| Type | Public |
|---|---|
| Traded as | NSE: SBIN BSE: 500112 LSE: SBID |
| Industry | Banking, Financial services |
| Founded | 1 July 1955 |
| Headquarters | Mumbai, Maharashtra, India |
| Area served | Worldwide |
| Key people | Pratip Chaudhuri (Chairman) |
| Products | Credit cards, Consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, wealth management |
| Revenue | 147,843.92 crore (US$28.09 billion) (2011)[1] |
| Operating income | 33,710.31 crore (US$6.4 billion) (2011)[1] |
| Profit | 11,179.94 crore (US$2.12 billion) (2011)[1] |
| Total assets | $322.077 billion (2010)[1] |
| Total equity | $19.048 billion (2010)[1] |
| Owner(s) | Government of India |
| Employees | 222,933 (2011)[1] |
| Website | www.statebankofindia.com |
The State Bank of India (SBI) is the largest Indian banking and financial services company (by turnover and total assets) with its headquarters in Mumbai, Maharashtra. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The government of India nationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India.
SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head Offices and 57 Zonal Offices that are located at important cities throughout the country. It also has around 130 branches overseas.
With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans.[2] The State Bank of India is the 29th most reputed company in the world according to Forbes.[3] Also SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.[4]
The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and HDFC Bank—its main competitors.[5]
Contents |
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 was one of three Presidency banks, the other two being 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 remained 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 government 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 13 September 2008, the State Bank of Saurashtra, one of its associate banks, merged with the State Bank of India.
SBI has acquired local banks in rescues. For instance, in 1985, it acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
As of 31 December 2009, the bank had 157 overseas offices spread over 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.
SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius).
In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches – nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.
The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in British Columbia.
In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.
In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.[6]
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005.[7]
SBI has five associate banks; all use the same logo of a blue circle and all the associates use the "State Bank of" name, followed by the regional headquarters' name;
Earlier SBI had only seven associate banks that constituted the State Bank Group. Originally, the then seven banks that became the associate banks belonged to princely states until the government nationalised them between October 1959 and May 1960. In tune with the first Five Year Plan, emphasising the development of rural India, the government integrated these banks into the State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations.[8]
The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing the number of state banks from seven to six. Then on 19 June 2009 the SBI board approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77%.)[9]
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of 12,448 and over 21,000 ATMs. Also, following the acquisition, SBI's total assets will inch very close to the Rs 10-lakh crore mark. Total assets of SBI and the State Bank of Indore stood at Rs 998,119 crore as on March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore Branches started functioning as SBI branches on 26 August 2010.[10]
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:
1.SBI Capital Markets Ltd
2.SBI Funds Management Pvt Ltd
3.SBI Factors & Commercial Services Pvt Ltd
4.SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
5.SBI DFHI Ltd
After the end of O. P. Bhatt's reign as SBI Chairman on 31st March, 2011, the post was taken over by Pratip Chaudhuri, who is the former Deputy Managing Director of the International Division of SBI. As on 4th August, 2011, there are twelve members in the SBI Board of Directors, including Subir Gokarn, who is also one of the four Deputy Governors of the Reserve Bank of India. The complete list of the Board members are:
On 8th July, 2011, SBI agreed to give a loan of Rs 10,000 crore to NTPC (National Thermal Power Corporation), making it the largest loan SBI had ever given to any single customer in its entire 200 year history. The loan had a "door-to-door" maturity period of 12 years, accompanied by a drawdown period of four years. An NTPC press release said at the time of the declaration of the loan that "The loan shall be utilized for financing the capital expenditure of ongoing and new projects."
NTPC chairman at the time, Arup Roy Choudhury clarified that the loan amount would be used to add 128,000 MW capacity by the end of year 2032 (NTPC'c capacity at the time of the declaration of the loan was 34,584 MW).[12]
This loan was offered amidst declining finance for power projects in India, which were a direct result of the lending constraints placed by the Reserve Bank of India and the increased risk awareness of power projects. It will also help minimize the shortfall of around Rs 4.51 Trillion that the Power Ministry of India expected to incur in achieving the objectives of the Eleventh Five Year Plan (This plan targeted an addition of 78,577 MW or power generation capacity which would require an investment of Rs 10.3 Trillion).[13]