INDUSTRY OVERVIEW History:

Banking in India has its origin as carry 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 the interest. During the mogal period, the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. During the days of East India Company, it was to turn of the agency houses top carry on the banking business. The general bank of India was the first joint stock bank to be established in the year 1786.The others which followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906, while the other two failed in the meantime. In the first half of the 19th Century the East India Company established three banks; The Bank of Bengal in 1809, The Bank of Bombay in 1840 and The Bank of Madras in 1843.These three banks also known as presidency banks and were independent units and functioned well. These three banks were amalgamated in 1920 and The Imperial Bank of India was established on the 27th Jan 1921, with the passing of the SBI Act in 1955, the undertaking of The Imperial Bank of India was taken over by the newly constituted SBI. The Reserve Bank which is the Central Bank was created in 1935 by passing of RBI Act 1934, in the wake of swadeshi movement, a number 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 19th 1969, 14 Major Banks of the country were nationalized and in 15th April 1980 six more commercial private sector banks were also taken over by the government. The Indian Banking industry, which is governed by the Banking Regulation Act of India 1949, can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled Banks comprise commercial banks and the co-operative banks.

The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from class banking to mass banking. This in turn resulted in the significant

growth in the geographical coverage of banks. Every bank had to earmark a min percentage of their loan portfolio to sectors identified as priority sectors the manufacturing sector also grew during the 1970s in protected environments and the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980 since then the number of scheduled commercial banks increased four- fold and the number of bank branches increased to eight fold.

After the second phase of financial sector reforms and liberalization of the sector in the early nineties. The PSBs found it extremely difficult to complete with the new private sector banks and the foreign banks. The new private sector first made their appearance after the guidelines permitting them were issued in January 1993.

The Indian Banking System:

Banking in our country is already witnessing the sea changes as the banking sector seeks new technology and its applications. The best port is that the benefits are beginning to reach the masses. Earlier this domain was the preserve of very few organizations. Foreign banks with heavy investments in technology started giving some Out of the world customer services. But, such services were available only to selected few- the very large account holders. Then came the liberalization and with it a multitude of private banks, a large segment of the urban population now requires minimal time and space for its banking needs.

Automated teller machines or popularly known as ATM are the three alphabets that have changed the concept of banking like nothing before. Instead of tellers handling your own cash, today there are efficient machines that dont talk but just dispense cash. Under the

Reserve Bank of India Act 1934, banks are classified as scheduled banks and non-scheduled

banks. The scheduled banks are those, which are entered in the Second Schedule of RBI Act, 1934. Such banks are those, which have paid- up capital and reserves of an aggregate value of not less then Rs.5 lacs and which satisfy RBI that their affairs are carried out in the interest of their depositors. All commercial banks Indian and Foreign, regional rural banks and state cooperative banks are Scheduled banks. Non Scheduled banks are those, which have not been included in the Second Schedule of the RBI Act, 1934.

The organized banking system in India can be broadly classified into three categories: (i) Commercial Banks (ii) Regional Rural Banks and (iii) Co-operative banks. The Reserve Bank of India is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the country. It keeps the reserves of all commercial banks and hence is known as the Reserve Bank.

Current scenario:Currently (2007), the overall banking in India is considered as fairly mature in terms of supply, product range and reach - even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and Capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets - as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the Government

With the growth in the Indian economy expected to be strong for quite some time especially in its services sector, the demand for banking services especially retail banking, mortgages and investment services are expected to be strong. Mergers & Acquisitions., takeovers, are much more in action in India.

One of the classical economic functions of the banking industry that has remained virtually unchanged over the centuries is lending. On the one hand, competition has had considerable

adverse impact on the margins, which lenders have enjoyed, but on the other hand technology has to some extent reduced the cost of delivery of various products and services.

Bank is a financial institution that borrows money from the public and lends money to the public for productive purposes. The Indian Banking Regulation Act of 1949 defines the term Banking Company as "Any company which transacts banking business in India" and the term banking as "Accepting for the purpose of lending all investment of deposits, of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft or otherwise".

Banks play important role in economic development of a country, like: y Banks mobilise the small savings of the people and make them available for productive purposes. Promotes the habit of savings among the people thereby offering attractive rates of interests on their deposits. Provides safety and security to the surplus money of the depositors and as well provides a convenient and economical method of payment. Banks provide convenient means of transfer of fund from one place to another. Helps the movement of capital from regions where it is not very useful to regions where it can be more useful. Banks advances exposure in trade and commerce, industry and agriculture by knowing their financial requirements and prospects. Bank acts as an intermediary between the depositors and the investors. Bank also acts as mediator between exporter and importer who does foreign trades.

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Thus Indian banking has come from a long way from being a sleepy business institution to a highly pro-active and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and

lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances.

The Structure of Indian Banking:

The Indian banking industry has Reserve Bank of India as its Regulatory Authority. This is a mix of the Public sector, Private sector, Co-operative banks and foreign banks. The private sector banks are again split into old banks and new banks.

Reserve Bank of India [Central Bank]

Scheduled Banks

Scheduled Commercial Banks

Scheduled Co-operative Banks

Public Sector Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks

Nationalized Banks

SBI & its Associates

Scheduled Urban Co-Operative Banks

Scheduled State Co-Operative Banks

Old Private Sector Banks

New Private Sector Banks

Chart Showing Three Different Sectors of Banks

i) ii)

Public Sector Banks Private Sector Banks

Public Sector Banks

SBI and SUBSIDIARIES Nationalized Banks Regional Rural Banks

SBI and subsidiaries

This group comprises of the State Bank of India and its seven subsidiaries viz., State Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Saurashtra, State Bank of India State Bank of India (SBI) is the largest bank in India. If one measures by the number of branch offices and employees, SBI is the largest bank in the world. Established in 1806as Bank of Bengal it is the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The government nationalized the bank in1955, with the Reserve bank of India taking a 60% ownership stake. In recent years the bank has focused on two priorities, 1), reducing its huge staff through Golden handshakeschemes known as the Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private sector, and 2), computerizing its operations.

The State Bank of India traces its roots to the first decade of19th century, when the Bank of culcutta, later renamed theBank of bengal, was established on 2 jun 1806. The government amalgamatted Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay and the bank of Madras, and named the reorganized banking entity the Imperial Bank of India. All these Presidency banks were incorporated ascompanies, and were the result of theroyal charters. The Imperial Bank of India continued to remain a joint stock company. Until the

establishment of a central bank in India the Imperial Bank and its early predecessors served as the nation's central bank printing currency. The State Bank of India Act 1955, enacted by the parliament of India, authorized the Reserve Bank of India, which is the central Banking Organisationof India, to acquire a controlling interest in the Imperial Bank of India, which was renamed the State Bank of India on30th April 1955. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.

Nationalized banks
This group consists of private sector banks that were nationalized. The Government of India nationalized 14 private banks in 1969 and another 6 in the year 1980. In early 1993, there were 28 nationalized banks i.e., SBI and its 7 subsidiaries plus 20 nationalized banks. In 1993, the loss making new bank of India was merged with profit making Punjab National Bank. Hence, now only 27 nationalized banks exist in India.

Regional Rural banks

These were established by the RBI in the year 1975 of banking commission. It was established to operate exclusively in rural areas to provide credit and other facilities to small and marginal farmers, agricultural laborers, artisans and small entrepreneurs.

Private Sector Banks

Private Sector Banks
Old private Sector Banks new private Sector Banks

Old Private Sector Banks

This group consists of the banks that were establishes by the privy sectors, committee organizations or by group of professionals for the cause of economic betterment in their operations. Initially, their operations were concentrated in a few regional areas. However, their branches slowly spread throughout the nation as they grow.

New private Sector Banks

These banks were started as profit orient companies after the RBI opened the banking sector to the private sector. These banks are mostly technology driven and better managed than other banks.

Foreign banks
These are the banks that were registered outside India and had originated in a foreign country. The major participants of the Indian financial system are the commercial banks, the financial institutions (FIs), encompassing term-lending institutions, investment

institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The commercial banks and certain variants of NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial market place.

IMPORTANCE OF BANKING SECTOR IN A GROWING ECONOMY In the recent times when the service industry is attaining greater importance compared to manufacturing industry, banking has evolved as a prime sector providing financial services to growing needs of the economy.

Banking industry has undergone a paradigm shift from providing ordinary banking services in the past to providing such complicated and crucial services like, merchant banking, housing finance, bill discounting etc. This sector has become more active with the entry of new players like private and foreign banks. It has also evolved as a prime builder of the economy by understanding the needs of the same and encouraging the development by way of giving loans, providing infrastructure facilities and financing activities for the promotion of entrepreneurs and other business establishments.

For a fast developing economy like ours, presence of a sound financial system to mobilize and allocate savings of the public towards productive activities is necessary. Commercial banks play a crucial role in this regard.

The Banking sector in recent years has incorporated new products in their businesses, which are helpful for growth. The banks have started to provide fee-based services like, treasury operations, managing derivatives, options and futures, acting as bankers to the industry during the public offering, providing consultancy services, acting as an intermediary between twobusiness entities etc.At the same time, the banks are reaching

out to other end of customer requirements like, insurance premium payment, tax payment etc. It has changed itself from transaction type of banking into relationship banking, where you find friendly and quick service suited to your needs. This is possible with understanding the customer needs their value to the bank, etc. This is possible with the help of well organized staff, computer based network for speedy transactions, products like credit card, debit card, health card, ATM etc. These are the present trend of services. The customers at present ask for convenience of banking transactions, like 24 hours banking, where they want to utilize the services whenever there is a need. The relationship banking plays a major and important role in growth, because the customers now have enough number of opportunities, and they choose according to their satisfaction of responses and recognition they get. So the banks have to play cautiously, else they may lose out the place in the market due to competition, where slightest of opportunities are captured fast.

Another major role played by banks is in transnational business, transactions and networking. Many leading Indian banks have spread out their network to other countries, which help in currency transfer and earn exchange over it.

These banks play a major role in commercial import and export business, between parties of two countries. This foreign presence also helps in bringing in the international standards of operations and ideas. The liberalization policy of 1991 has allowed many foreign banks to enter the Indian market and establish their business. This has helped large amount of foreign capital inflow & increase our Foreign exchange reserve.

Another emerging change happening all over the banking industry is consolidation through mergers and acquisitions. This helps the banks in strengthening their empire and expanding their network of business in terms of volume and effectiveness.

EMERGING SCENARIO IN THE BANKING SECTOR

The Indian banking system has passed through three distinct phases from the time of inception. The first was being the era of character banking, where you were recognized as a credible depositor or borrower of the system. This era come to an end in the sixties. The

second phase was the social banking. Nowhere in the democratic developed world, was banking or the service industry nationalized. But this was practiced in India. Those were the days when bankers has no clue whatsoever as to how to determine the scale of finance to industry. The third era of banking which is in existence today is called the era of Prudential Banking. The main focus of this phase is on prudential norms accepted internationally.

SBI Group-

The Bank of Bengal, which later became the State Bank of India. State Bank of India with its seven associate banks commands the largest banking resources in India.

NationalisationThe next significant milestone in Indian Banking happened in late 1960s when the then Indira Gandhi government nationalized on 19th July 1949, 14 major commercial Indian banks followed by nationalisation of 6 more commercial Indian banks in 1980. The stated reason for the nationalisation was more control of credit delivery. After this, until 1990s, the nationalised banks grew at a leisurely pace of around 4% also called as the Hindu growth of the Indian economy.After the amalgamation of New Bank of India with Punjab National Bank, currently there are 19 nationalised banks in India.

LiberalizationIn the early 1990s the then Narasimha rao government embarked a policy of liberalization and gave licences to a small number of private banks, which came to be known as New generation tech-savvy banks, which included banks like ICICI and HDFC. This move along with the rapid growth of the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the sectors of banks, namely Government banks, Private Banks and Foreign banks. However there had been a few hiccups for these new banks with many either being taken over like Global Trust Bank while others like Centurion Bank have found the going tough. The next stage for the Indian Banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in Banks may be given voting rights which could exceed the present cap of 10%, at pesent it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more.

CURRENT SCENARIOCurrently (2007), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unravelling in China) will happen on this front in India.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

Banking in India
1 Central Bank Reserve Bank of India State Bank of India, Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of

Maharastra,Canara Bank, Central Bank of India, 2 Nationalised Banks Corporation Bank, Dena Bank, Indian Bank, Indian overseas Bank,Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, Syndicate Bank, Union Bank of India, United Bank of India, UCO Bank,and Vijaya Bank. Bank of Rajastan, Bharath overseas Bank, Catholic Syrian Bank, Centurion Bank of Punjab, City Union Bank, Development Credit Bank, Dhanalaxmi Bank, 3 Private Banks Federal Bank, Ganesh Bank of Kurundwad, HDFC Bank, ICICI Bank, IDBI, IndusInd Bank, ING Vysya Bank, Jammu and Kashmir Bank, Karnataka Bank Limited, Karur Vysya Bank, Kotek Mahindra Bank, Lakshmivilas Bank, Lord Krishna Bank, Nainitak Bank, Ratnakar Bank,Sangli Bank, SBI Commercial and

International Bank, South Indian Bank, Tamil Nadu Merchantile Bank Ltd., United Western Bank, UTI Bank, YES Bank.

COMPANY PROFILE

STATE BANK OF INDIA

Not only many financial institution in the world today can claim the antiquity and majesty of the State Bank Of India founded nearly two centuries ago with primarily intent of imparting stability to the money market, the bank from its inception mobilized funds for supporting both the public credit of the companies governments in the three presidencies of British India and the private credit of the European and India merchants from about 1860s when the Indian economy book a significant leap forward under the impulse of quickened world communications and ingenious method of industrial and agricultural production the Bank became intimately in valued in the financing of practically and mining activity of the Sub- Continent Although large European and Indian merchants and manufacturers were undoubtedly thee principal beneficiaries, the small man never ignored loans as low as Rs.100 were disbursed in agricultural districts against glad ornaments. Added to these the bank till the creation of the Reserve Bank in 1935 carried out numerous Central Banking functions.

Adaptation world and the needs of the hour has been one of the strengths of the Bank, In the post depression exe. For instance when business opportunities become extremely restricted, rules laid down in the book of instructions were relined to ensure that good business did not go post.

Yet seldom did the bank contravenes its value as depart from sound banking principles to retain as expand its business. An innovative array of office, unknown to the world then, was devised in the form of branches, sub branches, treasury pay office, pay office, sub pay office and out students to exploit the opportunities of an expanding economy. New business strategy was also evaded way back in 1937 to render the best banking service through prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well defined organizational structure did not take long to place the bank an executed pedestal in the areas of business, profitability, internal discipline and above all credibility A impeccable

financial status consistent maintenance of the lofty traditions if banking an observation of a high standard of integrity in its operations helped the bank gain a pre- eminent status. No wonders the administration for the bank was universal as key functionaries of India successive finance minister of independent India Resource Bank of governors and representatives of chamber of commercial showered economics on it.

Modern day management techniques were also very much evident in the good old days years before corporate governance had become a puzzled the banks bound functioned with a high degree of responsibility and concerns for the shareholders. An unbroken records of profits and a fairly high rate of profit and fairly high rate of dividend all through ensured satisfaction, prudential management and asset liability management not only protected the interests of the Bank but also ensured that the obligations to customers were not met. The traditions of the past continued to be upheld even to this day as the State Bank years itself to meet the emerging challenges of the millennium.

PRODUCTS:
State Bank Of India renders varieties of services to customers through the following products:

Personal Loan Product:

SBI Term Deposits SBI Recurring Deposits SBI Housing Loan SBI Car Loan SBI Educational Loan SBI Personal Loan SBI Loan For Pensioners Loan Against Mortgage Of Property Loan Against Shares & Debentures Rent Plus Scheme Medi-Plus Scheme Rates Of Interest

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SBI Housing loan SBI Housing loan or Mortgage Loan schemes are designed to make it simple for you to make a choice at least as far as financing goes!

'SBI-Home Loans' features:

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No cap on maximum loan amount for purchase/ construction of house/ flat

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Option to club income of your spouse and children to compute eligible loan amount Provision to club expected rent accruals from property proposed to compute eligible loan amount Provision to finance cost of furnishing and consumer durables as part of project cost

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Repayment permitted upto 70 years of age Free personal accident insurance cover Optional Group Insurance from SBI Life at concessional premium (Upfront premium financed as part of project cost)

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Interest applied on daily diminishing balance basis 'Plus' schemes which offer attractive packages with concessional interest rates to Govt. Employees, Teachers, Employees in Public Sector Oil Companies.

Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat

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No Administrative Charges or application fee Prepayment penalty is recovered only if the loan is pre-closed before half of the original tenure (not recovered for bulk payments provided the loan is not closed)

Provision for downward refixation of EMI in respect of floating rate borrowers who avail Housing Loans of Rs.5 lacs and above, to avail the benefit of downward revision of interest rate by 1% or more

In-principle approval issued to give you flexibility while negotiating purchase of a property

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Option to avail loan at the place of employment or at the place of construction Attractive packages in respect of loans granted under tie-up with Central/ State Governments/ PSUs/ reputed corporates and tie-up with reputed builders (Please contact your nearest branch for details)

SERVICES:

 

DOMESTIC TREASURY SBI VISHWA YATRA FOREIGN TRAVEL CARD

         

BROKING SERVICES REVISED SERVICE CHARGES ATM SERVICES INTERNET BANKING E-PAY E-RAIL RBIEFT SAFE DEPOSIT LOCKER GIFT CHEQUES MICR CODES FOREIGN INWARD REMITTANCES

ATM SERVICES

STATE BANK NETWORKED ATM SERVICES State Bank offers you the convenience of over 8000 ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of

Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card. KINDS OF CARDS ACCEPTED AT STATE BANK ATMs Besides State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit Cards following cards are also accepted at State Bank ATMs: 1) State Bank Credit Card 2) ATM Cards issued by Banks under bilateral sharing viz. Andhra Bank,Axis Bank, Bank of India, The Bank of Rajasthan Ltd., Canara Bank, Corporation Bank, Dena Bank, HDFC Bank, Indian Bank, Indus Ind Bank, Punjab National Bank, UCO Bank and Union Bank of India. 3) Cards issued by banks (other than banks under bilateral sharing) displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos

4) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos Note: If you are a cardholder of bank other than State Bank Group, kindly contact your Bank for the charges recoverable for usage of State Bank ATMs.
STATE BANK INTERNATIONAL ATM-CUM-DEBIT CARD

Eligibility: All Saving Bank and Current Account holders having accounts with networked branches and are: y y y 18 years of age & above Account type: Sole or Joint with Either or Survivor / Anyone or Survivor NRE account holders are also eligible but NRO account holders are not.

Benefits:
y y y y Convenience to the customers traveling overseas Can be used as Domestic ATM-cum-Debit Card Available at a nominal joining fee of Rs. 200/Daily limit of US $ 1000 or equivalent at the ATM and US $ 1000 or equivalent at Point of Sale (POS) terminal for debit transaction y y Purchase Protection*up to Rs. 5000/- and Personal Accident cover*up to Rs. 2,00,000/Charges for usage abroad: Rs. 150+ Service Tax per cash withdrawal Rs. 15 + Service Tax per enquiry.

State Bank ATM-cum-Debit (State Bank Cash plus) Card: Indias largest bank is proud to offer you unparalleled convenience viz. State Bank ATM-cumDebit(Cash Plus) card. With this card, there is no need to carry cash in your wallet. You can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit Card. Get an ATM-cum-Debit card with which you can transact for FREE at any of over 8000 ATMs of State Bank Group within our country.

SBI GOLD INTERNATIONAL DEBIT CARDS

E-PAY Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone, Mobile, Electricity, Insurance and Credit Card bills electronically over our Online SBI website

E-RAIL

Book your Railways Ticket Online. The facility has been launched wef Ist September 2003 in association with IRCTC. The scheme facilitates Booking of Railways Ticket Online. The salient features of the scheme are as under: y All Internet banking customers can use the facility.

On giving payment option as SBI, the user will be redirected to onlinesbi.com. After logging on to the site you will be displayed payment amount, TID No. and Railway reference no.

. The ticket can be delivered or collected by the customer.

The user can collect the ticket personally at New Delhi reservation counter .

The Payment amount will include ticket fare including reservation charges, courier charges and Bank Service fee of Rs 10/. The Bank service fee has been waived unto 31st July 2006.

SAFE DEPOSIT LOCKER

For the safety of your valuables we offer our customers safe deposit vault or locker facilities at a large number of our branches. There is a nominal annual charge, which depends on the size of the locker and the centre in which the branch is located.

NRI HOME LOAN

SALIENT FEATURES

Purpose of Loan Loans to NRIs & PIOs can be extended for the following purposes.
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To purchase/construct a new house / flat To repair, renovate or extend an existing house/flat

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To purchase an existing house/flat To purchase a plot for construction of a dwelling unit. To purchase furnishings and consumer durables, as a part of the project cost

AGRICULTURE / RURAL

State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 6600 rural and semi-urban branches. here 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 hitech commercial agricultural projects.

COMPARISON OF LOANS & ADVANCES OF STATE BANK OF INDIA WITH OTHER PUBLIC AND PRIVATE SECTOR BANKS For the year 2003: Name Of the Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank Amt of advances 137758.46 16305.35 40471.60 12029.17 11754.86 52474.48 7179.92

loans And Advances for the year 2003

140000 120000 100000 Amount 80000 60000 40000 20000 0 1 2 3 4 5 6 7 8 Banks Series1 Series2

For the year 2004:

Name Of the Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Amt of advances 157933.54 20646.93 47638.62 13889.72 17744.51 60757.36 9362.95

loans and Advances for the year 2004

160000 140000 120000 100000 Amount 80000 60000 40000 20000 0 1 2 3 4 5 6 7 8 Names of banks Series1 Series2

For the year 2005:

Name Of the Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Amt of advances 202374.46 26729.21 60421.40 18546.37 25566.30 88991.75 15602.92

loans and Advances for the year 2005

250000 200000 150000 Amount 100000 50000 0 1 2 3 4 5 6 7 8 Numbers of Banks Series1 Series2

For the year 2006:

Name Of the Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Amt of advances 261641.54 36466.24 79425.69 23962.43 35061.26 143029.89 22314.23

loans and Advance for the year 2006

300000 250000 200000 Amount 150000 100000 50000 0 1 2 3 4 5 6 7 8 Number of banks Series1 Series2

For the year 2007: Name Of the Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank Amt of advances 337336.49 51670.44 98505.69 29949.65 46944.78 164484.38 36876.48

Loans & Advances for the year 2007

350000 300000 250000 Amount 200000 150000 100000 50000 0 1 2 3 4 5 6 7 8 Name of Banks Banks Amt

Interpretation:
Considering the above data we can say that year on year the amount of advances lent by State Bank of India has increased which indicates that the banks business is really commendable and the Credit Policy it has maintained is absolutely good. Whereas other banks do not have such good business SBI is ahead in terms of its business when compared to both Public Sector and Private Sector banks, this implies that SBI has incorporated sound business policies in its bank.

COMPARISON STUDY ON CREDIT RECOVERY MANAGEMENT For the year 2004:

Loans Issued Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank 157933.54 20646.62 47638.62 14889.72 17744.51

Recovered

Outstanding

91601.4 11562.11 27058.74 7500 9670.75

66332.09 9084.5 20579.88 6389.72 8073.76

ICICI Bank UTI Bank

60757,36 9362.92

34631.70 4615.55

26125.66 4447.40

Total loans for the year 2004

160000 140000 120000 100000 Amount 80000 60000 40000 20000 0 Banks

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

For the year 2005:

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Loans Issued 202374.46 26729.21 60421.40 18546.36 25566.30 88991.75 15602.92

Recovered 120210.43 15422.75 35044.42 10478.70 14291.56 52327.15 8550.40

Outstanding 82164.03 11306.46 25376.96 8067.67 11274.74 36664.60 7052.52

Total loans for the year 2005

250000 200000 150000 Amount 100000 50000 0 Banks

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

For the year 2006:

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Loans Issued 261641.54 36466.24 79425.69 23962.43 35061.26 143029.89 22314.24

Recovered 163264.32 21879.74 48446.67 13898.21 20125.61 88392.47 12429.03

Outstanding 98377.22 14386.50 30976.02 10064.22 14936.10 54637.46 9885.20

total loans for the year 2006

Name Of The Banks 300000 250000 200000 amount 150000 100000 50000 0 Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

For the year 2007:

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

Loans Issued 337336.49 51670.44 98505.69 29949.65 46944.78 164484.38 36876.48

Recovered 263264.32 31879.74 68449.67 15898.21 30125.16 98392.47 22429.03

Outstanding 74072.17 19790.7 30056.02 14051.44 16819.62 66091.91 14447.45

Total loans for the year 2007

350000 300000 250000 Amount 200000 150000 100000 50000 0 Banks

Name Of The Banks State Bank Of India Syndicate Bank Canara Bank Corporation Bank HDFC Bank ICICI Bank UTI Bank

PRIORITY SECTOR ADVANCES OF BANKS COMPARISON WITH OTHER PUBLIC SETOR BANKS
Direct Agriculture Advances Amount 23484 4406.33 8348 963.58 Indirect Agriculture Advances Amount 7032 1464.64 3684 971.22 Total Agriculture Advances Amount 30516 5870.94 12032 1934.80 Weaker Section Advances Amount 19883 3267.71 4423 665.32 Total Priority Sector Advances Amount 82895 14626.62 30937 9043.74

S.No

Name of the Bank

1 2 3 4

STATE BANK OF INDIA SYNDICATE BANK CANARA BANK CORPORATION BANK

Priority sector Advance

90000 80000 70000 60000 50000 40000 30000 20000 10000 0 1 2 3 Banks 4 5 Total Priority sector Advance sl.no Name of the Bank Direct Agri advance Indirect Agri Advance Total Agri Advance Weakar section Advance

PRIORITY SECTOR ADVANCES OF PUBLIC SECTOR BANKS IN PERCENTAGES ARE AS FOLLOWS:

Direct Agriculture Advances % Net Banks Credit 1 2 3 4 STATE BANK OF INDIA SYNDICATE BANK CANARA BANK CORPORATION BANK 10.5 13.5 11.2 4.5 Indirect Total Weaker Agriculture Agriculture Section Advances Advances Advances % Net Banks Credit 3.1 4.5 4.9 4.5 % Net Banks Credit 13.6 18.0 15.7 9.0 % Net Banks Credit 8.9 10.0 5.9 3.1 Total Priority Sector Advances % Net Banks Credit 37.0 44.9 41.4 41.9

S.No

Name of the Bank

Amount

Priority sector of Bank

50 45 40 35 30 25 20 15 10 5 0 1 2 3 Banks 4 5 Name of the Bank Direct Agri advance Indirect Agri Advance Total Agri Advance Weakar section Advance Total Priority sector Advance

Interpretations:
y SBIs direct agriculture advances as compared to other banks is 10.5% of the Net Banks Credit, which shows that Bank has not lent enough credit to direct agriculture sector. In case of indirect agriculture advances, SBI is granting 3.1% of Net Banks Credit, which is less as compared to Canara Bank, Syndicate Bank and Corporation Bank. SBI has to entertain indirect sectors of agriculture so that it can have more number of borrowers for the Bank.

SBI has advanced 13.6% of Net Banks Credit to total agriculture and 8.9% to weaker section and 37% to priority sector, which is less as compared with other Bank.

Amount

Banking sectors in india

PUBLIC SECTOR BANKS-The public sector is the one whose working is in the hands of

the government. the government holds a majority stake in public sector industries. Their activities are mostly influenced by the government. But due to privatization of public sector industries, their nimbler has reduced to a significant extent. Indian railways, nuclear power industry, electricity board, etc.are still in cluded in the public sector. it may be defined as "an enterprise where there is no private ownership but its activities are not mainly confined to the maximization of profits and private interests of the enterprise but it is influenced by social.
PRIVATE BANKS- are banks that are not incorporated. A private bank is owned by

either an individual or a general partner(s) with limited partner(s). In any such case, the creditors can look to both the "entirety of the bank's assets" as well as the entirety of the sole-proprietor's/general-partners' assets.
FOREIGN SECTOR BANKS- Foreign sector banks are those banks which have their

head office in other countries outside India and branch is working in India.
CO-OPERATIVE SECTOR

The co-operative sector is very much useful for rural people. The co-operative banking sector is divided into the following categories. a. State co-operative Banks b. Central co-operative banks c. Primary Agriculture Credit Societies

RRBs
A rural bank is a financial institution that helps rationalize the developing regions or developing country to finance their needs specially the projects regarding agricultural progress.

Structure of Banking in India

Reserve Bank of India
Scheduled Non-Scheduled

Banks

Banks

Scheduled Commercial Banks

Scheduled Cooperative Banks

Public sector banks

Private Sector Banks

Foreign Banks

Regional Rural Banks

Scheduled Urban Cooperative Banks

Scheduled State Cooperative Banks

Nationalized Banks

SBI & its Associates

Old Private Sector Banks

New Private Sector Banks

Source-Banking &Finance Magazine

Indian banking system, over the years has gone through various phases after establishment of Reserve Bank of India in 1935 during the British rule, to function as Central Bank of the country. Earlier to creation of RBI, the central bank functions were being looked after by the Imperial Bank of India. With the 5year plan having acquired an important place after the independence, the Govt. felt that the private banks may not extend the kind of cooperation in providing credit support, the economy may need. In 1954 the All India Rural Credit Survey Committee submitted its report recommending creation of a strong, integrated, State-sponsored, State-partnered commercial banking institution with an effective machinery of branches spread all over the country. The recommendations of this committee led to establishment of first Public Sector Bank in the name of State Bank of India on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial Bank of India. Similarly during 1956-59, as a result of re-organisation of princely States, the associate banks came in to fold of public sector banking. Another evaluation of the banking in India was undertaken during 1966 as the private banks were still not extending the required support in the form of credit disbursal, more particularly to the unorganised sector. Each leading industrial house in the country at that time was closely associated with the promotion and control of one or more banking companies. The bulk of the deposits collected, were being deployed in organised sectors of industry and trade, while the farmers, small entrepreneurs, transporters , professionals and self-employed had to depend on money lenders who used to exploit them by charging higher interest rates. In February 1966, a Scheme of Social Control was set-up whose main function was to periodically assess the demand for bank credit from various sectors of the economy to determine the priorities for grant of loans and advances so as to ensure optimum and efficient utilisation of resources. The scheme however, did not provide any remedy. Though a no. of branches were opened in rural area but the lending activities of the private banks were not oriented towards meeting the credit requirements of the priority/weaker sectors.

On July 19, 1969, the Govt. promulgated Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger commercial bank with paid up capital of Rs.28.50 cr, deposits of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting for 80% of advances. Subsequently in 1980, 6 more banks were nationalised which brought 91% of the deposits and 84% of the advances in Public Sector Banking. During December 1969, RBI introduced the Lead Bank Scheme on the recommendations of FK Nariman Committee. In the post-nationalisation period, there was substantial increase in the no. of branches opened in rural/semi-urban centres bringing down the population per bank branch to 12000 appx. During 1976, RRBs were established (on the recommendations of M. Narasimham Committee report) under the sponsorship and support of public sector banks

as the 3rd component of multi-agency credit system for agriculture and rural development. While the 1970s and 1980s saw the high growth rate of branch banking net-work, the consolidation phase started in late 80s and more particularly during early 90s, with the submission of report by the Narasimham Committee on Reforms in Financial Services Sector during 1991. In these five decades since independence, banking in India has evolved through four distinct phases: Foundation phase can be considered to cover 1950s and 1960s till the nationalisation of banks in 1969. The focus during this period was to lay the foundation for a sound banking system in the country. As a result the phase witnessed the development of necessary legislative framework for facilitating re-organisation and consolidation of the banking system, for meeting the requirement of Indian economy. A major development was transformation of Imperial Bank of India into State Bank of India in 1955 and nationalisation of 14 major private banks during 1969. Expansion phase had begun in mid-60s but gained momentum after nationalisation of banks and continued till 1984. A determined effort was made to make banking facilities available to the masses. Branch network of the banks was widened at a very fast pace covering the rural and semi-urban population, which had no access to banking hitherto. Most importantly, credit flows were guided towards the priority sectors. However this weakened the lines of supervision and affected the quality of assets of banks and pressurized their profitability and brought competitive efficiency of the system. Consolidation phase: The phase started in 1985 when a series of policy initiatives were taken by RBI which saw marked slowdown in the branch expansion. Attention was paid to improving house-keeping, customer service, credit management, staff productivity and profitability of banks. Measures were also taken to reduce the structural constraints that obstructed the growth of money market. Reforms phase The macro-economic crisis faced by the country in 1991 paved the way for extensive financial sector reforms which brought deregulation of interest rates, more competition, technological changes, prudential guidelines on asset classification and income recognition, capital adequacy, autonomy packages etc.

BANK NATIONALISATION & PUBLIC SECTOR BANKING

Organized banking in India is more than two centuries old. Till 1935 all the banks were

in private sector and were set up by individuals and/or industrial houses which collected deposits from individuals and used them for their own purposes. In the absence of any regulatory framework, these private owners of banks were at liberty to use the funds in any manner, they deemed appropriate and resultantly, the bank failures were frequent. Statistics bear testimony to the fact that the genesis of the economic crisis in India, which surfaced in 1991, lies in the large and persistent macroeconomic imbalances that developed over the 1980s. Move towards State ownership of banks started with the nationalisation of RBI and passing of Banking Companies Act 1949. On the recommendations of All India Rural Credit Survey Committee, SBI Act was enacted in 1955 and Imperial Bank of India was transferred to SBI. keeping in view the objectives of nationalisation, PSBs undertook expansion of reach and services. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000 out of which 58% in rural areas) and no. of people served per branch office came down from 65000 in 1969 to 10000. Much of this expansion has taken place in rural and semi-urban areas. The expansion is significant in terms of geographical distribution. States neglected by private banks before 1969 have a vast network of public sector banks. The PSBs including RRBs, account for 93% of bank offices and 87% of banking system deposits. The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. The following steps are taken by the government of India to regulate banking institutions in the country. y 1949 : Enactment of Banking Regulation Act.

y 1955 : Nationalisation of State Bank of India. y 1959 : Nationalisation of SBI subsidiaries. y 1961 : Insurance cover extended to deposits. y 1969 : Nationalisation of 14 major banks. y 1971 : Creation of credit guarantee corporation. y 1975 : Creation of regional rural banks. y 1980 : Nationalisation of seven banks with deposits over 200 crore. After the nationalisation of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a hugejump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith immense confidence about the sustainability of these institutions.

and

Nationalised Banks in India

Banking System in India is dominated by nationalised banks. The nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalisation was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalised in 1969. Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalised in 1955 under the SBI Act of 1955. The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over 200 crores. Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955. Then on 19th July 1960, its seven subsidiaries were also nationalised with deposits over 200 crores.

However, the major nationalisation of banks happened in 1969 by the then-Prime Minister Indira Gandhi. The major objective behind nationalisation was to spread banking infrastructure in rural areas and make cheap finance available to Indian farmers. In the year 1980, the second phase of nationalisation of Indian banks took place, in which

7 more banks were nationalised with deposits over 200 crores. With this, the Government of India held a control over 91% of the banking industry in India. After the nationalisation of banks there was a huge jump in the deposits and advances with the banks. At present, the State Bank of India is the largest commercial bank of India and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches. After the 1991 economic crisis, the central government launched economic liberalization. India has progressed towards a modern market-based system and has a growing middle class.

SIGNIFICANCE OF BANKS
The importance of a bank to modern economy, so as to enable them to develop, can be stated as follow: (i) The banks collect the savings of those people who can save and allocate them to those who need it. These savings would have remained idle due to ignorance of the people and due to the fact that they were in scattered and oddly small quantities. But banks collect them and divide them in the portions as required by the different investors. (ii) Banks preserve the financial resources of the country and it is expected of them that they allocate them appropriately in the suitable and desirable manner. (iii) They make available the means for sending funds from one place to another and do this in cheap, safe and convenient manner. (iv) Banks arrange for payments by changes, order or bearer, crossed and uncrossed, which is the easiest and most convenient, besides they also care for making such payments as safe as possible. (v) Banks also help their customers, in the task of preserving their precious possess-ions intact and safe. (vi) To advance money, the basis of modern industry and economy and essential for financing the developmental process, is governed by banks. (Vii) It makes the monetary system elastic. Such elasticity is greatly desired in the present economy, where the phase of economy goes on changing and with such changes, demand for money is required. It is quite proper and convenient for the government and R.B.I. to change its currency and credit policy frequently, this is done by RBI, by

changing the supply of money with the changing the supply of money with the changing needs of the public. Although traditionally, the main business of banks is acceptance of deposits and lending, the banks have now spread their wings far and wide into many allied and even unrelated activities. The following are the Scheduled Banks in India (Public Sector):
y y y y y y y y y y y y y y y y y y y y y y y

State Bank of India State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India Vijaya Bank

The following are the Scheduled Banks in India (Private Sector):

y y y y y

ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd ICICI Bank Ltd HDFC Bank Ltd

IDBI Bank Ltd

The financial sector assessment report, prepared by the Reserve Bank of India (RBI) and the Central Government, has favoured the merger of public sector banks (PSBs) having a government holding bordering on 51 per cent with those having a much higher stateholding to ensure that their business growth does not suffer due to capital constraints. The report indicated that PSBs would need additional capital to meet Basel II norms and maintain an asset growth for the overall projected growth of the economy at 8 per cent and consequent growth of risk-weighted assets (RWAs). This has the potential to further aggravate a growing apprehension that public sector banks growth could be constrained in relation to other players. The extent of additional capital required from the government is expected to be manageable, provided the RWAs grow by within 25 per cent annually and total cost of recapitalisation would be lower than in most other countries.

Public banks deposit growth rise, private, foreign banks see drop

The public sector banks have shown growth in their credits in comparison to their private and foreign competitors. According to latest data released by the Reserve Bank of India (RBI) in due course the depositors have withdrawn funds from private and foreign banks

and are investing their money with public sector banks which has resulted in a significant decline in growth of deposits with private and foreign banks. In recent months big companies such as Infosys moved their deposits from private and foreign banks to public sector banks, largely because the state-owned players were offering higher interest rates. While in December, the public sector players had taken decision to reduce bulk deposit and focus more on current account and saving account balances.

Public sector banks score over private ones

Public sector banks have long been chastised as the black sheep of the financial sector. But while a lot of experts might deride these institutions for their non-performing assets and lower productivity, at the end of the day, public sector banks have far happier customers compared to their counterparts in the private sector. According to Reserve Bank of Indias (RBI's) latest report, Trend and Progress of Banking in India, public sector banks rule the roost in customer satisfaction. The report should make those singing hosannas for private sector banks sit up. It shows that the State Bank of India (SBI) recorded 0.1 complaints per branch while the corresponding figure for icici was 1.39more than 10 times that of sbi. Citibank fared far worse: it recorded a whopping 8.59 complaints per branch. These complaints were made to RBI grievance cell. One, however, needs to look at another aspect before delivering the final verdict: profits per branch. Here, private banks fare better. For example, on an average, a Citibank branch earns a net profit of Rs 18 crore annually. An average icici bank branch earns Rs 4.5 crore, while an average sbi branch earns just Rs 50 lakh, annually. The standard response to such figures is that private sector banks are more efficient than their public sector counterparts with foreign banks taking efficiency to astronomical levels. But their rich rake-offs notwithstanding, the profit-complaint ratio of private sector banks is much lower than their much maligned public sector counterparts sbis profit-complaint ratio of 4.1 for example is much higher than cici and Citibank

Public sector banks score over private ones

According to the rbi report, private and foreign banks actually score pretty high on customer complaints of the nasty variety: namely, harassment in recovery of loans. Foreign banks record 0.134 such complaints per branchmore than 30 times the overall average. The corresponding numbers for new private Indian banks is 0.021 and 0.003 for public sector banks. The Consumer Voice survey also has private sector banks faring poorly in this respect. Only one public sector bank figures amongst the top five in the list of banks with highest number of disgruntled customers. Not surprisingly, Citibank tops the list. Citibank also tops another dubious list: that of people fed up with tele-marketing executives pestering them. The bank accounts for 40 per cent of all such complaints.

CHALLENGES FOR PUBLIC SECTOR BANKS IN INDIA

1. Implementation of Basel II 2. Implementation of latest technology 3. How to reduce NPA 4. Corporate governance 5. Man power planning 6. Talent management 7. Loan waiver: A new challenge 8. Risk management 9. Transparency and disclosures 10. Challenges in banking security 11. Competition with private sector banks 12. Growth in business 13. Enhancing customer service