of Japan's industry status and future outlook:

Industry Status:

Manufacturing: Manufacturing has traditionally been a key pillar of Japan's economy, with
industries such as automobile manufacturing, electronics, machinery, and chemicals being
major contributors. Japanese manufacturing companies are known for their high-quality
products, advanced production techniques, and focus on innovation.

Technology and Innovation: Japan has a strong culture of technological innovation, with
companies investing heavily in research and development (R&D) to develop cutting-edge
technologies. Japan is known for its advancements in areas such as robotics, renewable
energy, artificial intelligence, and biotechnology, among others.

Global Competitiveness: Japan has been a global leader in many industrial sectors and has
competed globally with other major economies such as the United States, China, and
Germany. Japanese companies are known for their global brands, high-quality products, and
advanced technological capabilities.

Small and Medium-sized Enterprises (SMEs): Japan has a large number of small and
medium-sized enterprises (SMEs), which play a significant role in the country's industrial
landscape. SMEs are involved in various industries, including manufacturing, services, and
agriculture, and contribute to local economies and employment.

Future Outlook:

Innovation and Digital Transformation: Japan is striving to promote innovation and digital
transformation across its industrial sectors to enhance productivity, competitiveness, and
sustainability. This includes initiatives such as Society 5.0, which aims to leverage
technology to create a human-centric, smart society.

Sustainable and Green Industries: Japan is placing increasing emphasis on sustainability and
green industries, including renewable energy, electric vehicles, and environmental
technologies. The country has set ambitious targets to reduce greenhouse gas emissions
and promote environmentally friendly industries, which present opportunities for
innovation and growth.

Aging Workforce and Labor Market Reforms: Japan is grappling with an aging workforce and
a shrinking population, which poses challenges for its industrial sectors. To address this, the
country is implementing labor market reforms, such as promoting workforce participation
among women, elderly, and foreign workers, and adopting automation and robotics to
enhance productivity.

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Globalization and Trade: Japan continues to be a major player in global trade, with
significant exports and imports. The country is actively engaged in regional and global trade
agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP), and is exploring opportunities to expand its market access and trade
relationships.

Industry 4.0 and Digitalization: Japan is embracing Industry 4.0, which refers to the use of
digital technologies and data-driven processes to transform industrial production. This
includes technologies such as the Internet of Things (IoT), big data, and artificial
intelligence, which are expected to drive innovation and productivity in Japan's industrial
sectors.

In summary, Japan's industrial sector has a strong foundation with a focus on

manufacturing, technology, and innovation. While it faces challenges such as an aging
workforce and increasing global competition, the country is actively pursuing strategies to
promote innovation, sustainability, and digital transformation in its industries. The future
outlook for Japan's industrial sector will likely be influenced by factors such as technological
advancements, labor market reforms, sustainability initiatives, and global trade dynamics.

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 Existing exposure of the CBR company(SBI Cards & Payments)
in the Country

Tokyo Branch

Established in 1980 as a branch office of SBI, at Tokyo, the objective is to strengthen Indo-
Japanese business ties with focus on corporate business from
both sides offering a wide range of loan products, such as
trade finance, project finance, other customized products
suited to the term and structure required for the purpose,
apart from the related Forex products and deposit products
both for Corporates and Individuals.
Located in the business district of Chuo-ku on the fourth floor
of Tokyo Tatemono Nihonbashi Building above Nihombashi
Subway Station, it would, indeed, be our privilege to serve you
for any of your banking needs.

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Osaka Branch

Osaka Branch, inaugurated in 1984, started to initially serve the

sizable Indian community in the Osaka-Kobe area The Kansai region
where Osaka Branch locates is the most important economic, business
and international trade center in Japan next to Tokyo. Since then,
Osaka Branch has grown with focus on bilateral commercial loan
facilities, participation in the locally originated syndicated finances,
trade finances, remittances and deposit acceptance among other
services. Osaka Branch is located in the central business district in
Osaka walking distance from Honmachi (Midosuji Line) and Sakaisuji
Honmachi (Sakaisuji Line) subway stations.

5. Future prospects for CBR company

The future prospects of State Bank of India (SBI), one of the largest public sector banks in
India, would depend on various factors that may impact the banking industry, both
domestically and globally. Here are some general potential future prospects for SBI Bank:

Digital Transformation: SBI has been investing in digital transformation initiatives to

enhance customer experience, streamline operations, and leverage technology for efficient
banking services. The bank's focus on digitalization and innovation may present
opportunities for growth, as technology continues to disrupt the banking industry.

Expansion and Diversification: SBI may explore expansion opportunities within India and
internationally, through organic growth or strategic acquisitions. The bank may also
continue to diversify its offerings by expanding into new product lines or services, such as
wealth management, insurance, and digital payment solutions.

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Increased Focus on Retail Banking: SBI has been focusing on retail banking as a growth
driver, with a focus on expanding its retail loan portfolio, improving customer experience,
and deepening customer relationships. The bank may continue to strengthen its retail
banking segment to tap into the growing demand for consumer loans, mortgages, and other
retail banking services in India.

NPA Resolution and Asset Quality Improvement: SBI, like other banks, has faced challenges
with non-performing assets (NPAs) in the past. The bank's efforts to resolve NPAs and
improve asset quality may impact its future prospects, as it would determine the bank's
ability to manage credit risk, maintain profitability, and sustain growth.

Regulatory Environment: The banking industry is highly regulated, and changes in regulatory
policies or guidelines may impact SBI's future prospects. Changes in interest rates, capital
adequacy requirements, or other regulatory measures may influence the bank's
profitability, risk management practices, and overall performance.

Economic and Business Environment: SBI's future prospects would also depend on the
broader economic and business environment in India and globally. Factors such as
economic growth, inflation, consumer spending, business investment, and geopolitical
developments may impact the bank's lending portfolio, asset quality, and overall
performance.

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