STRATEGIC COST MANAGEMENT.

State Bank Of India is the largest bank of India and a Fortune 500 company .The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in
Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as
the Imperial Bank of India on 27 January 1921. The Imperial Bank of India was founded in 1921 under the Imperial Bank of India Act 1920. On 1st July State Bank of India was
constituted under the State Bank of India Act 1955, for the purpose of taking over the undertaking and business of the Imperial Bank of India.
SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 16 regional hubs and 57 zonal
offices that are located at important cities throughout India.
SBI has entered into the league of
The bank had 24017 branches in India and 191 overseas offices spread over 36 countries having the largest presence in foreign markets among Indian banks.

top 50 global banks with a balance sheet size of ` 33 lakh crore, with 24,017 branches and 59,263 ATMs serving over 42 crore customers. The CSR contribution of Bank for FY2018 was

110 crore.

Non-banking subsidiaries

Apart from seven of its associate banks (now merged with SBI ), SBI's non-banking subsidiaries include:SBI Capital Markets Ltd ,SBI Cards & Payments Services Pvt. Ltd. (SBICPSL), SBI Life
Insurance Company Limited .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.

Other SBI service points

As of 31 March 2017, SBI group (including associate banks) has 59,291 ATMs.

Since November 2017, SBI also offers an integrated digital banking platform named YONO.

As on 31 March 2017, Government of India held around 61.23% equity shares in SBI. The Life Insurance Corporation of India, itself state-owned, is the largest non-promoter shareholder in the
company with 8.82%. The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, and the National Stock Exchange of India, where it

is a constituent of the CNX Nifty. Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.

PRODUCT COSTING SYSTEM :

I recommend product costing system can be effective through

1. Reach more customers and new levels of customer trust with a real-time intelligent enterprise and integrated financial insight and risk

control.

2. Simplify digital innovation in financial services. Explore innovation-led digital road maps and use cases for delivering open banking,

3. Implement open banking and platform-based business models to reduce operating costs, meet regulatory and compliance standards, and predict customer needs.

4. Unlock business value with digital technology. Stay competitive in the emerging digital financial services landscape by connecting new technologies with integrated

business solutions to create an intelligent enterprise.

5. Find banking software tailored to present needs

6. Bank’s success can achieved by developing and providing services and technologies such as mobile banking apps, omnichannel banking, and

digital banking analytics.

7.SAP Omnichannel Banking

Today’s banking customers expect a superior, always-on, always-connected experience. Find out how SAP Omnichannel Banking can help you achieve end-to-end digital transformation to build
lasting customer relationships and win in the digital economy through mobile banking and other services.

8.SAP Performance Management for Financial Services

Manage and analyse enterprise profitability and efficiency with just one application. Execute allocation and funds transfer pricing and costing models. Use a high-speed finance and risk calculation
engine along with business data aggregation and simulation and scenario management capabilities.

9.Digital Customer Engagement. In-the-Moment Marketing. Empowering Sales to Sell More . Digital Experience and Commerce. Digital Banking Self-Services. Customer Service and
Assistance.

10.Retail Banking Operations. Retail Deposits , Retail Lending. Centralised Payment Processing.
11.Commercial Banking Operations. Cash and Liquidity Management. Commercial Lending. Multicorporate Connectivity.
12.Finance and Risk. Accounting for Financial Instruments. Performance Management. Accounting and Financial Close. Financial Planning and Analysis. Governance, Risk, and Compliance.
Financial Services Data Platform.

SBI is one of the largest employers in the country with 209,567 employees as on 31 March 2017, out of which there were 23% female employees and 3,179 (1.5%) employees with disabilities. On
the same date, SBI had 37,875 Scheduled Castes (18%), 17,069 Scheduled Tribes (8.1%) and 39,709 Other Backward Classes (18.9%) employees. The percentage of Officers, Associates and
Sub-staff was 38.6%, 44.3% and 16.9% respectively on the same date. Around 13,000 employees have joined the Bank in FY 2016–17. Each employee contributed a net profit of ₹511,000 as on
March 2017.
B.ROLE OF MANAGEMENT ACCOUNTING /CFO IN YOUR COMPANY
Prashant Kumar has taken charge as the Chief Financial Officer (CFO) of the State Bank India.

A chief financial officer (CFO) is the senior executive responsible for managing the financial actions of a company. The CFO's duties include tracking cash flow and
financial planning as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions. CFOs oversee all the financial operations of
an organisation, including accounting and financial reporting. They manage all aspects of financial matters and decision making. CFOs oversee all the financial
operations of an organisation, including accounting, financial reporting. Management accounting is a profession that involves partnering in management decision making, devising
planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's
strategy . In management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters
within their organizations, which aids their management and performance of control functions.

The government has named Rajnish Kumar as the new chairman of the State Bank of India .

C. RESPONSIBILITY ACCOUNTING STRCTURE

Board of Directors

CSR Committee (Chairman, MD & CFO, MD & GE (NB) Independent Director)

MD & GE (NB)

GM (CC&C)

BR Function

The BR Function is responsible for overall BR policy compliance. The BR Policy will be updated from time to time by the BR Officer i.e. General Manager (Corporate Communication &

Change), in the light of amendments to laws, rules and regulations, as applicable, and an annual review report shall be submitted to the Board
. The Bank has a best in-class, seasoned
management to spearhead the creation, direction and growth of the value drivers. Due to their training and exposure to diverse banking activities, the top management is adept at

addressing various challenges in the banking sector.

D.TRANSFER PRICING SYSTEM (TYPE AND PROCESS OF SETTING UP THE TP)

Transfer pricing is a process used in banking to measure the performance of different business units of a bank
. Fund transfer pricing is a method used by bankers to
evaluate the profitability of deposits and loans. The challenge, in the case of the former, is as follows. When bankers evaluate the profitability of deposits, they know the cost – the interest to be
paid on those deposits and the associated operating expenses (such as employee time and IT). However, determining the return is more problematic because deposits are used to finance various
types of assets (such as consumer loans, corporate loans, interbank assets, bonds, and fixed assets). An identification of the revenue – known as the fund transfer price – must be made. In fact, it
is absolutely essential for accurate pricing of the bank’s commercial products, not to mention performance evaluation and organizational strategy, to have a sound method of calculating the fund
transfer price. It is particularly important in the light of the recent global banking crisis and the ongoing economic turbulence in the Eurozone. Added to that, implementation of the Basel III round of
banking regulations will place an added pressure on banks to maintain a buffer of liquidity. The foundation approach to fund transfer pricing traditionally used by most banks is no longer sufficient.
There are five issues 1. rationing on the interbank market; 2. the creation of a Basel III contingency liquidity buffer; 3. the necessity to adjust fund transfer price to the credit riskiness of specific
assets of the bank ; 4. the need to include a liquidity premium in the case of long-term funding; 5. the choice of a consistent methodology to incorporate the credit spread on the bank’s own debt
due to the perceived risk of bank default. Senior managers and board members have to understand all of these issues if they are to ensure long-term value creation for their organizations, as
TBU) Fee income from operations rose from `369.21 crore during FY2016 to `616.96 crore in FY2017, registering
opposed to short-term damage limitation. In 2017 Transaction Banking Unit (

a 67.10% growth.

E.BUDGETING PRACTICE (PROCESS,APPROACH,EVALUATION AND REWARD)

SBI’s new approach to reach customer and positive process approach expected to positively impact the efficiency and productivity of SBI, and are essential for being an enduring value

.
creator In order to provide better value to customers, SBI has introduced the use of the latest digital technology and have changed processes to reduce costs and enhance productivity.

Various e-Initiatives during the year: Centralised Funding cum distributed limits (CFDL): Launched new customised product with dash board for National Highway Authority of India. e-

Trade facility: It has been provided to Air force, Navy and DRDO and is being operationalised. Non Tax Receipt Portal of Government of India (NTRP): Your Bank has been integrated with

‘NTRP’ for online collection of all non-tax revenue of Government of India. Visa on arrival: This facility was enabled for Japanese nationals at 6 centres and e-Tourist visa facility which

started last year with 44 countries has been extended to 150 countries. Visa fee is being collected through SBI e-pay. Migration of Salary/Vendor payments to e-mode: Migrating

Salary/Vendor payments of Rajya Sabha, Railways, State Government of Assam, Manipur and Mizoram to e-platform has brought in more efficiency and standardisation in handling

government payments. E-Governance in State Governments: Launched 29 e-initiatives for various State Governments. State Government Receipt Business: States with Cyber treasury
(CT) facility use e-mode for tax collections and receipts. Bank is integrated with 32 States/Union Territories who are on CT. State Government Payment Business: Bank has provided e-

solution to 17 States/ Union Territories who are making payments through e-mode. Digital Workshops: Digital Workshops were conducted across India, for all States Governments and

Central Ministries to facilitate ‘Cash less Payments’. By digitising information-intensive processes, costs can be reduced significantly and turnaround times are improved remarkably.

These efforts are. purchase as well as reduction and rationalisation / standardisation of registers/ forms To be an enduring Bank, SBI need to chase quality growth and focus on

customers that help in driving better returns. SBI is evolving retail channels and product strategies to become even more consumer friendly. SBI’s merger with associate bank will

significantly outweigh the near term challenges and will show long term benefits . The resulting cost advantage; enhanced reach; and economies of scale from this merger, will help SBI

sustain its mission of being an enduring value creator. Cyber security policy of the Bank becomes proactive instead of reactive. In terms of operating cost reduction, Bank has taken up the

rationalisation of Currency Chests, under which 45 Currency Chests have been closed during FY2017, saving a recurring cost of approximately 25 crore per annum. Outsourcing Model of

Stationery Management has been rolled out in 8 Circles during the year to reduce costs incurred on hiring of premises, management of storage, obsolescence of stationery items,

manpower, and transportation costs. The Project entails centralisation of stationery

. Outstanding performance in the area of training to its employees ‘State Bank of India’ has been
declared as the Winner of ‘Golden Peacock National Training Award’ for the year 2017. In 2018 TCS announced that its customer, State Bank of India was selected as a Model

Bank winner by Celent, a leading Global Research and Advisory Firm for the financial services . .

F.PERFORMANCE MEASURMENT AND EVALUATION

As a part of mission to provide the entire gamut of financial services across India, the State Bank Group, provides a whole range of financial services, including Life Insurance, Merchant

Banking, Trustee Business

, Mutual Funds, Credit Card, Factoring, Security Trading, Pension Fund Management, Custodial Services, General Insurance (Non Life Insurance) and Primary
Dealership in the money market
.
SBI needs to improve its position with regards to a few parameters including debt-equity, operating profit, and non-interest income to total income.

A year over year decrease in total advances to total assets ratio may suggest a company is progressively becoming less dependent on debt to grow its business. Lower the net NPA to

total advances ratio, lower the risk therefore the bank has to maintain less NPA. By maintaining high total investment to total asset ratio the bank can increase its reputation. It may be

turned out risky for the bank if it would have maintained more total advances to total deposit ratio. The management of the bank can maximize the efficiency of its employees by

maintaining business per employee.

WHAT ARE THE KEY TAKEAWAYS OF THE COURSE ON THE ABOVE ELEMENTS
OR ACROSS DIFFERENT MODULES AND SESSIONS