Case study

State Bank of India

Unlike private-sector banks, SBI has a dual role of earning a profit and expanding banking
services to the population throughout India. Therefore, the bank built an extensive branch
network in India that included many branches in low-income rural areas that were
unprofitable to the bank. Nonetheless, the branches in these rural areas bought banking
services to tens of millions of Indians who otherwise would have lacked access to financial
services. This tradition of "banking inclusion" recently led India's Finance Minister P.
Chidambaram to comment, "The State Bank of India is owned by the people of India
History
The roots of the State Bank of India lie in the first decade of the 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 royal charters. These three banks received the exclusive right to issue paper currency
till 1861 when, with the Paper Currency Act, the right was taken over by the Government of
India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking
entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint
stock company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On
1 July 1955, the imperial Bank of India became the State Bank of India. In 2008, the
Government of India 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. This made
SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and
operatonal take-over between September 1959 and October 1960, which made eight state
banks associates of SBI. This acquisition was in tune with the first Five Year Plan, which
prioritised the development of rural India. The government integrated these banks into the
State Bank of India system to expand its rural outreach. In 1963 SBI merged State Bank of
Jaipur (est. 1943) and State Bank of Bikaner (est.1944).
SBI is an Indian multinational, Public Sector banking and financial services company. It is a
government-owned corporation with its headquarters in Mumbai, Maharastra and also its
corporate office in Mumbai, Maharashtra. As of December 2013, it had assets of US$388

billion and 13,000 branches, including 190 foreign offices, making it the largest banking and
financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of Baroda, Punjab
National Bank and ICICI Bank.
State Bank of India is a regional banking behemoth and has 20% market share in deposits and
loans among Indian commercial banks.

7 ps of marketing mix of SBI

Product mix
Deposits
a.
b.
c.
d.
e.

Saving account
Senior citizen service
Fixed deposits
Recurring deposits
Bank @ campus
Investments

1) SBI mutual fund

2) Sbi life insurance
3) SBI gold bond
Anywhere banking
Loan
1) Home loan
2) Car loan
3) Personal loan etc
Cards

Credit card
Debit cum ATM card
Travel card
DEMAT services
Moble banking

Pricing mix
The decision of pricing or the decision related to interest and fee or commission charged by
banks are found instrumental in motivating or influencing the target market

The pricing policy of a bank also considered raising the no of customrers via the accretion of
deposites. Also the quality of service provided has direct relationship with the fes charged.
Thus while deciding the price mix customer service rank the top position.
Place mix
This important of marketing mix is relates to the offering of services. The service sold
through the branches. The 2 important decisions areas are: making available the promised
services to the ultimate users and selecting a suitable place for bank branches. The no of
branches in India 16000
Promotion mix
Advertising: T V, Radio, movies, theatres
Print media: hoardings, newspapers, magazines
Publicity: road shows, campus visits, sponsorships.
Sales promotion: gifts, discounts and commission, incentives etc.
People
All people directly or indirectly involved in the consumption of banking services are an
important part of the extended marketing mix. Knowledge workers, employees, management
and other consumers often add significant value to the total product or service offering.
Process
Follow of activities
All the major activities of SBI banks follow RBI guidelines. There has to be adhered to
certain rules and principles in the banking operations. The activities have been segregated
into various departments accordingly
Standardisation
SBI has got standardised got typical transaction al the banks have got standardisation in them.
Customization
No of steps
Simplicity
Customer involvement
Physical evidence

It is a material part of service Strictly speaking there are no physical attributes to a service, so
a consumer tends to rely on material clues. There are many examples of physical evidence,
including some of the following.
Internet or web
Paperwork
Brochures
Furnishings
Business cards
On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank
State Bank of India Core Systems Modernization Drivers for a New Core System SBI had
undertaken a massive computerization effort in the 1990s to automate all of its branches,
implementing a highly customized version of Kindle Banking Systems' Bankmaster core
banking system (now owned by Misys). However, because of the bank's historic use of local
processing and the lack of reliable telecommunications in some areas, it deployed a
distributed system with operations located at each branch. Although the computerization
improved the efficiency and accuracy of the branches, the local implementation restricted
customers' use to their local branches and inhibited the introduction of new banking products
and centralization of operations functions. The local implementation prevented the bank from
easily gaining a single view of corporate accounts, and management lacked readily available
information needed for decision making and strategic planning. The advantages in products
and efficiency of the private-sector banks became increasing evident in the late 1990s as SBI
(and India's other public-sector banks) lost existing customers and could not attract the
rapidly growing middle market in India. In fact, this technology-savvy market segment
viewed the public-sector banks as technology laggards that could not meet their banking
needs. As a result, the Indian government sought to have the public-sector banks modernize
their core banking systems. In response to the competitive threats and entreaties from the
government, SBI engaged KPMG Peat Marwick (KPMG) in 2000 to develop a technology
strategy and a modernization road map for the bank.
In 2002, bank management approved
the KPMG-recommended strategy for a new IT environment that included the
implementation of a new centralized core banking system. This effort would encompass the
largest 3,300 branches of the bank that were located in city and suburban areas. The State
Bank of India's objectives for its project to modernize core systems included:
The delivery of new product capabilities to all customers, including those in rural area
The unification of processes across the bank to realize operational efficiencies and improve
customer service

 Provision of a single customer view of all accounts

The ability to merge the affiliate banks into SBI
Support for all SBI existing products
Reduced customer wait times in branches
Reversal of the customer attrition trend
Associate banks
SBI now has five associate banks, down from the eight that it originally acquired in 1959. All
use the State Bank of India logo, which is a blue circle, and all use the "State Bank of" name,
followed by the regional headquarters' name:

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

The State Bank of India and all its associate banks are identified by the same
blue keyhole logo. The State Bank of India word mark usually has one standard typeface, but
also utilises other typefaces.
Non banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of
the remaining capital), to form a joint venture life insurance company named SBI Life
Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was
founded with its headquarters in Mumbai
Recent awards and recognitions

SBI is having an asset value which is higher than the total reserves of RBI.

SBI is having an asset value which is more than that of LIC.

SBI was ranked 73rd largest bank in the world, according to 2014 SNL financial data.

SBI won the Best Bank award in the 'ASiAMONEY FX POLL OF POLLS 2014 for
best overall performance as domestic provider of Forex services over the last 10 years.

SBI was ranked as the top bank in India based on tier 1 capital by The
Banker magazine in a 2014 ranking.

SBI was ranked 298th in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2012.

SBI won "Best Public Sector Bank" award in the D&B India's study on 'India's Top
Banks 2013'.

State Bank of India won three IDRBT Banking Technology Excellence Awards 2013
for Electronic Payment Systems, Best use of technology for Financial Inclusion, and
Customer Management & Business Intelligence in the large bank category.

SBI won National Award for its performance in the implementation of Prime
Ministers Employment Generation Programme (PMEGP) scheme for the year 2012.

Best Online Banking Award, Best Customer Initiative Award & Best Risk
Management Award (Runner Up) by IBA Banking Technology Awards 2010

SKOCH Award 2010 for Virtual corporation Category for its e-payment solution

SBI was the only bank featured in the "top 10 brands of India" list in an annual survey
conducted by Brand Finance and The Economic Times in 2010.

The Bank of the year 2009, India (won the second year in a row) by The Banker
Magazine

Best Bank Large and Most Socially Responsible Bank by the Business Bank Awards
2009

Best Bank 2009 by Business India

The Most Trusted Brand 2009 by The Economic Times.

SBI was named the 29th most reputed company in the world according
to Forbes 2009 rankings

Most Preferred Bank & Most preferred Home loan provider by CNBC

Visionaries of Financial Inclusion By FINO

Technology Bank of the Year by

SBI was 50th Most Trusted brand in India as per the Brand Trust Report 2013, an
annual study conducted by Trust Research Advisory, a brand analytics company and
subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th Most Trusted
Brand in India.
Major competitors
Some of the major competitors for SBI in the banking sector are Axis Bank, ICICI
Bank, HDFC Bank, Punjab National Bank, Bank of Baroda, IndusInd Bank, Canara
Bank, Bank of India and Union Bank of India. However, in terms of average market share,
SBI is by far the largest player in the market
Employees
SBI is one of the largest employers in the country having 222,033 employees as on 31 March
2014, out of which there were 45,132 female employees (20%) and 2,610 (1%) employees
with disabilities. On the same date, SBI had 42,744 Schedule Caste (19%) and 17,243
Schedule Tribe (8%) employees. The percentage of Officers, Assistants and Sub-staff was
36%, 46% and 18% respectively on the same date Hiring drive: 1,776 Assistants and 1,394
Officers joined the Bank in FY 2013-14, for expansion of the branch network and to mitigate
staff shortage, particularly at rural and semi-urban branches. Staff productivity: As per its
Annual Report for FY 2013-14, each employee contributed net profit of INR 4.85 lakhs.
Challenges for the Bank
The bank faced several extraordinary challenges in implementing a centralized core
processing system. These challenges included finding a new core system that could process
approximately 75 million accounts daily a number greater than any bank in the world was
processing on a centralized basis. Moreover, the bank lacked experience in implementing
centralized systems, and its large employee base took great pride in executing complex

transactions on local in-branch systems. This practice led some people to doubt that the
employees would effectively use the new system. Another challenge was meeting SBI's
unique product requirements that would require the bank to make extensive modifications to
a new core banking system. The products include gold deposits (by weight), savings accounts
with overdraft privileges, and an extraordinary number of passbook savings accounts.
Problems in state bank of India
E-banking
HR related problems
Bad assets (NPA) it is raised 2.20 to 3.20 after setting the
Past one year it is showing a drop in operating as well as net profit every quarter.
Solution
Giving proper ways for E-banking
Hiring the qualified and efficient workers to the bank
Managing the assets, properly allocating the assets so that they can reduce the non
performing assets