Satate Bank of India better known as (SBI) is the largest banking and financial service provider in India by it’s assets ,market capitalization and revenue. SBI with it’s 200 year of legacy, assets worth US$360 Billion,14120 branches within India and 173 foregin offices gives it a leverage over other competive banks. SBI is a regional banking behemoth and is one of the largest financial institutions in the world.
SBI has five associate banks; all use the same logo of a blue circle and all the associates use the "State Bank of" name, followed by the regional headquarters' name (e.g. State bank of Bikaner and Jaipur).These Regional banks with the backing of SBI has achieved its goal of offering its full range of products and services to all its branches and customers, spreading economic growth to rural areas and providing financial inclusion for all of India's citizens.
It is the second-largest bank in the world in number of branches which allows SBI to perform its dual role of earning a profit and expanding banking services to the population throughout India. India's Finance Minister P. Chidambaram recently commented "The State Bank of India is owned by the people of India."With the liberalization in the mid-1990s, SBI faced stiff competition from the private sector and foreign banks which resulted into a major restructuring exercise of SBI.
This major reengineering involved redesigning of branches, technology up gradation and focus on lean structure.marketig services of sbi SBI with its vast network channelizes subsidized agricultural loan to farmers as majority of Indian population still are depended on agriculture. SBI has a very aggressive marketing through print and television media. SBI has unbeatable features of Fixed Deposit, SME, tailored in accordance with the need and better rate of interest. Recent Survey indicates the majority of Indians prefer Public banks for loans as private sector banks offers are difficult-to-comprehend and “Clever” .This is where SBI uses its trusted name and simplicity to boost its lending rate.
When challenged by private sector in Card market, SBI collaborated with GE to exploit the ever growing card market. SBI’s collaboration with universities, colleges helps SBI and students both as students can avail education loan faster.Student can also open student’s account at minimum deposit of US$10. Due to its vast presence across India, all public sector companies prefer SBI for their employees Salary Account.
SBI has devised a unique marketing strategy, encouraging sex workers to open savings bank account at its branches located in red light areas. The bank has roped in NGOs as the communication media. To insure the quality for its services and grab the opportunity in insurance sector SBI joined hands with global major Cardiff. As Cardiff has experience of working with banks. SBI is using NGOs to fund and give more Micro credits to small scale business at a minimal interest rate.
SBI is using Cross Sales of other products with its regular existing 220 million bank account user. For a country where the love for gold is almost a religion, the State Bank of India, which is the largest lender in the country, has decided to discount the purchase of gold coins for every salary holder.To facilitate service delivery of international standards SBI teamed up with McKinsey ; Company as consultants in 2003 and it’s again in talks with undisclosed global major as consultants for better marketing strategy. Financial services are generally intangible, but the service providers go to considerable lengths to ‘tangibilise’ the service for customers.Before the liberalization of the Indian banking industry in the mid-1990s, SBI never faced the issue of intangibility as there were very few financial service providers and customers had limited option of availing services from. Soon after liberalization, customers were no longer hostage to a single bank as in the past which resulted in SBI’s significant loss of its market share.
To regain the lost market share at retail level of banking SBI took a daunting task of restructuring itself which includes 25000 branches all over India. India as a country has always preferred public sector banking over private as they tend to be more reliable and are protected and backed by government. After restructuring, SBI launched several innovative, value-added products and services to project a customer friendly image.State bank of India serves as brand name when it comes to reliability of costumers. With 60% Government holding of bank, Customers feel safe with their money.
With services like internet banking, mobile banking, state bank mobile cash and wide array of cards tailor-made to suit the customer groups, SBI is trying to simplify banking for its customers. Now executives at bank are not waiting for customers rather they are going door to door for better client interaction and customer satisfaction.SBI makes it presence felt across India with 99,000 offices and 46000 ATMs; this provides both rural and urban India to avail banking and its benefits. Access to Utility bill payments, Ticket Booking for travel by Road, Rail and Air, insurance payments, Mutual funds Investments, SBI and other Credit Card dues payments, Tax Payment, Customs Duty Payment, Share Trading and Fee Payment to educational institutions makes SBI household name.According to survey, 80% businessmen in India prefer state-owned banks for securing personal, business and educational loans. This is mainly due to general perception that they are more reliable, secure and trustworthy.
This makes SBI a reputable figure among its customers. SBI uses its simplicity and user friendly documentation to protect is market share.Being the largest lender in banking industry, SBI is constantly challenged by the ever growing demand on micro credit, agricultural loan, educational loan, and all sorts of other loans. To crater all demands SBI uses its 100% capacity and goes beyond to provide required financial support. To manage the demand, SBI uses surplus funds provided by government (Reserve Bank of India).
Training of SBI staff is always been an important aspect, as a knowledgeable staff means more empowered organization. Training imparts various skills to the workers to deal and adapt to new situation.The State Bank Staff College set up in 1961 has emerged as a premier training institute for the banking industry. The college trains more than 6,000 officers every year, mostly middle- and senior-level executives, in credit management, international banking, leadership development, marketing skills, negotiation skills and communication skills etc.
Regular exchange of Staffs to overseas branches helps staff understand the world-class norms of banking and helps in better performance.SBI sends its staff door to door to better understanding of costumer’s need. These staffs are always used to promoted new schemes and do frequent surveys to enhance the quality of services and adjust the policies of bank in accordance with the need.As a prime public sector financial provider SBI’s role is vital, to remain as one of the best financial provider SBI needs to restructure its existing hierarchical management.
Having US$360 billion worth of assets is boon but not being able to utilize it to its fullest potential is weakness of the bank which may in long term hinder the growth of the bank. Finally the weakest link of all is modernization; SBI lags with respect to private players in terms of modernization of its processes, infrastructure, centralization, etc. Overall this bank has promising future if it manages to set out medium and long term goals and incorporate all its weakness .
