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Executive Summary
Industry profile:
The banking industry in India today comprises of 27 public sectors, 31 private banks and 29 foreign banks. The Indian banking sector is headed for consolidation. The presence of many regional players will see few banks emerging as global competitors. Moreover, the likely rise in interest rates will see bank margins under pressure. Treasury gains may wilt in the current scenario. Bank profits in future may again be driven by core income. Indian banking industry in general and SBI in particular has positioned itself to take advantage of such economic growth, India is likely to achieve.
Company profile:
There are a total of 350 Commercial banks in the country, with more than 70,000 offices. STATE BANK OF INDIA owns 28% percent of these along with its seven associates. The bank has reach. Its three-and-a-half times the size of the next biggest bank, and bigger still than the next five banks put together. The bank has dominance. It has 28% percent of the total banking business in India. Despite its sheer size, and the legacy of the public sector, the bank is surprisingly nimble. Its computerizing its branches at a rapid pace, having already done so in 4,000 branches. It hopes to computerize 95% of the branch network by September 2005, and all the branches by December 2005. The bank has tied with TCS to develop core banking solutions, which will help network the branches.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore For the moment, SBI is distancing itself from its old ways and charting new territories. A few years from now people will be asking whether it can remain efficient despite the high -growth blueprint. But for now, it can be safely said; the bank is moving forward and taking on competition head on.
My learning:
My internship training at State Bank of India was indeed a learning experience. The organisation study has enhanced my knowledge regarding many aspects of administration. . I also got the opportunity to interact with the staff of SBI which proved to be very educative. It was overall a very wonderful and splendid experience which I wholly cherish.
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INDUSTRY PROFILE
Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before. Manu, the great Hindu jurist who has devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. During the mogul period, the indigenous bankers played a very important role in east India Company; it was the turn of the agency houses to carry on the banking business. The general bank of India was the 1st joint stock bank to be established in the year 1786. The others that followed were the Bank of Hindustan and the Bengal Bank failed in the meantime. In the 1st half of 19th century the East India Company established 3 banks: The Bank of Bengal in 1809. The Bank of Bombay in 1840 and The Bank of Madras in 1843. These 3 banks also known as Presidency Banks were independent units and functioned as well. These 3 banks were amalgamated in 1920 and a new bank, the Imperial Bank of India was established on 27th Jan 1921. With the passing SBI act in 1955, the undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. The RBI which is the central bank of India was created in 1935, by passing RBI act 1934. In the wake of the swadeshi movement, a no. of banks with Indian management were established in the country namely, Punjab National Bank ltd., Bank of India ltd., Canara Bank Ltd., Indian Bank Ltd., the Bank of Baroda Ltd., the Central Bank of India Ltd.On July 19, 1969, 14 major banks of the country were nationalised and on 15th April 1980, 6 more commercial private banks were also taken over by the Government. BABASABPATIL Page 3
Today, the commercial banking system in India may be distinguished into: 1. public sector banks o SBI and its associate banks called the State Bank group. o 20 nationalised banks. o Regional rural banks mainly sponsored by public sector banks.
2. private sector banks o Old generation private banks. o New generation private banks. o Foreign banks in India. o Scheduled co operative banks. o Non-scheduled banks.
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The financial system is also divided into users of financial services and providers. Financial institutions sell their services to households, businesses and government who are all the users of financial services. The providers of financial services are: 1. central Bank 2. other banks 3. Financial institutions. 4. money and capital markets 5. Informal financial enterprises. The organised financial system comprises the following subsystems: 1. The Banking System. 2. The Cooperative System. 1. Development Banking System. a. Public Sector b. Private Sector. 2. Money Markets. 3. Financial companies/Institutions
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An Organisational Study on State Bank of India- Zonal Office, Bangalore The unorganised sector comprises of money lenders, indigenous bankers, pawn brokers, landlords, traders etc. there are also a host of financial companies, chit funds etc. in the unorganised sector. The central bank or the government does not regulate these in a systematic manner.
IT in Banking
Indian banking industry, today is in the midst of an IT revolution. A combination of regulatory and competitive reasons has lead to increasingly importance of total banking automation in the Indian banking industry. Competition, growing expectations of customers and increased awareness among customers has led to the IT aspect in banking.
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Establishment
The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially upto the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.
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Business:
The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.
Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was BABASABPATIL Page 9
An Organisational Study on State Bank of India- Zonal Office, Bangalore to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.
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Bank of Madras
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An Organisational Study on State Bank of India- Zonal Office, Bangalore The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centres of the presidency.
India witnessed rapid commercialization in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. New irrigation networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion of India's international trade more than six-fold. The three presidency banks were both beneficiaries and promoters of this commercialization process as they became involved in the financing of practically every trading, manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries, the Bank of Madras went into the financing of large modern manufacturing industries, the Bank of Madras went into the financing of small-scale industries in a way which had no parallel elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange. Not only was such business considered risky for these banks, which held government deposits, it was also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank of India in 1935.
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Bank of Bombay
But this creation was preceded by years of deliberations on the need for a 'State Bank of India'. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank.
The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centers at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorized securities. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The bank was also the biggest tenderer at the Treasury bill auctions BABASABPATIL Page 13
An Organisational Study on State Bank of India- Zonal Office, Bangalore conducted by the Reserve Bank on behalf of the Government.
The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time.
Imperial Bank
The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.
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When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country.
An Organisational Study on State Bank of India- Zonal Office, Bangalore (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates) At present the 7 associate banks are: 1. State Bank of Bikaner and Jaipur 2. State Bank of Hyderabad. 3. State Bank of Indore. 4. State Bank of Mysore. 5. State Bank of Patiala. 6. State Bank of Saurashtra. 7. State Bank of Travancore.
The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.
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Mission Statement
To retain the banks position as the premier Indian Financial Services Group, with world class standards and significant global business committed to excellence in customer, shareholder and employee satisfaction and to play a leading role in the expanding and diversifying financial services sector while continuing emphasis on its development banking role.
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Values
Excellence in customer service Profit orientation Belonging and commitment to the bank. Fairness in all dealings and relations. Risk-taking and innovation. Team-playing. Learning and renewal. Integrity. Transparency and discipline in policies and systems.
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9. Shri N.S.Sisodia. 10. Smt. Shyamala Gopinath. 11. Shri. Arun Singh 12. Shri. Rajiv Pandey 13. Shri. Piyush Goyal
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ORGANISATION STRUCTURE
The structure of the corporate center and the business groups located at Mumbai is as follows:
DMD & CFO DMD & CCO DMD (I & MA) DMD & CDO CVO DMD (IT)
BUSINESS GROUPS
MD & GE (CB)
MD & GE (NB)
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Chief General Manager DGM Circle Financial Officer DGM Circle Credit Officer DGM Circle Development Officer DGM (Vigilance) DGM (Law) AGM (Public relations and community services banking)
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SMGS IVGen. Banking/Bud & Per.Mon.Etc. SMGS IV- Personnel & HRD
Chief Manager Lead Bank Cell (in a few nodules) MMGS III- Zonal Office CM Banking Operations
Computer Centre
MMGS III interoffice reconciliation-
SE Credit Cell
FINANCIAL VIEW
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The Bank posted a net profit of Rs 1222.83 cr for Q1 of 2005-06, recording a growth of 15.54% compared to Rs. 1058.40 cr in Q1 of 2004-05. Operating profit for the quarter stood at Rs.3439.48 cr. as against Rs. 2071.40 cr in Q1 of 2004-05 a growth of 66.05%. Operating Profit excl. profit on sale of investment, Dividend and one time item increased by 44.07%. Increase in net interest income coupled with marginal decline in Operating Expenses led to higher Operating Profit.
Ratio Analysis:
2004-05 Selected Ratios Earnings per share in Rs on Face Value of Rs 10 Return on shareholders equity Net interest margin (Net Int Income/Avg Int Earning Assets) NIM (Excl. one time items) Other income to Total net operating income Capital Adequacy Ratio (%) Tier I Tier II Net NPA Ratio FY 81.79 18.10 3.39 3.20 33.80 12.45 8.04 4.41 2.65 Q1 80.44 19.89 2.99 2.99 34.25 13.82 9.01 4.81 3.45 05-06 Q1 92.94 19.38 3.77 3.14 27.04 11.63 7.88 3.75 2.44
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An Organisational Study on State Bank of India- Zonal Office, Bangalore end of first quarter of 2005-06 were Rs. 5, 28,125 crores and Rs. 3, 00,122 crores respectively. The Operating Profit and the Net profit of the Group for the Q1FY06 were Rs. 4282.55 crores and Rs, 1322.67 crores respectively. The major financial indicators of the Group as at the end of Q1 FY 06 were as under:
Financial Parameter ROA ROE Expense Ratio NIM Yield on Advances Cost of Deposit Gross NPAs Net NPAs
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Some of them are as follows:
SBI Term Deposits Savings Bank SBI Recurring Deposits Loan against Mortgage of property SBI Loan for Pensioners SBI Housing Loan Loan against Shares & Debentures SBI Car Loan Rent plus Scheme SBI Educational Loan Medi-Plus Scheme SBI Personal Loan Rates of Interest
A no. of personal banking branches are opened throughout, equipped with customer friendly knowledgeable staff to cater to an individuals financial requirements State Bank of India offers a wide range of services in the Personal Banking Segment. Heres a brief look at one of the Personal Banking Product:
SBI HOUSING LOANS: Home is where the heart is! The Housing loan schemes are designed to make it simple to make a choice at least as far as financing goes. Some of the advantages are: Excellent service and lower costs. BABASABPATIL Page 27
An Organisational Study on State Bank of India- Zonal Office, Bangalore Low Equated Monthly Instalments (EMI) Low interest rates, currently between 8% p.a. and 9.25% p.a. on daily reducing balances No hidden costs or administrative costs No prepayment penalties. The loan could be taken for: Purchase or construction of a new house/ flat. Purchase an existing (old) house/ flat. Extend, repair, renovate or alter a house/ flat. Purchase a plot of land meant for construction of a dwelling unit. Eligibility Anyone who is over 21 years of age and has a steady source of income is eligible.
Loan Amount The actual loan amount is determined on the basis of repayment capacity taking into account the income, age, assets and liabilities. As a rule of thumb - Upto 60 times the net monthly income will be sanctioned depending upon the age. Usually, spouse's income and the expected rental would also be taken into account. Repayment
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An Organisational Study on State Bank of India- Zonal Office, Bangalore The repayment terms are amongst the most flexible in the market. Depending on the age and capacity to repay, the loan could be paid back the loan in easy instalments spread over 20 years. Agricultural Banking:
State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 6600 rural and semi-urban branches. There are 972 specialized branches which have been set up in different parts of the country exclusively for the development of agriculture through credit deployment. These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with Development Banking Department (DBDs) which cater to agriculturists and 2 Agricultural Business Branches at Chennai and Hyderabad catering to the needs of hi-tech commercial agricultural projects. The branches have covered a whole gamut of agricultural activities like crop production , horticulture , plantation crops, farm mechanization, land development and reclamation, digging of wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns, processing of agri-products, finance to agri-input dealers, allied activities like dairy , fisheries, poultry, sheepgoat, piggery and rearing of silk worms. SBI is the leader in agriculture finance in the country with a portfolio of Rs. 18,000
Corporate Banking SBI provides financial products and services of wide range for large, medium and small customers both domestic and international. The corporate banking unit is a step towards providing services to corporates.
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Some of its products are: Working capital financing It is extended both as fund based and non-fund based facilities to corporates, partnership firms, and proprietary concerns. It also extends working capital finance to all segments of industries and services sector such as IT. Term Loans The bank provides term loans to support capital expenditures for setting up new ventures and also for expansion, renovation etc. Deferred Payment Guarantees This is given to provide support purchase of capital equipments. Corporate loans. This is provided to corporates for a variety of business related corporates. Some of the loans are Project finance and Lease Finance, which is a dedicated set up specialised in financing of infrastructure and other large projects
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State Bank of India is an active participant in the area of finance of Project export activities. These activities will mainly involve financing the fund based and non fund based requirements of the project exporters. Export of engineering goods on deferred payment terms Execution of turnkey projects abroad Execution of overseas civil construction contracts abroad Exports of services are the contracts for export of consultancy, technical and other services. Project export contracts are generally of high value and exporters undertaking them are required to offer competitive terms to be able to secure orders from foreign buyers in the face of stiff international competition. Various types of credit facilities, both non fund and fund based, that the project exporters may need at the time of bidding and/ or for execution of the project are extended by the Bank.
Letter of Credit facility on behalf of the customer enabling him to import raw material required for manufacturing goods for project export is provided by the bank and also all other types of guarantees required for project export contract are issued by the bank: Bid Bond Guarantee. Advance Payment Guarantee Performance Guarantee Down BABASABPATIL Page 31
An Organisational Study on State Bank of India- Zonal Office, Bangalore Payment Guarantee Retention Money Guarantee Maintenance Guarantee & Overseas Borrowing Guarantee The fund based facilities are:
Merchant banking:
SBIs Merchant Banking Group is strongly positioned to offer perfect financial solutions to your business. We specialize in the arrangement of various forms of Foreign Currency Credits for Corporates.
It provides resources, convenience and services to meet customers needs by arranging Foreign Currency credits through: Commercial loans Syndicated loans Lines of Credit from Foreign Banks and Financial Institutions FCNRB loans Loans from Export Credit Agencies Financing of Imports.
International Banking:
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An Organisational Study on State Bank of India- Zonal Office, Bangalore of its Indian customers, non-resident Indians, foreign entities and banks through a network of 52 offices/branches in 31 countries, spread over all time zones. The network is augmented by a cluster of Overseas and NRI branches within India and correspondent links with over 700 banks, the world over. Bank's Joint Ventures and Subsidiaries abroad further underline the Bank's international presence. The Bank has carved a niche for itself in the Euro land with branches located in Antwerp, Paris and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from the Bank's Frankfurt branch.
Some of the Internet Banking services include: Self-account funds transfer across India. Third party transfers in the same branch New account opening Demand Draft requests Standing instructions New Cheque-book request and much more.
Apart from these, the other salient value-added features available are: Railway tickets booking, Page 33
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Utility bill payments LIC and other insurance premium payments, SBI Mutual funds Investments Remit Subscription to PPF account, Credit card dues payments, Deposit your taxes, Donations to your religious inspirations Donations to Red Cross and such other organisations Setting up SMS alerts for transaction information.
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AGM(Small Enterprises Credit Cell(SECC)): In order to reduce turn around time in the processing of small business and SSI advances the Bank has setup SECCs under its Business Process Reengineering(BPR) Project. While the branches will source the applications and ensure KYC in respect of customers, the processing of loans, sanctions and Documentation will be made by SECCS. They will also obtain legal opinions and valuation reports and conduct pre-sanction inspections. An SECC is functioning at Bangalore. AGM(RAPSECC): At centres where there is not sufficient work load to setup RACPC & SECC separately a hybrid processing cell is set up to cater to both Personal segment loans & Small enterprises. In Bangalore module two such cells are in operation at Mysore & Mangalore. AGM(Outbound Sales force): He is in charge of a mobile marketing wing of the Bank staffed with sales executives, who will contact prospective customers in personal segment and direct them to the nearest branches. One such wing is functioning at Bangalore
AGM(Mortgage Loans)
the module, particularly in Personal segment His responsibilities include getting new business, exploring strategic tie-ups,co-ordinating with RACPC & Outbound Sales force . AGM (Credit Processing cell) : In order to reduce turn around time in the processing of small business and SSI advances the Bank has set up CPCS .While the branches will source the applications and ensure KYC in respect of customers, the processing of loans , sanctions will be made by CPCS. One CPC is functioning in Bangalore Module. BABASABPATIL Page 36
Manager (Multi Sales Task Force) He is in charge of a mobile marketing wing of the Bank staffed with sales executives, who will contact prospective customers in Small & Medium enterprise segment and direct them to the nearest branches. One such wing is functioning at Bangalore Chief Manager (Advances, Rehabilitation
cum NPA management cell): Stationed at Zonal office and will monitor the credit portfolio pertaining to direct branches & module and is in charge of Advances, Rehabilitation & NPA management cell. He is also the secretary of Zonal Office Credit Cell. He is assisted by
o Manager (NPA) : Stationed at Zonal office and will monitor the NPAs in respect of direct branches & module o Manager Advances cell : Stationed at charge of Advances, Rehabilitation Chief Manager(General Banking): Stationed Zonal office and will
at the Zonal Office is in charge of all Banking Operations like , budgeting, Performance monitoring, Premises , Fixed Assets, all Banking activities other than Advances in respect of direct branches. Compliance of Inspection reports. He will also look after the issues relating to branch premises, fixed assets. He will functionally report to AGM(Operations of the Module)
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at Zonal office and is in charge of staff matters including Staff budgeting ,transfers, training , leave, Medical Bills ,Staff Housing loans and placements in the module. He will assess the training needs of the staff and arrange for such training. He will also manage the service files and leave records of the officers in the module. He is also staff in charge in respect of staff working in direct branches. Chief Manager (Banking Operations): He is in charge of Inter Office Reconciliation, Zonal Office Computer Centre(ZOCC), Govt Accounts MIS depts in the Module. He is responsible for collection of various returns, data, and analysis and follow-up with branches for attending to IOR memos, Reconciliation, submission of data etc. He is responsible for preparation of and submission of Annual returns. Completion of statutory Audit of the returns and compliance of the Audit reports. He is assisted by ; o Manager ZOCC: He is in charge of ZOCC, which will collect data like weekly reports, Monthly P Forms, Credit Information System (CIS) data, analyze them and prepare report to DGM. o Manager (IOR Cell): He is in charge of Inter Office Reconciliation, and will ensure timely reconciliation by the branches in the zone, Submission of daily statements to the Reconciliation dept at Belapur. o Manager (MIS): He is responsible for collection of data and various returns from the branches in the module. Analysis of these data and providing information to the Management (DGM) and submission of consolidated returns to Local Head office. BABASABPATIL Page 38
Manager Disciplinary Proceedings Cell (DPC): He is in charge of Disciplinary & Vigilance matters in the module. He will arrange for Investigation, calling of explanations, charge sheeting the errant staff, arranging for Enquiry and follow-up of the pending cases with the disciplinary authorities in the module. He will also appraise the management from time to time progress in each case and the details of pending cases. He will also ensure timely completion of Investigation and enquiry. He is assisted by the Investigation officers, Presenting Officers and Enquiry officers appointed in each case. Manager Security: He is responsible for ensuring proper security for the branch premises and offices. He will visit branches and ensure required security precautions are taken by the branches. He will recommend for installation of CC TVs at branches. He will arrange for training to armed guards. Ensure that Gun licences are renewed and up to date and Guns are serviced regularly. He will also ensure that locking system is properly managed. Dy. Manager Law: With a view to provide advises on legal matters to the branches in the module, a law dept has been setup in each module. The Law officer is a specialist officer with legal background. He will provide expert opinion on legal matters, empanel the advocates and follow-up cases with the advocates and branches. He will scrutinise agreements and study the legal implications relating to various banking decisions. At times he will oversee the cases relating to the Bank in Courts, Debt Recovery tribunals, Ombudsman and Consumer forums. Dy. Manager Engineering: In order to enable the branches and the operating staff to take decisions regarding Civil & Electrical works a section headed by engineer is functional at the Zonal Office. The Engineer who will BABASABPATIL Page 39
An Organisational Study on State Bank of India- Zonal Office, Bangalore be reporting to the DGM will evaluate the estimates and plans .He will also supervise the constructions and will also monitor the works subcontracted to contractors. He will also scrutinise the Bills submitted by the contractors and countersign the Bills. Sr. Medical Officer: With a view to provide Medical assistance to the Staff, Bank has setup a Medical section headed by a senior medical officer is set up at the Zonal Office. The Medical Officer will provide Health care service to the staff. He will also scrutinise the medical bills of staff. He will also undertake medical examination of new recruits. Manager Official Languages: He is responsible for the implementation of the Official language policy of Govt of India, in the branches and module. He has to ensure progressive use of Hindi and Regional language (Kannada in Bangalore Module), in day to day operations within and with the customers. He will receive quarterly returns from the branches and take steps to achieve the targets. He will also arrange for training the staff in Hindi & Kannada. Translate Circulars, letters etc from English to Hindi/ Kannada. Ensure usage of Bi/ Tri lingual stamps, letter heads and computer application packages.
Manager Computer& Communications: As the Bank is totally computerised; there is a need to provide ongoing software & hardware support to the branches. With the above in view a specialised section under the Manager Computer& Communications is functional at the Zonal office. He is assisted by Project officers who will help in computerising the branches and software updates. A Communication Engineer in the section will help manage the communication network & equipments
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Chief Manager Office Administration: All payments including Salary and allowances to the staff made in the Zonal office are made by the Office Administration Dept in the Zonal Office. All the Clerical and Subordinate staff working in the Zonal office are under the Chief Manager Office Administration. AGMs of Regions: A Module in SBI comprises of 3-6 regions
which are headed by AGMs. Each region is a mini module controlling 25-35 branches and is responsible for the business growth; smooth functioning of the branches, quality of assets, customer service and personnel Management. There are 5 Regions in Bangalore Module .The AGM of the region is assisted by the following officials : o Branch Managers: The Heads of branches who will ensure smooth functioning of the branches and are responsible for branch operations. o Chief Manager (Credit Support cell): Stationed at Regional office and will monitor the credit portfolio in the region. o Chief Manager(General Banking): Stationed at the Regional Office is in charge of all Banking Operations like , budgeting, Performance monitoring, Premises , Fixed Assets, all Banking activities other than Advances etc.. In the Region. He will functionally report to AGM(Operations of the Module) o Manager (NPA): Stationed at Regional office and will monitor the NPAs in the region. o Manager(Staff in charge) Stationed at Regional office and is in charge of staff matters including transfers, training and disciplinary matters o Dy. Manager (I&A): Stationed at Regional office and will oversee the Compliance of Inspection reports, ensuring the health of branches. BABASABPATIL Page 41
AGM (Regional Business Office): With a view to take the controllers nearer to place of operations some of the AGMs of regions will be stationed out side the module HQ. Their functions are same as that of AGMs of regions. RBO of Region III in Bangalore module is located at Mangalore.
AGMs of Branches: All Branches with more than Rs.1000million business are headed by AGMs, who in turn manage these branches through Divisional Managers heading various business segments in the branch. and will ensure smooth functioning of the branches and are responsible for branch operations. He will directly report to the DGM of the module. There are 18 direct branches in Bangalore Module
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SWOT ANALYSIS
STRENGTH: Many new generation banks both private and foreign have entered the banking industry and these banks offer new products at competitive rates. In this scenario, the bank has defined its competitive advantage as: Vast branch network spread all over the country. Advancement in technology upgradation. Low NPA ratio SBI & Associates is the largest bank in India Branch network has also spread overseas. Well trained personnel to handle specialised products. Provides innovative products and services.
WEAKNESS: High cost of funds. Insufficient banking hours. Inability to make good use of advertising to attract customers. Old fashioned ambience. Some of the branches not being fully computerised. Non availability of a centralised customer database.
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OPPORTUNITY: In the banking sector, technology is finding its application in product delivery/access, productivity, performance, product design and above all adapting to market and customer needs. This can significantly add to the competitive advantage and promote the services to clients.
THREAT: Size has become an important issue in Indian banking parlance. There are bound to be mega mergers and acquisitions. Increasing pressure on asset quality, decreasing margins and competition. Banks, especially PSBs are at the receiving end of certain developments including policy changes, for instance the ongoing clamour to lower the interest rates. Stiff competition from other industrial rivals.
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Consequences of Job Satisfaction: High job-satisfaction may lead to improved productivity, increased turnover, improved attendance, reduced accidents, less job stress and lower unionisation. Productivity The relationship between satisfaction and productivity is not definitely established. The consensus, however, is that in the long run job-satisfaction leads to increased productivity. But, four decades of research into this issue, unfortunately does not support to this belief.
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Satisfaction and absences: Correlation of satisfaction to absenteeism is also improved conclusively. Absenteeism is high when satisfaction id low. The degree to which people feel that their jobs are important has a moderating influence on their absences. While high job-satisfaction will not necessarily result in low absenteeism, low satisfaction is likely to bring about high absenteeism. Satisfaction and job stress: Chronic job-dissatisfaction is a powerful source of job stress. The employee may see no satisfactory short-term solution to escaping this type of stress. An employee trapped in a dissatisfying job may withdraw by such means as high absenteeism and tardiness, or the employee may quit.
Measurement of Job satisfaction This provides an index of organisational effectiveness. The three primary methods of measuring job satisfaction are:
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Sources of Job Satisfaction: o Wage structure o Nature of work o Promotions o Work group o Working conditions o Supervision
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RESEARCH METHODOLOGY
Background of the study Job satisfaction is a widespread problem. Productivity, efficiency are related to work force. To achieve those one should be committed to the organisation to the long term. This in turn depends on the level of job satisfaction and the morale of the employees. Job satisfaction improves the performance of an organisation.
Statement of the problem The research problem selected is entitled as Job satisfaction of employees in SBI, Zonal Office, Bangalore. Need and importance of study o This study is undertaken to find out the level of job satisfaction among the employees of SBI. Moreover, this study is to know the impact of working conditions, company policies and its impact on the job satisfaction. o This study will help the organisation to design their job satisfaction programme. o Management can decide whether the existing job satisfaction programme should be continued or revised.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Hypothesis: o There exists no difference in the perception of job satisfaction as perceived by employees of SBI o There exists difference in the perception of job satisfaction as perceived by employees of SBI. Primary Objective o To study the level of job satisfaction in SBI Secondary Objectives
o To study the effects and outcomes of job dissatisfaction o To identify potential causes for job satisfaction o To measure the level of job satisfaction in relation to various factors like the physical and social environment, training and development, goals, rewards remuneration etc. Scope This study is undertaken to find out the level of job satisfaction among the employees of SBI, Zonal Office, Bangalore.
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Limitation o The sample size was limited o It includes the officers and clerks of the Zonal Office only and not the organisation as a whole. o Respondents did not answer a few questions. o Opinion of the respondents may be raised. o The study is sensitive in nature and there might be a colour of bias in answering the questionnaire. Sources of Data: Primary Data: Primary data has been collected through administering the questionnaires personally to employees of SBI. The response will be analysed and evaluated to extract the required information. Secondary Data: Secondary data has been collected by way of personal meeting with employees of SBI and also various reports collected from them. Information was also collected from websites, brochures, bank journals, magazines etc.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Sample size: The sample size considered for the research is 50. Sampling technique: The sampling technique used is simple random sampling. Research Instrument: The instruments used for research are mainly questionnaires and interviews. A set of questionnaires was presented to respondents. Because of its flexibility, it is by far the most common instrument used to collect primary data. Questions were carefully developed, tested and debugged before administering in a large scale. The questions and their form, wording and sequence were carefully chosen. Close ended questions were chosen specifying all possible answers Under close-ended questions, the following types of questions were asked in the questionnaire.
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Data Analysis
The various parameters selected for analysing the job satisfaction level are: Remuneration Training & Development Communication Goals Teamwork Promotions Leadership Rewards & Punishment Social Environment Physical Environment
Previously conducted surveys prove that the above mentioned parameters have a highly positive correlation with the job satisfaction level. Feedback given by the employees regarding the above mentioned parameters have been analysed to find out the employees perception about these parameters and thereby the overall job satisfaction level is measured.
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Satisfaction level To a very small extent To a small extent To a large extent To a very large extent
Remuneration
30.0%
0.0%
21.2%
To a very small extent To a small extent To a large extent To a very large extent
48.8%
Graph 1 21.2% of the employees are satisfied with the remuneration to a small extent. 48.8% of the employees are satisfied with their remuneration to a large extent 31% of the employees are very much satisfied with their remuneration.
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Satisfaction level To a very small extent To a small extent To a large extent To a very large extent
0.0% 37.1%
28.3%
To a very small extent To a small extent To a large extent To a very large extent
34.6%
Graph 2
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Graph depicting satisfaction level regarding Communication with peers and superiors: Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 3.4 26.6 43.2 26.8 Communication
26.8%
3.4% 26.6% To a very small extent To a small extent To a large extent 43.2% To a very large extent
Graph 3 3.4% of the employees feel very uncomfortable to communicate with their peers and superiors. 26.6% of the employees are satisfied to a small extent with regard to communication. 43.2% of the employees a satisfied to a large extent with regard to communication. 26.8% of the employees to a very large extent are comfortable in communicating with their superiors and peers. BABASABPATIL Page 55
Graph depicting how clear are the employees regarding goals of their departments and the organisation.
Satisfaction level To a very small extent To a small extent To a large extent To a very large extent
Goals
26.8%
6.6%
10.0%
To a very small extent To a small extent To a large extent To a very large extent
56.6%
Graph 4 6.6% of the employees are not very clear with their goals. 10% of the employees are clear to a small extent with their goals. 56.6% of the employees are clear with their goals to a large extent.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 26.8% of the employees do not have any confusion with regard to their goals.
Satisfaction level To a very small extent To a small extent To a large extent To a very large extent
Teamwork
3.0%
8.1%
To a very small extent To a small extent 34.9% To a large extent To a very large extent
54.0%
Graph 5 8.1% of the employees are satisfied with teamwork to a very small extent. 34.87% of the employees are satisfied with teamwork to a small extent. 53.98% of the employees to a large extent are satisfied with teamwork. Page 57
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 3.03% of the employees are satisfied with teamwork to a very large extent.
Graph depicting the satisfaction level regarding promotions. Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 18.18 32.24 36.57 13.01
Promotions
13.0%
18.2%
36.6%
32.2%
Graph 6 18.18% of the employees are dissatisfied with promotions. 32.24% of the employees are satisfied with promotions to a small extent. 36.57% of the employees are satisfied with promotions to a large extent.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 13.01% of the employees are satisfied with promotions to a very large extent.
Graph indicating satisfaction level regarding the leadership of superiors. Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 16.7 33.3 50 0
Leadership
0.0%
16.7%
50.0% 33.3%
Graph 7
16.7% of the employees are very much dissatisfied with leadership. 33.3% of the employees are dissatisfied with leadership to a small extent. Page 59
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 50% of the employees are satisfied with leadership to a large extent.
Graph depicting the satisfaction level of the employees regarding Rewards & Punishment Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 19.8 40.1 32.6 7.5
7.5% 32.6%
19.8%
To a very small extent To a small extent To a large extent To a very large extent
40.1%
Graph 8 19.8% of the employees feel that rewards & punishment system is not very effective. 40.1% of them feel that rewards & punishment system is effective to a small extent. BABASABPATIL Page 60
An Organisational Study on State Bank of India- Zonal Office, Bangalore 32.6% of them feel that rewards & punishment system is effective to a large extent. 7.5% of the employees are very much satisfied with rewards & punishment system. Graph indicating satisfaction level regarding the social environment of the work place. Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 2.03 28.74 52.63 16.60
Social Environment
16.6%
2.0% 28.7% To a very small extent To a small extent To a large extent To a very large extent
52.6%
Graph 9 2.03% of the employees are very much dissatisfied with the social environment. 28.74% of the employees are satisfied with the social environment to a small extent. Page 61
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52.6% of them are satisfied with the social environment to a large extent. 16.6% of the employees are satisfied with the social environment to a very large extent.
Graph indicating satisfaction level regarding the physical environment of the workplace
Satisfaction level To a very small extent To a small extent To a large extent To a very large extent
Physical Environment
14.0%
16.0%
30.4%
39.6%
Graph 10 16% of the employees are not very happy with the physical environment. 39.6% of them are satisfied with the physical environment to a small extent. BABASABPATIL Page 62
An Organisational Study on State Bank of India- Zonal Office, Bangalore 30.4% of the employees are satisfied with the physical environment to s large extent. 14% of the employees are very much happy with the physical environment of the organisation.
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Findings
Hurdling may be an appropriate metaphor for what researchers face when the fact is considered that learning to hurdle makes better runners. This research involved multifarious hurdles; but the outcome of the struggle has been fruitful from the banks perspective as well as from the researchers perspective. The findings arrived at from A SURVEY ON JOB SATISFACTION, are summarised as under:
About 58.8% of the employees are very much satisfied with the remuneration. 41.2 % of the employees are not satisfied with the remuneration to a great extent. The employees are very satisfied with the medical and scholarship facilities provided to their family and children. An employee gets 100% reimbursement of medical expenses and 75% reimbursement of medical expenses to his/her family. The training facilities of the bank are extremely good. Most of the employees are satisfied with the amount of training given to them in 1 year. The employees feel that the training provided to them helps them in their work to a great extent. Communication between the peers and superiors is good. About 30% of the employees feel a little uncomfortable in communicating with their superiors. A major portion of the employees are very clear with the goals of their departments and the organisation. About 16.6% of the employees are not very clear with their goals. Further investigation revealed that most of them who were unclear with their goals were new comers to their concerned departments.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore About 56% of the employees feel that the team work in their respective departments is excellent. Again, these are from the department where team work was rewarded. In departments where teamwork was not rewarded, teamwork and cooperation was not very apparent. 50.42% of the employees were not satisfied with the promotions. Most of the felt that promotions have been long overdue. Most of the employees also felt that they have been denied promotion many a times. 50% of the employees were happy with their superiors leadership. They felt that their bosses took personal interest in the employees growth. The other 50% of the employees were not very much satisfied with their superiors leadership. Since the opinion is precisely divided into 2 halves, this issue clearly has got to do with the kind of superiors present in each department. The reward and punishment system is fairly good but that very much effective according to 59.9% of the employees. Employees stated that if an employee is charged under a certain crime, it takes a very long time for the matter to be settled. In the course of time the intensity of the matter reduces to a great extent. 69.23% of the employees are very much content with the social environment of the workplace. Most of the employees share a very good relationship with one another even outside the organisation. This definitely brings a good effect on the social environment as well. The physical environment of the bank is very good. Most of the employees are satisfied with the workspace provided to them. The officers are provided with sufficient workspace. Some of the clerical staff feels that the space provided for work is not sufficient. All the employees feel much secured about their jobs. This sense of security makes them a part of the organisations growth. BABASABPATIL Page 65
An Organisational Study on State Bank of India- Zonal Office, Bangalore Since SBI is the largest bank in India, the employees feel good to be associated with this bank as it also has an international repute. The overall job satisfaction level of the employees is extremely good. The extremely good figure could be attributed to the job security in public sector banks and also the satisfaction level considered from the other attributed mentioned. Also, the average no. of years of service on an employee being 14.8 yrs. justifies the reason for an extremely good job satisfaction level.
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SUGGESTIONS
After analysing the feedback given by the employees, the following suggestions can be considered to improve the job satisfaction level:
Since all major banks are fully computerised, some of the older employees are not well versed with the usage of computers; thorough training should be given to such employees as it will help them to carry out their job more efficiently. With the entry of private players, SBI is facing tough competition with banks like ICICI, HSBC etc. Therefore, the staff should be trained so that they can face the competition. They should be adequately trained about the modern ways of banking. The software and hardware equipments should be maintained properly so that work can be carried out smoothly. Since, employees of public sector banks are prone to transfers; technical know how should be considered before transferring an employee. This will increase the productivity of the employee. Also, the bank need not spend additional money on training an employee for a particular job. Also, needy employees must be granted a transfer on special conditions. Job rotation should be done especially for clerical jobs, as the same kind of work leads to boredom. Strong emphasis should be laid on team work. Leaders must stress on team building. Page 67
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Employees must be encouraged to participate in decision making. The employee giving the most valuable suggestion must be rewarded. Team work must be compulsorily rewarded to further motivate employees. The rigid policies of promotion must be done away with. Instead, deserving employees must be promoted. This will lead to better job satisfaction. The democratic way of looking at things is obsolete. It hampers growth. Hence, managers must have a global view. Rewarding system should be made more transparent. Each department should select Employee of the month. That particular employee must be rewarded for his/her hard work. This type of social recognition leads to high self esteem in the employee thus, leading to better job satisfaction. Informal get-togethers can be organised in order to facilitate better relationships among the employees.
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CONCLUSION
I had an enriching experience during the internship. I learnt a great deal of things by being a part of the team in group discussions. It has also exposed me to the work style and outlook services offered by the organisation. The future of an organisation largely depends on its productivity and productivity depends on the employees who work for the organisation. If the employees are very productive in nature, no one can beat the organisation. To make the employees more productive, the organisation should try to satisfy the employees to the maximum extent. Every organisation must conduct employee survey every year to compare the present satisfaction level with the past. These surveys help to indicate the mirror of management in the minds of the employee as well as management about their feelings, opinions and attitude. Observations, interviews and questionnaire feedback helped me to understand the perception of job satisfaction. From various feedback obtained, It can be concluded that the job satisfaction level of employees is very high in State Bank of India, Zonal Office, Bangalore. Employees are proud to be associated with State Bank of India and it is an extremely good organisation to work with.
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An Organisational Study on State Bank of India- Zonal Office, Bangalore Cadre: ----------------------Grade: ----------------------
No. of years of service in the organisation: Rate the following on a scale of 1 - 4 1 - To a very small extent 3 - To a large extent To what extent:
--------------------------------------
1) Do you receive regular feedback about your job performance? 1-----2-----3-----4 2) Do you feel free to communicate with your superiors? 1-----2-----3-----4 3) Are the important decisions of your department communicated to you? 1-----2-----3-----4 4) Is the amount of work you are expected to do reasonable? 1-----2-----3-----4 5) Are the individual differences respected?( educational background, gender, race) 1-----2-----3-----4 6) Are your opinions and suggestions heard and welcomed? 1-----2-----3-----4 7) Are you satisfied with the general amenities like canteen, toilet facilities etc.? 1-----2-----3-----4 8) Are you satisfied with the workspace provided to you? 1-----2-----3-----4 9) Is teamwork and cooperation present among individuals?
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 1-----2-----3-----4 10)Is teamwork rewarded? Yes No
11)Are you satisfied with your remuneration? 1-----2-----3-----4 12)Are you satisfied with your appraisal system? 1-----2-----3-----4 13) When was your last promotion? (no. of years) 14) Do you feel it is high time you got promoted Yes To what extent: 15)Are you satisfied with the medical facilities? 1-----2-----3-----4 16) Are you satisfied with the education and scholarship facilities provided to your children? 1-----2-----3-----4 17) Do you receive rewards and recognition for work well done? Always Sometimes Usually Never No
18) Is the reward and punishment system effective? 1-----2-----3-----4 19)Are you clear about the goals of your department? 1-----2-----3-----4 20)Are you clear with the goals expected from you?
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An Organisational Study on State Bank of India- Zonal Office, Bangalore 1-----2-----3-----4 21) Are you clear about the companys vision and goals? 1-----2-----3-----4 22) How good is the quality of training being given? Poor Satisfactory Good Very good Excellent
To what extent: 23)Do your superiors give attention to your training needs? 1-----2-----3-----4 24) Has the training you received helped you to do your job better? 1-----2-----3-----4 25) Are you satisfied with the amount of time you have spent on training in the past 1 year? 1-----2-----3-----4 26) Do your superiors focus on team building and teamwork? 1-----2-----3-----4 27) Do your superiors pay attention to your grievances? 1-----2-----3-----4 28) Do your superiors motivate you? 1-----2-----3-----4 29) Are you satisfied and proud of working for the organisation? 1-----2-----3-----4 30) What is the culture of your organisation? BABASABPATIL Page 72
Authoritarian
Participative
Mechanistic
Organic
31) Considering everything how satisfied are you with your job? Very dissatisfied Somewhat satisfied somewhat dissatisfied Very satisfied
32) Mention in brief what you feel could be done to improve the overall working conditions
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Graph depicting the overall job satisfaction level of the employees Satisfaction level To a very small extent To a small extent To a large extent To a very large extent percentage (%) 0 0 56.25 43.75
Job Satisfaction
0.0% 0.0% 43.8% 56.3% To a very small extent To a small extent To a large extent To a very large extent
Graph 11
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An Organisational Study on State Bank of India- Zonal Office, Bangalore The job satisfaction level of SBI, Zonal office, Bangalore is extremely good. 56.25% of the employees are happy with their job to a large extent. 43.75% of the employees are very much happy with their jobs.
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