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Comprehensive report on State bank of India

General Overview
State Bank of India was constituted on 1st July 1955 under the State Bank of India
Act 1955, by undertaking the business of Imperial Bank of India. In present it is the
largest commercial bank in India, having it’s headquarter in Mumbai. Present
market share of SBI is around 23% in assets and one-fourth of the total loan and
deposits market. It has 16 regional hubs and 57 zonal offices located at important
cities throughout India. It has 24,000 branches in India and 195 overseas offices
spread over 36 countries as per April 2017 report. It provides a wide range of
services to individuals, commercial enterprises and large corporates through its
various branches and outlets. It has also one of the largest employer in the
country with 209,567 employees as on 31 March 2017, out of which there were
23% female employees. In the last quarter it has reported a total net profit of
3955 crore rupees with total interest income as 62,277 crore rupees. Earning per
share has been reported as 17.58 Rs.

Management of the Company

State Bank of India is a statutory body that is regulated, managed and controlled
by the SBI Act 1955. Management of SBI vests in central Board of Directors which
consists of:
 A Chairman and a Vice-Chairman appointed by the Central Government in
consultation with the Reserve Bank of India.
 Two Managing Directors appointed by the Central Board of Directors with
the approval of the Central Government.
 Six directors to be elected in the prescribed manner by the shareholders
other than the Reserve Bank.


 Eight directors to be nominated by the Central Government in consultation

with the Reserve Bank of India to represent territorial and economic
interests in such a manner that not less than two of them have special
knowledge of the working of the cooperative institutions and of rural
economy and the others have experience in commerce, industry, banking
and finance.
 One director to be nominated by the Central Government.
 One director to be nominated by the Reserve Bank.
 Two directors to be appointed to represent the officers and the staff of the
These directors are appointed for such term not exceeding 5 years. They are also
eligible for re-appointment.
Except Board of directors, SBI appoints seven scales of managers for managing the
offices at four level, that are- Deputy level, Branch level, Regional Level and Zonal
These directors and managers are responsible for maintaining organisational
control at three level of management that is- Top management, Circle
management and Zonal management. Top management is headed by Chairman
and Managing director, Circle level is headed by Chief-general manager and
General manager, and Zonal management is headed by Deputy-general
management and Assistant management.

SWOT Analysis of SBI

1. Strength:
a) Strong Management: Its management is purely controlled by the
director and managers nominated by the central government and RBI.
They need to perform their roles and responsibilities under certain
guidelines provided under SBI Act 1955. Thus this makes its management
system strongest than other commercial banks.


b) Economies of Scale: SBI is the largest commercial bank in India in terms

of market share and revenue. Its operation is spread not only in India but
across 36 countries of the world. Thus it gets all economies of scale by
performing its operation on a large scale.
c) Customer Loyalty: When given a choice, Customer are more loyal to
SBI than any other bank. Hence it needs to focus only on new customers
instead of targeting all the customers.
d) Special Privileges: SBI is a statutory body registered under the SBI Act
1955. Hence it gets special privileges from government as well as RBI.
e) Goodwill: SBI is the oldest bank in the country. It is also one of the
oldest bank in the country which has good relations with its shareholders.
Thus it has created a strong goodwill among customers.

2. Weaknesses:-
a) Slow growth of market share: With the LPG policy there has been an
immense competition in the Indian market, which has slowed down the
growth rate of SBI. Even there has been a drop in the market share during
2008 to 2017.
b) NPA issues: There has been issues in loan repayment, bad loans, Non-
Performing Assets and loan restructuring specially in the case of associate
c) Huge Size: SBI is the largest commercial bank in India with largest
number of employees. This huge size brings economies of scale but it also
becomes its weakness when taking strategic decision.
d) Political intervention: Being the statutory body, it has more
government intervention than any other commercial bank in the country.

3. Opportunities:-
a) International Expansion: SBI has 195 overseas offices across 36
countries, but it has more opportunities to locate more offices especially
in Asian continent.

b) Expansion to Rural Areas: Being the strongest brand and customer

loyalty it has more opportunity to expand in rural areas.
c) New products and services: In comparison to its competitors, SBI
has more opportunity in successfully launching new products and
services like YONO.
d) Micro Finance: There is a lot of growth opportunities for SBI in the area
of micro finance.

4. Threats:-
a) Non-Performing Assets: Non-performing assets in India are estimated
at 10.2% by March 2018, from 9.6% in March 2017 in comparison to the
statistics last year September 2016, gross NPAs were at 9.2%. Hence this is
the biggest threat for SBI.
b) Cyber Threat: Cyber security is also an issue for SBI in the present
scenario. Information threat and security is the biggest threat for SBI.
c) FDI in banking sector: FDI allowed in banking sector can be a major
threat for SBI as people tend to switch to foreign banks for better facilities
and technologies in banking.

Competitive Analysis
After the LPG policy SBI faces the intense competition from its competitors. In
present scenario major competitors for SBI are-
a) HDFC Bank
b) ICICI Bank
Comparative Analysis of SBI and ICICI Bank
1. On the basis of Branch Service: SBI has very limited space for number of
customers who transact daily. Most of the time only two counter manage
this which is highly inadequate. Token system is also there, but it is only
limited to deposit and withdrawals & most of the time unorganised.


On the contrary, ICICI has much larger space

and more counters to carter to the needs of the customer. Most of the time
staff take up multi-tasking during times when there are more customers to
carter to. Token system is also very much organised and multipurpose.
2. ATM Services: SBI ATMs offer more services than ICICI ATMs, But SBI offers
all the services only in few ATMs. Rest of the ATMs provide basic services.
On the contrary, ICICI bank offers all the services in all the ATMs.

3. Website user interface: SBI does not provide user friendly interface. It does
not showcase any advertisement about its services.
On the contrary, ICICI’s website is more user friendly. It advertises its
services giving potential customers vast details of their banking services.
4. Performance Comparison: Credit deposit ratio has been higher than in SBI
during the last 10 years.
SBI has higher Operating expense to fund ratio than ICICI bank during the
last 10 years.
There has been a drastic change in return to equity ratio in both the bank.
Now ICICI is leading in return to equity ratio in comparison to SBI bank.


1. On the basis of Branch service: SBI and HDFC bank have same area of space
for number of customers who transact daily. However, SBI has large no of
visitors than HDFC, which make the space inadequate for the visitors.
2. ATM Services: ATM services is quite cheaper at SBI’s ATMs than HDFC’s
3. Customer satisfaction: Service wise HDFC gives more customer satisfaction
than SBI bank.
4. Website user interface: HDFC has more user friendly interface than SBI’s
5. Performance Comparison: Profit before interest to fund employed I higher in
HDFC bank than SBI bank.
Return on shareholders’ equity is also in favour of HDFC bank than SBI.

Profit after tax to equity shareholder and profit after tax to net worth is
positive in SBI. Current ratio is also strong to SBI, which shows faith in
creditors and short term lenders.
Overall, profitability ratio is more profitable in SBI in comparison to HDFC

Based on the overall evaluation it has been found that, SBI is the leader in
commercial sector having good strength and opportunities in the market. It has
also good performance in comparison to its competitors.
However, it needs to improve itself in certain areas like more expansion, proper
marketing of its product and services and Innovation in product and services &
website user interface.
From the point of view of investment, it is worth investing company for long term
purpose as it has good profitability ratio and current ratio.