case study on sbi bank wikipedia

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. TowerGroup is a wholly owned subsidiary of MasterCard Worldwide and operates as a separate business entity with complete editorial independence. MasterCard Worldwide is not responsible for and does not necessarily endorse any opinions, statements, or other content presented by TowerGroup. 1 central bank , the Reserve Bank of India , acquired the majority interest in the bank and changed its

name to the State Bank of India (SBI).

In 1959, the Indian government passed the State Bank of India Act, resulting in the acquisition (majority shareholding) of eight state-affiliated banks and the creation of the State Bank of India Group (SBI Group). The SBI itself is now majority owned by the Indian government, which purchased the shares held by the Reserve Bank of India. The State Bank of India and its affiliate banks are profiled in Exhibit 1.

Exhibit 1 Profile of the State Bank of India and Associate Banks (May 2008) Source: State Bank of India Group

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."

A lack of reliable communications and power (particularly in rural areas) hindered the implementation of computerization at Indian banks throughout the 1970s and 1980s. During this period, account information was typically maintained at the local branches with either semi- automated or manual ledger card processing. During the 1990s, the Indian economy began a period of rapid growth as the country's low labor costs, intellectual capital, and improving telecommunications technology allowed India to offer its commercial services on a global basis.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 2 This growth was also aided by the government's decision to allow the creation of private-sector banks (they had been nationalized in the 1960s). The private-sector banks, such as ICICI Bank and HDFC Bank, altered the banking landscape in India. They implemented modern centralized core banking systems and electronic delivery channels that allowed them to introduce new products and provide greater convenience to customers. As a result, the private-sector banks attracted middle- and upper-class customers at the expense of the public-sector banks. Additionally, foreign banks such as Standard Chartered Bank and Citigroup used their advanced automation capabilities to gain market share in the corporate and high-net-worth markets.

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 areas

• 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

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

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 3 systems. This practice led some people to doubt that the employees would effectively use the new

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.

Vendor Consortium Selection Recognizing the need for large-scale centralized systems expertise, SBI sought proposals from a number of vendor consortiums that were headed by the leading systems integrators. From these proposals, the bank narrowed down the potential solutions to vendor consortiums led by IBM and TCS. The TCS group included Hewlett-Packard, Australia-based Financial Network Services

(FNS), and China Systems (for trade finance).

Although SBI favored the real-time processing architecture of FNS's BaNCS system over that of the IBM consortium's memo post/batch update architecture, the bank had several concerns about the TCS consortium proposal. They included the small size and relatively weak financial strength of FNS (TCS would eventually purchase FNS in 2005) and the ability of the UNIX-based system to meet the scalability requirements of the bank. Therefore, it was agreed that TCS would be responsible for the required systems modifications and ongoing software maintenance for SBI. Additionally, scalability tests were performed at HP's lab in Germany to verify that the system was capable of meeting the bank's scalability requirements. These tests demonstrated the capability of TCS BaNCS to support the processing requirements of 75 million accounts and 19 million daily

transactions.

Tata Consultancy Services and TCS BaNCs Tata Consultancy Services, headquartered in Mumbai , India, is one of the world's largest technology companies with particular expertise in systems integration and business process outsourcing. The company has more than 130,000 employees located in 42 countries and achieved revenues of $5.7 billion in fiscal 2008. Although TCS has long been a leader in core systems integration services for banks, after it purchased FNS in 2005, the company also became a leading

global provider of core banking software for large banks.

The BaNCS system is based on service-oriented architecture (SOA) and is platform and database independent. In addition to SBI, TCS BaNCS clients include the Bank of China (installation in process), China Trust, Bank Negara Indonesia, India's Bank Maharashtra , National Commercial

Bank (Saudi Arabia), and Koram Bank (Korea).

TCS has also expanded its US footprint with the opening of its largest resource delivery center in North America (near Cincinnati, Ohio) that can house 20,000 personnel. The company is seeking to license and implement the BaNCS system in North America and recently completed a major part of

an effort to ensure that the BaNCS system meets US regulatory and compliance requirements.

Initial SBI Core Systems Modernization Project The contract for the initial project was completed in May 2002; 3,300 branches were to be converted by mid-2007. TCS immediately began a six-month gap analysis effort to determine the required software changes to the BaNCS system. The changes included installing required interfaces with more than 50 other systems as well as making enhancements to support the bank's product requirements. These product requirements were separated by customer segment to allow the vendor and bank to begin conversions before all the needed modifications were implemented. They placed a priority on the needed changes that would allow branches with high-net-worth

individuals and then corporate accounts to be converted as soon as possible.

Before the first conversion in August 2003, TCS and HP created the data processing environment for SBI. The primary data center was established on the outskirts of Mumbai and a backup center

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 4 was established approximately 1,000 miles to the east in Chennai . The centers were equipped with HP Superdome servers and XP storage systems in a failover configuration utilizing HP's UNIX

operating platform.

Initial Conversion Project The conversion effort began in August 2003, when SBI converted three pilot branches to the BaNCS system. The successful conversion and operation of the pilot branches was followed by the conversion of 350 retail branches with high-net-worth customers between August 2003 and September 2004. At this point, the bank intentionally halted the conversions to analyze and resolve reported problems. They analyzed, categorized, and prioritized these problems by type of resolution (e.g., software, procedural, training) and severity. TCS managed software revisions for the critical software changes while the branch personnel managed the needed training and

procedural changes.

After the software and procedural changes were implemented, SBI converted an additional 800 branches between December 2004 and March 2005. Unlike in the previous conversions, this group of branches included predominantly commercially oriented offices. The conversion effort then refocused on retail branches until November 2005, when the bank paused again to resolve

problems that came up during this second group of conversions.

After the second round of changes, the system and processes were functioning smoothly, and management believed the branch conversion could be accelerated. An assembly line approach

was then employed in April 2006 to speed the branch conversion process:

• Branch personnel were responsible for data scrubbing and cleaning of their customer information

on the existing system.

• Branches were notified three months prior to their conversion date to begin "mock," or test,

conversions using a specially created test version of the BaNCS system.

• Branches performed several test conversions to ensure the actual conversion went smoothly.

As the new core banking system was rolled out across the SBI branches nationwide, a special process was introduced in the nightly batch window to add the new branches. The process increased batch processing time approximately 20 minutes and typically included adding branches in groups of 50. This additional process, of course, was unnecessary upon completion of the rollout and has since been removed from the nightly batch window. TCS and local area branch managers oversaw the conversions, and the bank's circle (regional) heads formally reported the status to the

chairman's office.

By employing the assembly line approach for branch conversions, SBI was able to convert 1,200 branches in April and May 2006, completing the initial 3,300-branch conversion two months ahead of the original schedule. The milestones for the initial core systems implementation project are included in the SBI and affiliate banks core systems modernization time line in Exhibit 2.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 5

Exhibit 2 Time Line of State Bank of India and Affiliate Banks' Core Systems Modernization (2000–09) Source: Tata Consultancy Services (TCS)

Affiliate Banks' Conversion As the rollout plans for State Bank of India were being finalized, the bank decided to extend the scope of the core banking implementation to include its (then) eight affiliate banks. TCS created a

separate processing environment within the Mumbai data center used to support SBI.

The conversion effort for each of the affiliate banks spanned 18 to 24 months; the first six months were used for planning, training, and establishing the processing environment for the banks. The branch conversions overlapped among the banks, allowing all the affiliate banks to be converted in 30 months. The project was begun in July 2003 for the State Bank of Patiala and in 2004 for the other affiliate banks. All of the affiliate bank branches were converted to the BaNCS system by the

end of 2005, as reflected in Exhibit 2.

State Bank of India Full Branch Conversion

The success of the initial 3,300-branch conversion for SBI demonstrated that:

• TCS had the technical capabilities to support the bank's IT initiative and scale of operations.

• Bank personnel had the skills to adopt new processes and support the conversions.

• The Indian customer base would react to new technology by adopting new electronic services and

demanding new, more sophisticated banking products.

• An assembly line approach could be used effectively to support large-scale branch conversions.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 6

Given the success of the initial project and SBI's desire to offer new products to all of its customers, a new IT plan was created that would encompass all branches. TCS and the bank would have to

demonstrate the capability to process 100 million accounts in a single processing environment.

TCS and HP then conducted another scalability test in September 2006 to determine if the system could process SBI's entire base of 100 million accounts (excluding the affiliate banks, which use a separate processing environment) with sustained peak online throughput of 1,500 transactions per second. They conducted the test at HP Labs in Cupertino, California, using two 32-CPU HP 9000 Superdome application servers and two 32-processor Itanium Core HP Integrity servers for the database. The test achieved a sustained peak real-time transaction rate of more than 1,575 transactions per second, meeting the projected processing demands of SBI. Additionally, batch tests were run for both deposits and loan account processing. The month-end batch process for loans required 1 hour and 5 minutes, and deposit processing was completed in 2 hours and 27 minutes. These benchmarks were audited by Ernst & Young, and the test results are highlighted in Exhibit 3.

Exhibit 3 State Bank of India Scalability Test of TCS BaNCS System for Full Branch Conversion Source: Tata Consultancy Services (TCS)

Based on the successful scalability test, SBI decided to convert the approximately 6,700 remaining SBI branches to the BaNCS system. The conversion of the remaining branches began in June 2006, with the stated goal of completing the conversion by year-end 2008. Utilizing the assembly line conversion approach established in the initial phase, the bank converted 1,400 of these branches by March 2007.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 7

Because the conversion methodology and BaNCS system were thoroughly proven and stable, the assembly line conversion approach allowed the bank to complete the conversion ahead of schedule. Between April 2007 and March 2008 (the bank's fiscal year end), SBI converted 4,600

branches to the new system. The remaining branches were converted between April and July 2008.

Critical Success Factors Large-scale core systems implementations are typically the most costly and risky IT projects undertaken by banks. Failures of core systems projects are not uncommon at large banks and result in both financial impact and lost business opportunities. Further, failed projects lead other banks to delay needed core systems replacements because they measure the risk of failure against

the potential benefits of a new system.

TowerGroup believes that several critical factors contributed to the success of the SBI core

implementation effort:

• Senior management commitment. The project was driven by the chairman of SBI, who met every month with the information technology (IT) and the business sector heads. The chairman monitored the overall status and ensured that sufficient resources were allocated to the project. TCS senior managers were thoroughly committed to the project as well and periodically

met with the SBI chairman to review the project status.

• Staffing and empowerment of project team. The core banking team consisted of the bank's managing director of IT acting as team head and 75 business and IT people selected by the bank. TCS also staffed the project with approximately 300 IT professionals trained on the BaNCS system. Importantly, the SBI business people were viewed not just as contributors to a key project but as future bank leaders. This team reported to the SBI chairman and was empowered

with all decision-making authority.

• Ownership by business heads. The regional business line heads were responsible for the success of conversion of their respective branches and reported the status to the chairman.

Thus, the business heads' objectives were aligned with those of the project team.

• Focus on training. SBI used its network of 58 training centers across India to train employees on the new system. TCS personnel first educated approximately 100 SBI professional trainers, who then trained 100,000 SBI employees at the centers; the remaining employees

trained at their respective job sites.

Benefits of New Core Systems Implementation The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. For example, the new core banking system has allowed the bank to redesign processes. It established 400 regional processing centers for all metro and urban branches that have assumed functions previously performed in the individual branches. The bank recently

reported that business per employee increased by 250% over the last five years.

The bank has achieved its goal of offering its full range of products and services to its rural branches. It delivers economic growth to the rural areas and offers financial inclusion for all of

India's citizens.

Implementation of the TCS BaNCS system has provided the bank with the ability to consolidate the affiliate banks into SBI. In fact, the bank recently completed the consolidation of State Bank of

Saurashtra into SBI.

The bank has reversed the trend of customer attrition and is now gaining new market share. Completion of the core conversion project has also allowed the bank to undertake several new initiatives to further improve service and support future growth. These initiatives include the deployment of more than 3,000 rural sales staff, redesign of over 2,200 branches in the last fiscal year, opening of more than 1,000 new branches, establishment of a call center, and an active plan

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 8 to migrate customers to electronic delivery channels. The improvement in productivity and growth of business for the SBI Group is reflected in Exhibit 4.

Exhibit 4 Selected Business Results for State Bank of India Group (2002–07) Source: State Bank of India Group

Summary The implementation of the Tata Consultancy Services (TCS) BaNCS system at the State Bank of India (SBI) represents the largest core systems project ever undertaken. The success of this project

should encourage other large banks to begin projects to modernize their core systems.

The use of a UNIX-based platform to process more than 100 million accounts daily demonstrates that tier 1 banks can use a mainframe alternative for their core processing. Although TowerGroup expects that the majority of these banks will continue to rely on the IBM mainframe for core

processing, they can fully consider the benefits of utilizing a UNIX-based platform.

SBI's achievement demonstrates that attention to critical factors is crucial in implementing new core systems. The bank's senior management commitment, business line involvement, project team staffing and empowerment, and extensive employee training were all key contributors to the success of the project. Management also recognized the need for a proven systems integrator that

possessed in-depth expertise in both business and technology.

Core systems modernization has allowed the State Bank of India to centralize computer processing and operations functions, offer new banking products to all the citizens of India, reverse a trend of customer attrition, and consolidate its affiliate banks. Additionally, the bank can now further expand its product offerings and improve customer service.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 9

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Home » Articles » SBI Bank history

History of SBI bank: All You Need To Know

History of SBI bank – The State Bank of India (SBI Bank) is the biggest bank in India currently. It is a public sector bank, multinational in nature and is a financial services company. With a market share of 23% when it comes to assets, it also has a one-fourth share of the deposits and total loans market. Such is its popularity that MBA entrance exam candidates think of going for an SBI job! Read on to know everything there is to know about the biggest bank in India.

State Bank of India (SBI Bank) history

The State Bank of India (SBI Bank) was established in 1806, in Kolkata. Three years after that, it acquired its charter and was re-designed as Bank of Bengal in 1809. It was the very first joint-stock bank of India, which the Bengal Government sponsored. Apart from Bank of Bengal, the Bank of Madras and the Bank of Bombay was also part of this joint stock and remained at the center of the modern banking.

Initially, all three banks were Anglo-Indian creations and they came into play due to the following three reasons-

• Lack of modernization of the Indian economy due to several arbitrary reasons
• Local European commerce needs and requirements
• Compulsions imperial finance

The transformation or evolution of the State Bank of India came about due to the ideas adopted from the same movements happening in England and Europe. Another reason that contributed to this evolution was the changes and modifications in the local trading environment, along with India’s economic relationships with that of Europe and the global economic structure.

The current position of the State Bank of India (SBI Bank)

The State Bank of India is a giant in its own right, and there are several reasons that contribute to that. It is the oldest bank in the country currently if you go by the size of its balance sheet.

Additionally, its market capitalization, hundreds of bank branches and the number of profits are helping it give stiff competition to other private sector banks in the country.

Presently, the bank is getting into a couple of new business with strategic tie-ups, which have quite a large growth potential. Some of these tie-ups are General Insurance, Pension Funds, Private Equity, Custodial Services, Mobile Banking, Structured Products, Advisory Services, and Point of Sale Merchant Acquisition etc.

Additionally, it is concentrating on wholesale banking capacities and the top end of the market, in order to offer India’s corporate sector with numerous services and products.

Gaining entry in the field of derivative instruments and structured products along with the consolidation of the global treasury operations is also something they are focusing on now.

As of now, the State Bank of India is the biggest arranger responsible for external commercial borrowings in the country and is the biggest provider of infrastructure debt. In addition, it is the sole Indian bank to be a part of the Fortune 500 list.

Apart from banking, State Bank of India was also associated with non-profit ventures since 1973, such as Community Services Banking. In such cases, administrative offices and branches all over the country sponsor and take part in a huge number of social causes and welfare activities.

Additionally, they had also launched three digital banking facilities, in order to make financial transaction an easier affair for their customers.

Two of the digital banking facilities specialize in providing their services at the customers’ doorstep by utilizing the method of TAB banking (One for housing loan applicants and the other for customers looking to open a savings account).

The third banking facility specializes in the KYC process (Know Your Customer). The other services, which are offered by the State Bank of India, are the following-

• Personal Banking
• Rural/ Agriculture
• Small and Medium Enterprise (SME)
• Domestic Treasury
• NRI Services
• International Banking
• Corporate Banking
• Government Business

State Bank of India – Other Details

• Largest Indian Bank with 1/4th market share
• A Fortune 500 company
• serves over 45 crore customers
• Have  over 22,000 branches, 62617 ATMs/ADWMs, 71,968 BC outlets
• Have various subsidiaries i.e SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, SBI Card, etc
• Headquarters – Mumbai
• Current Chairman – Dinesh Kumar Khara

There are several reasons, which have contributed to making the State Bank of India (SBI Bank) the biggest and most popular bank in the country. Getting a job here is a matter of great respect and pride. Hence, if you are someone who wants a job here, make sure that you do your competitive exam preparation properly.

This is all from our side in this blog. Stay tuned. 

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Case study: How SBI creates economic value for its stakeholders

Founded in 1806 as the erstwhile Bank of Calcutta, State Bank of India (SBI) is the oldest commercial bank in the Indian subcontinent and India’s largest commercial bank in terms of assets, deposits, branches, number of customers and employees. As India’s largest bank, SBI seeks to generate economic value for all its stakeholders in a resilient, responsible and inclusive manner.     Tweet This!

This case study is based on the 2020-21 Sustainability Report by SBI , prepared in accordance with the GRI Standards, that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Being aware of its sizeable operations and the impact it has on the environment and society has made it more important for SBI to build a strong and consistent narrative on what the Bank stands for, by creating shared value for society and contributing towards the country’s development. In order to create economic value for its stakeholders SBI took action to:

• create economic value for employees
• create economic value for capital providers
• create economic value for the government
• create economic value for communities

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Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).

With this case study you will see:

• Which are the most important impacts (material issues) SBI has identified;
• How SBI proceeded with stakeholder engagement , and
• What actions were taken by SBI to create economic value for its stakeholders

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What are the material issues the company has identified?

In its 2020-21 Sustainability Report SBI identified a range of material issues, such as customer satisfaction, natural resource management, employee health and wellbeing, data security and customer privacy. Among these, creating economic value for its stakeholders stands out as a key material issue for SBI.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups SBI engages with:

To identify and prioritise material topics SBI engaged with its stakeholders through the following channels:  

What actions were taken by SBI to create economic value for its stakeholders ?

In its 2020-21 Sustainability Report SBI reports that it took the following actions for creating economic value for its stakeholders:

• Creating economic value for employees
• In FY 2020-21, SBI paid ₹ 50,936 crores for employee wages and benefits.
• Creating economic value for capital providers
• In FY 2020-21, SBI paid ₹ 3,570 crores to capital providers.
• Creating economic value for the government
• In FY 2020-21, SBI paid ₹ 151 crores to the government (net cash outgo on account of corporate income tax).
• Creating economic value for communities
• In FY 2020-21, SBI paid ₹ 145 crores in community investments.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed

Disclosure 201-1 Direct economic value generated and distributed corresponds to:

• Sustainable Development Goal (SDG) 8 : Decent Work and Economic Growth
• Targets: 8.1, 8.2
• Sustainable Development Goal (SDG) 9 : Industry, Innovation and Infrastructure
• Targets: 9.1, 9.4, 9.5

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that  responsible companies can look to the future with optimism .

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, IEMA, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

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• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates. References:

This case study is based on published information by SBI, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://sbi.co.in/documents/17826/24401/140621-Sustainability+Report%28SR%29+year+2020-21.pdf/ba271367-9542-e96a-0589-2968954b2e17?t=1623659643326

Note to SBI: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us .

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State Bank of India (SBI) , state-owned commercial bank and financial services company, nationalized by the Indian government in 1955. SBI maintains thousands of branches throughout India and offices in dozens of countries throughout the world. The bank’s headquarters are in Mumbai .

The oldest commercial bank in India, SBI originated in 1806 as the Bank of Calcutta. Three years later the bank was issued a royal charter and renamed the Bank of Bengal. Along with the Bank of Bombay (founded 1840) and the Bank of Madras (founded 1843), it was one of three so-called presidency banks, each of which was jointly owned by the provincial government and private subscribers. In 1921 the presidency banks were merged to form the Imperial Bank of India (IBI), which then became the largest commercial enterprise in the country. In 1955 the government of India and the country’s central bank , the Reserve Bank of India (founded 1935), assumed joint ownership of IBI, which was renamed the State Bank of India. Four years later, by the State Bank of India (Subsidiary Banks) Act, banks earlier operated by individual princely states became subsidiaries of SBI. The Reserve Bank’s share of SBI was transferred to the government in 2007. Since nationalization, SBI has served the needs of Indian economic development through rural-development initiatives and microcredit programs and by financing major agricultural and industrial projects and raising loans for the government.

SBI is governed by a board of directors headed by a chairman. The chairman and managing directors of the bank are appointed by the government.

State Bank of India (SBI): History, Headquarters, Current Position, Logo & More

The history of State Bank of India starts from the establishment of Bank of Calcutta in 1806. Later in 1921, Bank of Calcutta merged with Bank of Bombay and Madras to form Imperial Bank of India which was nationalised in 1955 and named as State Bank of India.

The State Bank of India (SBI) was established in 1955 as a nationalised bank and now has a market cap of Rs 667,650.22 crore. Initially, it was established as the Bank of Calcutta. SBI is currently headed by Dinesh Kumar Khara since 2020.

Later, it evolved into SBI, with many mergers, and portrayed a fascinating institutional growth. Today, it stands high as the largest and oldest public sector bank, spanning across the entire nation and beyond international borders.

In this exploration of the history of SBI, you can find the details of its establishment, navigate through its transformative journey, and examine its current position in the banking sector. 

History of State Bank of India (SBI)

The history of the State Bank of India (SBI) spans over two centuries. Let’s start with its early foundations.

Early Foundations:

The roots of SBI start with the establishment of the Bank of Calcutta in 1806. In the following years, the Bank of Bombay and the Bank of Madras were founded. All these three banks were operated independently until 1921. 

Merger and Formation of Imperial Bank of India (1921):

In the year 1921, the banks of Calcutta, Bombay, and Madras were required to form one single Bank, Imperial Bank of India this Bank served as the central bank for the next 30 years.

Nationalization and Emergence of State Bank of India (1955):

In 1955, the Imperial Bank was nationalised and renamed as State Bank of India to promote the banking service to every corner of the country to foster economic development.

Expansion and Diversification:

In the following decade, SBI started opening many branches across the country, including the remote areas. The bank also diversified and got into IT services with retail banking, corporate banking treasury operations, and International Banking.

Merger with Associate Banks (2017):

In 2017, SBI merged with five other associate banks  (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore). It is one of the largest banking networks in India.

SBI Headquarters

Subsidiaries of State Bank of India

Sbi capital markets limited.

Subsidiary of the State Bank of India, India’s premier investment banker, which has been at the forefront of providing comprehensive financial services for the last seven decades.

SBI Capital Markets Limited (SBICAPs) is recognised as a Market Leader in Project Advisory, Capital Markets, and Debt Capital Markets through unique, winning, and innovative strategies.

SBI Cards and Payments Services Limited (SBICPSL) 

SBI Cards and Payments Services Limited (SBICPSL) is a non-banking financial company that provides credit card services to individuals and corporations in India and abroad. It is a subsidiary of the State Bank of India, in which the latter holds a 69.51 percent stake.

SBICPSL offers a broad range of credit card products utilizing technology for better customer service delivery.

SBI Life Insurance Company Limited 

The SBI Life Insurance Company Limited (SBILIFE) is a leading listed life insurance company in the country that was set up in 2001.

With a wide array of individual as well as group insurance solutions through their Savings, Protection, Pension, and Health products, the company caters to various customer needs.

The company has built one of India’s strongest distribution networks, including bancassurance with State Bank, the country’s largest partner; and a large agent network. 

SBI General Insurance Company Limited

SBI General Insurance Company Limited, initially a joint venture between SBI and IAG International Pty Limited, achieved a milestone as the first non-life insurer in India to surpass ₹6,000 Crores in a decade.

Following divestments, SBI holds 70%, and Napean Opportunities LLP and Honey Wheat Investments Ltd have acquired former partner IAG’s stake.

SBI SG Global Securities Services Private Limited

SBI SG Global Securities Services Private Limited (SBI-SG), a joint venture between the State Bank of India and Societe Generale, prioritizes top-notch custodial and fund administration services.

With 65% SBI ownership, it started operations in 2010, reporting a Net Profit of ₹61.96 Crore on March 31, 2020, compared to ₹34.45 crore in 2019, accumulating a profit of ₹141.86 crore. 

SBI Foundation

SBI Foundation, established in 2015 by the State Bank of India, operates as a Section VIII company under the Companies Act (2013).

Dedicated to CSR activities, it focuses on the socio-economic well-being of marginalized communities.

With a commitment to ‘Service Beyond Banking,’ the foundation spent ₹14.65 crores in FY2020, with grants totaling ₹27.81 crores, ensuring ongoing support for transformative initiatives.

State Bank of India – Current Position

Today, the State Bank of India is the largest public sector bank with many branches and a presence in various financial segments.

Interesting Facts About State Bank of India

Oldest Banknote: SBI has the distinction of issuing the world’s largest and oldest banknote. The note, issued in 1948, featured a portrait of George VI and a denomination of 10,000 rupees.

Green Banking: SBI is committed to environmental sustainability. It has implemented various eco-friendly practices, including using solar power in some branches and adopting green banking initiatives to reduce its carbon footprint.

Bank with a Heart: SBI has been involved in numerous social initiatives. It has pioneered projects like the ‘Gift Hope, Gift Life’ campaign, encouraging organ donation and supporting causes related to health and education.

Unique Corporate Headquarters: The State Bank of India is headquartered in Mumbai and is an architectural marvel. The building is designed in the Indo-Saracenic style and stands as a symbol of the bank’s heritage and influence.

Record-breaking IPO: SBI’s life insurance arm, SBI Life, had one of the most substantial IPOs in India’s history in 2017. It raised over ₹8,400 crores, making it one of the largest insurance IPOs in the country.

Blockchain Initiatives: SBI has explored blockchain technology for various applications, including streamlining its Know Your Customer (KYC) process and enabling more efficient trade finance operations.

International Recognition: SBI has gained international recognition for its achievements. It was ranked as the 43rd largest bank in the world by total assets in 2021, according to The Banker’s Top 1000 World Banks ranking.

The Story Behind the State Bank of India Logo

The State Bank of India (SBI) logo, also known as the SBI Blue Wheel, has undergone several transformations over the years. Each element holds significance:

Initial Logo: When the bank was first established as the Bank of Calcutta in 1806, it used a simple logo featuring the bank’s name.

Imperial Bank of India Logo: After the merger of the Bank of Calcutta, Bank of Bombay, and Bank of Madras in 1921 to form the Imperial Bank of India, a new logo was introduced. It featured a Bengal tiger, symbolizing strength, and a palm tree, representing prosperity.

State Bank of India Logo: When the Imperial Bank of India became the State Bank of India in 1955, a new logo was introduced. This logo featured a keyhole symbolizing safety and the integral role of the bank in securing people’s money. The keyhole was often accompanied by a supporting icon, such as a semi-circle or a wheel, representing progress.

Modern SBI Logo: The current SBI logo was introduced in 2006 on the occasion of the bank’s bicentennial celebration. It features a blue circle with a small cut at the bottom, resembling an incomplete wheel. The wheel represents progress and continuity, while the cut suggests a forward-moving dynamism and a break from the past. The blue colour represents trust, loyalty, and integrity.

This logo was first unveiled on Oct. 1, 1971 and was designed by Shekhar Kamat, a NID, Ahmedabad Alumni.

Digital Transformation:

SBI embraced digital banking like no other and swiftly introduced online and mobile banking services, making their banking services more accessible and convenient to customers.

The current SBI bank timings can vary depending on the region but the digital banking can be accessed from anywhere in the world using an active internet connection.

Frequently Asked Questions (FAQs)

What is the old name of the state bank of india.

The State Bank of India was originally established as the Bank of Calcutta in 1806. It went through several name changes over the years. After the merger of the Bank of Calcutta, Bank of Bombay, and Bank of Madras in 1921, it became the Imperial Bank of India. Finally, in 1955, it was nationalized and became the State Bank of India (SBI).

After this, there has been several bank mergers in India such as State Bank of India merges with its associated banks, Bank of Baroda merged with Dena Bank and Vijaya Bank  and so on.

Who was the first chairman of SBI?

John Mathai was the first chairman of SBI.

What is Bharat InstaPay?

Bharat InstaPay is a UPI-based payment platform started with the collaboration of BSNL and SBI to enable all BSNL partners to purchase services for sale.

Why is it the ‘State’ Bank of India and not the ‘National’ Bank of India?

The term ‘State’ in the State Bank of India does not refer to any specific state within the country. Instead, it denotes that the bank is a state-owned enterprise, with the government having a significant ownership stake. The term ‘national’ is not used in the name, but the bank functions at the national level and is one of the largest and most prominent banks in the country. The name reflects its ownership and nationwide presence rather than being limited to a particular state.

What is the minimum amount required to open a current account in the State Bank of India?

The minimum amount required to open a current account in the State Bank of India varies depending on the type of current account. Generally, it can range from a few thousand to several thousand rupees. It’s advisable to check with the bank or visit the official website for the most accurate and up-to-date information.

SBI In The Latest News

Slight Dip in SBI Cards Shares Amidst Moderate Trading Activity

SBI Cards and Payment Services Ltd. shares traded slightly lower, down 0.42%, with 249,760 shares changing hands. The stock opened at Rs 721.1, reaching an intraday high of Rs 724.6 and a low of Rs 714.2. Over the past 52 weeks, the shares have ranged from a high of Rs 932.35 to a low of Rs 699.15.

SBI Economic Research Report: India’s GDP Surges to 8.4% in FY24 Q3 The State Bank of India’s Economic Research Department, in its report titled “When 8 cent becomes the new normal,” unveils insights into India’s Economic Landscape. India’s remarkable 8.4% GDP growth in the third quarter of FY24, attributed to effective policy frameworks, defies expectations. Projections for FY24 indicate a 7.6% GDP growth and 6.9% Gross Value Added. 

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