STATE BANK OF INDIA CASE STUDY

1. BUSINESS PROCESS
RE-ENGINEERING
CASE -STUDY
STATE BANK OF INDIA
5/12/2018
1 MAYANK AGRAWAL

2. 5/12/2018
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Questions To Be Answered By Group 3
• What Changes took place in Central Banking System
• Redulent Process in SBI .
• Competitive Visible Process

3. 0
500,000
1,000,000
1,500,000
2,000,000
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
ADVANCES
SBI ICICI HDFC
5/12/2018
3
Valueresearchonline.com

4. 0
2
4
6
8
10
12
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
YIELD ON ADVANCES
SBI ICICI HDFC
5/12/2018
4
Valueresearchonline.com

5. 0
20
40
60
80
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
EARNING PER SHARE
SBI ICICI HDFC
5/12/2018
5
Valueresearchonline.com

6. COMPARE WITH HDFC & ICICI
HDFC ICICI SBI
Branches 4715 4850 24000
ATM 12259 14404 59000
Employees 84325 84096 278000
Customer 33% 32% 35%
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Individual Bank Official Website

7. Core problems of SBI
1) Planning and organization:- No proper planning and lack of organized actions.
2) Coordinating:- No coordination among the members of the SBI
3) Lack of communication:- the top level management views and vision were not
clear to the employees.
4) Directing and supervision:- no proper way-out of actions and supervision, also
lack of proper instructions.
5) Productivity:- Lack of productivity and quality of work, speed of working was
slow.
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Economics Time

8. 5/12/2018
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1. Growth and human resource development:- No proper training was given to employees
and the growth chances were less for the low level employees.
2. Job satisfaction :- the employees were not satisfied with their job as they were bugged up by
doing same thing for years and years. They did not shuffle the jobs also.
3. Technology:- the employees were not given proper training about the new technology and
technology up gradation was very slow .
4. Customers satisfaction:- the employees did not contribute to the problems of the customers, no
proper follow up and feedback
Economics Times

9. Merger Problems and Reconstruction of SBI
 Branches overlap
SBI today runs the largest bank in the country in terms of assets as well as branch network. There is going to be a
huge overlap of branches in the five states of Rajasthan, Bengaluru, Andhra Pradesh, Punjab and Kerala
 A bad bank within a bank
This huge portfolio of bad loan makes it a bad bank within a bank. The five associate banks for instance have
stressed loans (gross NPAs and restructured loans) at a staggering Rs 35,396 crore level. This amount is almost
half of SBI's Rs 66,117 crore stressed loans in 2015-16. It would be a huge task to resolve the bad loans given the
challenging operating environment.
 Bad loans of the past which together with restructured loans are at 10% of total loans, making the industry
technically insolvent.
 SBI’s gross bad loans and restructured loans are at Rs 83,434 crore, or 8.4% of total loans, equivalent to the
government’s spend on social issues like healthcare and education this year.
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10.  Too big to handle:-
 The merger is the biggest in the Indian banking industry.
 The bank is merging five associate banks with combined assets of over Rs 6 lakh crore.
 The merged SBI entity would have 24,000 plus branches, 58,000 ATMs and 2.7 lakh
employees. ICICI Bank has 4,450 branches, 14,295 and 97,132 employees. The digital
wallets, too, will make ATMs irrelevant in the future.
 Associates are mirror image of parent:-
SBI associate banks are a mirror image of the parent. SBI chairman also sits on their board
and MD and CEOs came from other associate banks. The product basket has many
similarities with focus on infrastructure, agriculture, home and auto loans.
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11. BPR PROJECT IMPLEMENTATION
Inward Remittance Cell
Document Archival system
Inter Office Instrument
In Branch Cash Handling
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12. Improvements done by SBI
 Every year, till financial 2015-16, started 1,000 branches across the country
 So far started 700 branches and 300 branches would be opened before March
2014.
 Krishna Kumar said 35-40 per cent staff would retire, or take retirement in the
next five years, and vacancies would be filled.
 50 per cent of the new recruits of the bank were women, and the bank was
preparing to start more all women branches in the country.
 There were 180 branches/outlets abroad, and they accounted for 15 to 20 per cent
of the bank's business
 On the sidelines of a meeting organized to disburse benefits under the corporate
social responsibility initiative of the bank in Madurai, Tiruchirappalli and
Coimbatore zone.
 65 per cent of the 37,000 ATMs of the bank were onsite machines. 5/12/2018
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13. Changes in Retail Banking
Major push on retail asset specially housing loans
leading to portfolio growth of 22%
Reverse mortgage and SBI home loan schemes
launched
Over 1200 financial advisors in place for Wealth
Management and cross selling mutual funds and
insurance products
Invest product for investment under IPO launched
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14. Changes in Rural Banking
Largest agriculture salesforce in the country with over
3000 people and 3000 more being recruited addition to
staff in branches
Created third party channel to reach more than 30000
customers service point outlets
126 rural credit processing center under BPR established
to speedup rural financing
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15. Changes in Wholesale Banking
 Focus on fee income generation by providing value added
services
 New trust on wholesale banking and top corporate to
customize product state of the art e-platform in specialist
work force
 Leadership program undertaken for implementation of
wholesale banking strategy
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16. REDULENT PROCESS THAT TOOK PLACE
 Affects the seniority of top officials of Associate Banks
 It will result in redeployment or loss of jobs of some workmen and closure
of branches and finally
 the banks might lose some of their regular customers,”
 Big banks also mean bigger risks. It will not open branches in rural or
unbanked areas.
 Lots of rich people will become its customers, while small customers, who
were loyal to some of these associate banks, will move to other banks
post-merger.
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17. Improvements to be made by SBI
 Improve employee productivity
 Improve customer service
 Improve trust and confidence of the public in banking institutions.
 Improve NPA management:
 Improve the norms of priority sector lending
 Improve corporate governance:
 Placing inspection rating of banks by RBI in public domain:
 Making bank auditors more accountable for their failures.
 Avoiding dual control of public sector banks:
 Eliminating political interference in functioning of banks totally.5/12/2018
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