AN ORGANIZATIONAL STUDYON
STATE BANK OF HYDERABAD, RAICHUR
An Internship Report submitted to Bangalore University in partial fulfillment of the requirements for the award of the Degree of
Master of Business Administration
By
ROHIT H SAGAR
Reg.No:09KSCM068
Under the guidance of
External Guide Internal Guide MR.KANDUR SRINIVAS Prof KUPPUSAMY .A MANAGER FACULTY SBH, RAICHUR IASMS, BANGALORE
INDIAN ACADEMY SCHOOL OF MANAGEMENT STUDIES (IASMS)
Hennur Cross, Hennur Main Road, Kalyan Nagar, Bangalore -560 043
2010–11
INDIAN ACADEMY
SCHOOL OF MANAGEMENT STUDIES (IASMS)Hennur Cross, Hennur Main Road, Kalyan Nagar, Bangalore -560 043
C E R T I F I C A T E
This is to certify that Mr. ROHIT H SAGAR Studying III Semester, MBA. in Indian
Academy School of Management Studies (IASMS) has successfully undergone Internship
project at State Bank of Hyderabad, Raichur and has prepared a report entitled “AN
ORGANIZATIONAL STUDY ON STATE BANK OF HYDERABAD” under the
guidance of Prof KUPPUSAMY .A , Faculty Member, IASMS as a partial fulfillment of
the requirements of the Bangalore university of the award of Master Degree in Business
Administration for the academic year 2010-2011.
Signature of the Guide Signature of the Principal
Date:
Place:
1
D E C L A R A T I O N
I, hereby declare that the internship report entitled “AN ORGANIZATIONAL
STUDY ON STATE BANK OF HYDERABAD, RAICHUR” has been prepared by
me under the guidance of Prof KUPPUSAMY.A, Faculty Member, IASMS in
partial fulfillment of the requirements for the award of the Degree of Master of
Business Administration of Bangalore University, Bangalore.
I further declare that this internship report has not been submitted to any
university / institution for the award of any Degree/Diploma.
DatePlace Signature of the Student
2
Acknowledgment
I wish to thank the INDIAN ACADEMY SCHOOL OF MANAGEMENT
STUDIES and Bangalore University for giving me an opportunity to undergo this study.
I thank Prof KUPPUSAMY .A, Faculty Member, IASMS whose continued
support and available guidance was of immense help in the completion in the project. It
was because of his involvement and limitless patience that has enthused and motivated
enough to pursue this arduous task with utmost sincerity.
I heartily thank Mr. KANDUR SRINIVAS, Manager, State Bank of Hyderabad,
Raichur for his support and cooperation.
Lastly I thank my parents, friends and all those concerned who have encouraged me
all through to complete this project well on time.
ROHIT H SAGAR
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CONTENTS CONTENTS
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CHAPTER PARTICULARS PAGE NO
1Introduction
About the industry Objective of the Study
1-31-23
2.
Profile of the organization History Vision and Mission Organizational Structure Policies and procedure It’s product and service Growth
4-554-11121314-1617-5051-55
3.
Department studies Global Market Department Corporate banking group Mild Corporate Group National Banking groups Rural Business group Marketing and cross selling department Corporate strategies & new business International Banking group Information Technology Business Intelligence department Customer service Human Resource Department Official language department Banking operation department
56-605656575757575757-585858-5959596060
4. SWOT Analysis 61-62
5.
Summary Findings Conclusion Recommendation
63-64636364
LLISTIST OFOF TABLESTABLES
Table No Particulars Page No.2.12.1 Interest rate for education loan 27
2.22.2 Repayment Tenure for education loan 28
2.32.3 Security for education loan 28
2.42.4 Interest rate for loan against gold ornaments 30
2.52.5 Interest rate for FCNB 31
2.62.6 Reinvestment plan for FCNB 32
2.72.7 Interest rate for NRE 33
2.82.8 Interest rate for NRO 34
2.92.9 Reinvestment Plan for NRO 34-35
2.102.10 Interest rate for RFC 36
LISTLIST OFOF FIGURESFIGURES
Fig. No. Pariculars Page No.2.1 Organizational structure of SBH 132.2 Market share of SBI Life 48
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1.1 NTRODUCTION-
State Bank of Hyderabad had been constituted as Hyderabad State Bank on 8th August 1941 under Hyderabad State Bank Act, 1941. It served as the central bank of the erstwhile State of Hyderabad, covering present-day Telangana region of Andhra Pradesh, Hyderabad-Karnataka of Karnataka and Marathwada of Maharashtra. Their functions include managing the currency - Osmania Sikka and public debt, leaving aside the usual functions of commercial banking. Gunfoundry in Hyderabad saw the first branch of the bank on 5th April, 1942.it has 255 branches in india and 174 branches in Andhra Pradesh.
It was in the year 1953 that the Bank overtook the assets and liabilities of the Hyderabad Mercantile Bank Ltd. and started conducting Government and Treasury business as RBI's agent. Then right in 1956, the Bank was taken over by RBI as its first subsidiary and the name got rechristened from Hyderabad State Bank to State Bank of Hyderabad. More transition waited for the bank as the bank became a subsidiary of the State Bank of India one 1st October 1959 and presently it is the largest Associate Bank of State Bank of India.
All the branches of the State Bank of Hyderabad are completely intertwined under Core Banking Solutions - with a wide product and service range for its customers. Latest technologies like Internet Banking, ATMs - all customers are entitled to these facilities. With a pan India presence, the Bank operates through more than 1,000 branches.
State Bank of Hyderabad (SBH) is an associate bank of State Bank of India (SBI), and is one of the scheduled banks in India. The Bank's Head Office is situated at Gunfoundry Area, in Hyderabad, India. SBH has over 1031 branches and about 12,800 employees. Assets are in excess of Rupees 767 billion.
The bank has performed well in the past decades, winning several awards for its banking practices.
The bank originated as the central bank of the erstwhile Nizam state under the name, Hyderabad State Bank. It was established in 1942, during the reign of the last Nizam of Hyderabad, Mir Osman Ali Khan. The bank also managed the Osmanai sicca, the currency of Hyderabad state, which had the distinction of having its own currency during British rule.
In 1956, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja Pannalal Pitti had founded in 1935. (Other accounts give year of founding as 1946 and that of merger as 1952).
Hyderabad State Bank was renamed State Bank of Hyderabad in 1956, and its entire share capital was vested with the Reserve Bank of India. Later, after the Subsidiary Banks Act was passed in 1959, it and the other banks of the princely states became subsidiaries of SBI. SBH was the first subsidiary of State Bank of India.
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Financial performance of State Bank of Hyderabad (quarterly and annual basis)
Annual results Rs in thousands 31st March 2009 31st March 2008Net Profit for the year 615,80,90 556,98,88
Quarterly results Rs in crore 30th Sep 2009 30th Sep 2008Net Profit 234.36 184.84
State Bank of India is the nation's largest and oldest bank. Tracing its roots back some 200 years to the British East India Company (and initially established as the Bank of Calcutta in 1806), the bank operates more than 15,000 branches within India, where it also owns majority stakes in six associate banks. State Bank of India (SBI) has more than 80 offices in nearly 35 other countries, including multiple locations in the US, Canada, and Nigeria. The bank has other units devoted to capital markets, fund management, factoring and commercial services, credit cards, and brokerage services. The Reserve Bank of India owns about 60% of State Bank of India. The roots of the State bank of India rest in the first decade of 19th century, when the bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies, and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the reserve bank of India. The Presidency banks amalgamated on 27 January 1921, and the reorganized banking entity took as its name Imperial Bank of India. The Imperial Bank of India continued to remain a joint stock company.
Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of India, which is India’s central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955 the Imperial Bank of India became the State Bank of India. The Govt. of India recently acquired the Reserve Bank of India’s stake in SBI so as to remove any conflict of interest because the RBI is the country’s banking regulatory authority. In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. On Sept 13, 2008, state bank of Saurashtra, one of its Associate Banks, merged with State Bank of India.
SBI has acquired local banks in rescues. For instance, in 1985, it acquired Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, State Bank of Travancore, already had an extensive network in Kerala.
SBI provides a range of banking products through its vast network in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16000 branches, has the largest branch network in India. With an asset base of $250 billion and $195 billion in deposits, it is a regional banking behemoth. It has a market share among Indian commercial banks of about 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation’s loans
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SBI has tried to reduce its over-staffing through computerizing operations and Golden handshake schemes that led to a flight of its best and brightest managers. These managers took the retirement allowances and then went on the become senior managers at new private sector banks.
The State bank of India is 29th most reputable company in the world according to Forbes.
Associate banks
The Subsidiaries of SBI till date
* State Bank of Indore* State Bank of Bikaner & Jaipur* State Bank of Hyderabad* State Bank of Mysore* State Bank of Patiala* State Bank of Travancore
1955 - On 1st July State Bank Of India Was Constituted Under The State Bank Of India Act 1955, For The Purpose Of Taking Over The Undertaking And Business Of The Imperial Bank Of India. The Imperial Bank Of India Was Founded In 1921 Under The Imperial Bank Of India Act 1920. The Bank Transacts General Banking Business of Every Description Including, Foreign Exchange, Merchant Banking and Mutual Funds.
2009
State Bank of India yesterday slashed its benchmark lending rate by half a percentage point to 11.75 per cent. The Benchmark Prime Lending Rate (BPLR) was revised down by 50 basis points with effect from June 29, SBI informed the Bombay Stock Exchange. This move would benefit home, car and corporate loan customers - State Bank of India on June 30 launched two new home loan products called as SBI Easy Home Loan and SBI Advantage Home Loan, with zero processing fees for both waived off till September 30. While SBI Easy Home is for loans amount up to Rs 30-lakh while the SBI Advantage Home is for loans above Rs 30-lakh, a press release issued here said. - State Bank of India, entered into an agreement with the government of Gujarat to create a fund of Rs 5,000 crore for investing in equity of infrastructure projects. 2010 - State Bank of India, with a debit card base of over 70 million, Comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based Platinum Debit Card to its bouquet on March 26.
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1.2 OBJECTIVES
1) To know the organizational structure of SBH.
2) To have practical exposure to organizational function as compared to theoretical concepts.
3) To know the product and service offered by SBH at Raichur branch.
4) To know its growth strategy & potential.
5) To study the strength weakness opportunities and threats of the organization to carry out swot analysis.
2.1 HISTORY-
The bank originated as the central bank of the erstwhile Nizam state under the name, Hyderabad State Bank. It was established in 1942, during the reign of the last Nizam of Hyderabad, Mir Osman Ali Khan. The bank also managed the Osmania sicca, the currency of Hyderabad state, which had the distinction of having its own currency during British rule.
In 1956, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja Pannalal Pitti had founded in 1935. (Other accounts give year of founding as 1946 and that of merger as 1952).
Hyderabad State Bank was renamed State Bank of Hyderabad in 1956, and its entire share capital was vested with the Reserve Bank of India. Later, after the Subsidiary Banks Act was passed in 1959, it and the other banks of the princely states became subsidiaries of SBI. SBH was the first subsidiary of State Bank of India.
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State Bank of Hyderabad, H.O
The three banks were governed by royal charters, which were revised from time to time.
Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest
owned by the provincial government. The members of the board of directors, which managed the affairs
of each bank, were mostly proprietary directors representing the large European managing agency houses
in India. The rest were government nominees, invariably civil servants, one of whom was elected as the
president of the board.
Group Photograph of Central Board (1921)
Business :
The business of the banks was initially confined to discounting of bills of exchange or other negotiable
private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes.
Loans were restricted to Rs.1 lakh and the period of accommodation confined to three months only. The
security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate,
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jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per
cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and
silk goods were also granted but such finance by way of cash credits gained momentum only from the
third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be
financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed
by the borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against
shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.
Indians were the principal borrowers against deposit of Company's paper, while the business of discounts
on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their
partnership firms. But the main function of the three banks, as far as the government was concerned, was
to help the latter raise loans from time to time and also provide a degree of stability to the prices of
government securities.
Gunfoundry is located in a lane opposite to the Jamia Masjid Aliya, and can be approached by the side lane of Lepakshi Government Handicrafts Emporium. In fact, the whole locality is known as Gunfoundry, where the Head Office Building of State Bank of Hyderabad ( a landmark inaugurated by the President of India in 1955 ) and the Department of Archaeology & Museums are located on the main road in the same line.
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Gunfoundry is one of the several cannon and cannon-ball factories set up in 1786 by French General, Monsieur Raymond who was in the service of Nawab Mir Nizam Ali Khan, the 2nd Nizam of Hyderabad. Incidentally, this is the only structure of surviving foundry established in the 18th century in the whole of Hyderabad city.
In 19th century, Roman Catholic Cathedral on the main Secunderabad Road was also constructed in Gunfoundry locality. Even before 100 years the ruins of a number of other foundaries were seen on the road to Mir Alam Tank and on the Bangalore road. Malcolm, a renowned historian, in his well-known book History of India, referred to these foundaries in 1798 as places in which they cast excellent cannon and made serviceable muskets
As seen in a photograph published in Glimpses of Nizams Dominion in 1895, the height of the brick walls of Gunfoundry is approximately 50 feet with a tapered portion commencing above 25 feet height. It can be said that due to negligence and poor maintenance, the original height of the tapered walls have come down to 25 to 30 feet. The lower portion was plastered with lime. The shape of the bricks used in the construction of Gunfoundry is square with less thickness. The binding material used is lime mortar. The wall surfaces have been pointed with lime mortar on the exterior and interior sides of the foundary. We find here and there that the walls have been given joints of square iron rods. In the lower portions, brick arches are made in semi circular shape, where the furnaces, melting of iron casting of cannons, muskets etc. were carried out in most scientific manner under the supervision of General Monsieur Raymond.
A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras
occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the
presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole
power of issuing paper currency within British India. The task of management and circulation of the new
currency notes was conferred on the presidency banks and the Government undertook to transfer the
Treasury balances to the banks at places where the banks would open branches. None of the three banks
had till then any branches (except the sole attempt and that to a short-lived one by the Bank of Bengal at
Mirzapore in 1839) although the charters had given them such authority. But as soon as the three
presidency bands were assured of the free use of government Treasury balances at places where they
would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches,
agencies and sub agencies of the three presidency banks covered most of the major parts and many of the
inland trade centers in India. While the Bank of Bengal had eighteen branches including its head office,
seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.
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Bank of Madras Note Dated 1861 for Rs.10
Presidency Banks Act:
The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency
banks under a common statute with similar restrictions on business. The proprietary connection of the
Government was, however, terminated, though the banks continued to hold charge of the public debt
offices in the three presidency towns, and the custody of a part of the government balances. The Act also
stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the
specified minimum balances promised to the presidency banks at only their head offices were to be
lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter
could look upon them more as a favour than as a right.
Bank of Madras
The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal
control of the presidency banks and the connected decision not to guarantee minimum government
balances at new places where branches were to be opened effectively checked the growth of new
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branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the
case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly
derived from trade dispersed among a number of port towns and inland centers of the presidency.
India witnessed rapid commercialization in the last quarter of the nineteenth century as its railway
network expanded to cover all the major regions of the country. New irrigation networks in Madras,
Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of
which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the
eastern Terais, the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All
these resulted in the expansion of India's international trade more than six-fold. The three presidency
banks were both beneficiaries and promoters of this commercialization process as they became involved
in the financing of practically every trading, manufacturing and mining activity in the sub-continent.
While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing
industries, the Bank of Madras went into the financing of large modern manufacturing industries, the
Bank of Madras went into the financing of small-scale industries in a way which had no parallel
elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange.
Not only was such business considered risky for these banks, which held government deposits, it was also
feared that these banks enjoying government patronage would offer unfair competition to the exchange
banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank
of India in 1935.
Bank of Bombay
Presidency Banks of Bengal :
The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in 1921
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to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among
Indian commercial banks had emerged. The new bank took on the triple role of a commercial bank, a
banker's bank and a banker to the government. But this creation was preceded by years of deliberations
on the need for a 'State Bank of India'. What eventually emerged was a 'half-way house' combining the
functions of a commercial bank and a quasi-central bank. The establishment of the Reserve Bank of India
as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The
latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for
the transaction of government business at centers at which the central bank was not established. But it
continued to maintain currency chests and small coin depots and operate the remittance facilities scheme
for other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers' bank
by holding their surplus cash and granting them advances against authorized securities. The management
of the bank clearing houses also continued with it at many places where the Reserve Bank did not have
offices. The bank was also the biggest renderer at the Treasury bill auctions conducted by the Reserve
Bank on behalf of the Government.
The establishment of the Reserve Bank simultaneously saw important amendments being made to
the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions
on its business were removed and the bank was permitted to undertake foreign exchange business and
executor and trustee business for the first time.
Imperial Bank:
The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in
terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to
more than six-fold. The financial status and security inherited from its forerunners no doubt provided a
firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently
maintained and the high standard of integrity it observed in its operations inspired confidence in its
depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to
acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's
economic life.
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Stamp of Imperial Bank of India
When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85
crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172
branches and more than 200 sub offices extending all over the country.
First Five Year Plan
In 1951, when the First Five Year Plan was launched, the development of rural India was given the
highest priority. The commercial banks of the country including the Imperial Bank of India had till then
confined their operations to the urban sector and were not equipped to respond to the emergent needs of
economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the
rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a
state-partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with
it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May
1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of
the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India
(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former
State-associated banks as its subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose aided by the 480
offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank.
The concept of banking as mere repositories of the community's savings and lenders to creditworthy
parties was soon to give way to the concept of purposeful banking sub serving the growing and
diversified financial needs of planned economic development. The State Bank of India was destined to
act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national
development.
2.2 VISION:
“My SBH, My customer first.
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My SBH: First in customer satisfaction.”
MISSION
The bank has mission to reach every segment of society through
branch expansion in the remotest corner of the country. To
cultivate entrepreneurship among the needy through micro-
finance. To introduce and run cope with technology enabled
services.
2.3 ORGANISATIONAL STRUCTURE
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2.4 POLICIES & PROCEDURE
STATE BANK OF HYDERABAD – FUNCTIONS AND DUTIES
Power and duties of its officers and employees- All the officers have certain financial powers and
administrative powers depending upon their positions. The delegation of financial powers of various
grades of officials is decided by the Central Board which are revised from time to time, depending upon
the organization’s requirement and also Government / RBI guidelines. The concerned sanctioning
authority takes a decision to sanction a loan or otherwise on merits of each proposal.
The procedure followed in the decision making process, including channels of supervision
and accountability-
There is a well defined system in the Bank regarding the decision making process. Financial decisions are
taken at various levels by different officials depending upon their positions and also through committee
approach. Centralized credit processing cells are being formed at certain centres for sanction of personal
segment loans and loans under SIB segment. Branches will source the applications and forward them to
the respective credit processing cells, for their consideration. Further, there is a well defined
organisational structure and a clear system of accountability and control system, which also take into
account the RBI / CVC guidelines.
The norms set for discharge of its function-
The Bank functions with the following core values / norms
Excellence in customer service
Profit orientation
Fairness in all dealing and relations
Risk taking and innovation
Integrity
Transparency and discipline in policies and systems
Regarding the core functions of the Bank i.e. accepting deposits and sanction of loans, the interest rates
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for deposits / advances and different deposit as well as loan products, are displayed in the Bank’s website
and also made available at all the Branches.
Regarding sanction of loans, each officer of the Bank will consider loan proposals and take a decision
in terms of the scheme of delegation of powers, on the merits of the proposals. All the officers of the
Bank are expected to discharge their duties and responsibilities with integrity and due diligence. Public
can also refer to the captions ''Interest rates', 'code of ethics' & 'citizens charter' of the Bank's website
for any further information.
The rules and regulations, instructions, manuals and records held by the Bank/ used by its
employees for discharging its functions
There are quite a number of documents like manuals, book of instructions, codified circulars,
scheme of delegation of powers, proceedings of the board etc and also the periodical circulars used by the
employees for discharging various functions.
A statement of the categories of documents that are held by the Bank or under its control.
These are mainly register of Shareholders/Record of the proceedings of the AGMs, Board Meetings
and various Committee meetings, documents executed by customers/borrowers/guarantors, contracts with
third parties etc.
The particulars of any arrangement that exists for consultation with, or representation by, the
members of the public in relation to the formulation of its policy or implementation thereof in
SBH.
As per the present arrangement, the Shareholders can raise issues concerning policies and in the Annual
General Meetings which can relate to the policy of the Bank.
Further, the Banks quarterly results and annual results / reports are published in the bank’s website
periodically for information of public as well as shareholders which would give an idea about the policies
of the bank and implementation thereof.
Further, the Central Board the apex management body of the bank is constituted with members who
are leaders from different interest groups and professions such as Industrialists, Bankers from Apex
Institutions, Chartered Accountants, Economists and Workmen representatives. Public can also refer to
the captions financial results / consolidated financial statement / annual report / shareholders
information of the Bank's website, for further information.
Bank has appointed various committees for different purposes. Following are some of the important
Committees managing the key affairs of the Bank
a) Risk Management Committee
b) Credit Risk Management committee
c) Asset Liability Management committee
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d) Operational Risk Management committee
e) Audit Committee
f) Central Management Committee
g) Central as well as Local Boards
Public are not entitled to participate on the above committee meetings and minutes are not accessible to
public. Public can also refer to the caption Annual report for various committees more particularly the
"corporate governance" link under the Annual report for more information about the committees.
2.5 PRODUCTS/SERVICES OFFERED
State Bank of Hyderabad offers its products and services in domains like -
Personal Banking.
NRI Services.
Agriculture.
International.
Corporate.
SME.
Domestic Treasury.
(i) Personal Banking
1. Current Accounts
2. Savings Bank
3. Savings Plus
4. Term Deposits
5. Reinvestment Plan
6. Multi Option Deposits
7. Recurring Deposits
8. Public Provident Fund Scheme
9. Housing Loans
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10. Car Loans
11. Education Loans
12. Consumer Durables Loans
13. Personal Loans
14. Loans to Pensioners
15. Gold Loans
16. Demand Loans on Term Deposits
17. Demand Loans against Govt. Securities
(ii) NRI Banking
1. Foreign Currency (Non Resident) Bank Accounts (FCNB)
2. Non Repatriable Rupee Deposits (NRNR)
3. Non Resident External Rupee Accounts (NRE)
4. Resident Foreign Currency Accounts (RFC)
5. Ordinary Non Resident Rupee Accounts (NRO)
6. Non Resident Special Rupee Accounts
7. Housing Finance for NRIs
(iii) Small Business Finance
1. Retail Trade
2. Professionals and Self Employed
3. Business Enterprises
4. Transport Operators
(iv) Agriculture Finance
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1. Agricultural Crop Loans
2. Agricultural Gold Loans
3. Produce Marketing Schemes
4. Agricultural Term Loans
5. Land Development Schemes
6. Minor Irrigation Schemes
7. Farm Mechanizations Schemes
8. Kisan Credit Cards
(v) Government Business
1. State Govt.
2. Central Govt.
3. CBEC
4. CBDT
5. UMEA
6. Defense
7. Posts
8. Telecom
9. Central Civil Pensions
10. Defense Pensions
11. Telecom Pensions
12. State Govt. Pensions
13. PSU Retiring Employees Scheme
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(vi)Other Services
1. Safe Deposit Lockers
2. Safe Custody
3. Rupee Travelers Cheques
4. Gift Cheques
(vii) Miscellaneous Business
1. Demand Drafts
2. Remittance Facilities (with Associate Banks)
3. Remittance Facilities (with RBI & Govt.)
4. Telegraphic Transfers
5. Collections (Cheques)
6. Collections (Bills)
7. Demand Draft Purchases (Cheques)
8. Demand Draft Purchases (Bills)
2.5.1 CURRENT ACCOUNT
Card Convenience With SBH ATM cum Debit Card and you have access to the widest network of ATMs across the country to withdraw cash, enquire about your balance, etc. Moreover, your card enables you to shop at a large number of Merchant Establishments in India. You can also avail yourself of our International ATM-cum-Debit Card which can be used within as well as outside India, at a nominal fee.Easy and Wide Accessibility Transact at your convenience, saving time and cost through SBH Internet Banking. You can also withdraw cash from Maestro endorsed ATMs of other banks under bilateral sharing, at a nominal fee. Monitoring Your Account
Monitor and control your funds through SBH Internet Banking or/ and through Passbook/ statement of account facility.
Alternatively, access your account by downloading Instant SBH on your computer. .Other Benefits
Overdraft facility. Transfer of accounts between our wide network of branches without any charge.
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Nomination Facility - Available. Low minimum balance requirements
2.5.2 SAVINGS BANK ACCOUNT
SBH Savings Bank Account helps to plan and save for your future financial requirements. Your savings remain liquid, safe and earn moderate interest.
Benefits- i. Card Convenienceii. Easy and Wide Accessibility iii. Monitoring Account.iv. Moderate EarningThe Savings Bank Account earns the holder an interest at the rate of 3.5% p.a., compounded half yearly.v. Money Multipliers
Earning of Interest at Term Deposit rates through Savings Plus Account. Linking Savings Bank Account to your Multi Option Deposit (MOD) Account to earn additional
interest on your surplus money and get the facility of automatic unitised break up of MOD in case there is a shortfall in your SB account to honour the cheque drawn by you.
Value Added FeaturesTransfer of accounts between our wide network of branches without any charge.Nomination facility – Available25 cheque leaves free, in a year.
2.5.3 SAVINGS PLUS ACCOUNT
The Savings Plus ,Account brings to you the best of both Savings Bank and Term Deposit Accounts. This provides you the convenience of a Savings Bank Account along with higher return of Term Deposit.
2.5.4 TERM DEPOSITS
An higher income can be earned on surplus funds by investing those with SBH. It provides security, trust and competitive rate of interest.
Flexibility in period of term-deposit from 15 days to 10 years. Affordable Low Minimum Deposit Amount: You can open a term deposit with SBH for a nominal
amount of Rs.1000/- only.Flexibility in choosing the amount you wish to invest and the maturity period.
2.5.5 REINVESTMENT PLAN
This plan helps to earn interest on interest, thus giving you a two-fold income. You deposit your money with us for any period between six months to 10 years, and we pay you interest on your deposited money plus on the interest you earn. Thus your interest gets compounded every quarter giving you higher returns.
2.5.6 MULTI OPTION DEPOSIT SCHEME
The Multi Option Deposit (MOD) Account is a combination of Savings Bank or Current Account with Term/ Special Term Deposit Accounts, so that one can securely write cheques up to the balance in the
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MOD account or up to the drawing power available as overdraft in the Current account. Withdrawals through ATMs can also be conveniently made.
2.5.7 RECURRING DEPOSIT
Want to create a fund for your children's education or marriage or to buy a car or for a dream holiday? Whatever may be your financial goals, through Recurring Deposit Scheme you can save a little every month so that at the time of need you have sufficient funds to achieve your financial goals. Recurring Deposit provides you the element of compulsion to save at high rates of interest applicable to Term Deposits along with liquidity to access that savings any time. So set aside a small amount every month and earn at compounded rates of interest.
2.5.8 PUBLIC PROVIDENT FUND
PUBLIC PROVIDENT FUND – 1968.Scheme introduced by Central Government in 1968. The Scheme enables the members of the public to make contributions to the Fund and obtain Income Tax rebate under the relevant provisions of the Income Tax.
2.5.9 HOME LOANS
"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBH HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance with SBH's commitment to Environment protection. SBH Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of Hyderabad. Best Practices followed in SBH mentioned below will tell you why it makes sense to do business with State Bank of Hyderabad.
Unique features:
-Provision for on the spot "In principle" approval.
- Loan sanctioned within 6 days of submission of required documents.
- Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest and maximize gains (see SBH Max-Gain in the following sections)
-Option to club income of your spouse and children to compute eligible loan amount
-Provision to club depreciation, expected rent accruals from property proposed to compute eligible loan amount
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-Provision to finance cost of furnishing and consumer durables as part of project cost
-Repayment permitted up to 70 years of age
-Free personal accident insurance cover up to Rs.40 Lac.
-Optional Group Insurance from SBH Life at concessional premium (Upfront premium financed as part of project cost)
-Interest calculated on daily reducing balance basis, and starts from the date of disbursement.
-‘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
-Option to avail loan at the place of employment or at the place of construction
Package of exclusive benefits:
Complimentary international ATM-Debit card Complimentary SBH Classic/ International Credit Card. Option for internet-banking Concessional package under ‘Credit Khazana’ for prospective Auto Loan, Student Loan, Personal
Loan borrowers whose accounts are conducted satisfactorily 50% concession in charges in respect of all personal remittances/ collection of outstation cheques
Personal loan at attractive rates under SBH Home Plus scheme tailored exclusively for SBH Home Loan customers.
Purpose1. Purchase/ Construction of House/ Flat.
2.Purchase of a plot of land for construction of House.3.Extension/ repair/ renovation/ alteration of an existing House/ Flat.4.Purchase of Furnishings and Consumer Durables as a part of the project cost.5.Takeover of an existing loan from other Banks/ Housing Finance Companies.
2.5.10 CAR LOAN
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Move ahead in life with SBH Car Loans. Low interest rates, easy repayment options, total transparency.Finance to include vehicle registration charges, insurance, one-time road tax and accessories (subject to conditions).
You can apply for an SBH Car Loan to purchase:
A new car, jeep, Multi Utility Vehicle (MUV) or SUV (any make or model) A used car / jeep / MUV /SUV (not more than 5 years old). (any make or model)
Enjoy the SBI Advantage :
Excellent service and lower costs. A quick survey of similar schemes available elsewhere and you will find that SBH Car Loans for new and old vehicles offer you :
Lowest interest rates Longer repayment period of up to 84 months. No hidden costs or administrative charges. Finance for one-time road tax, registration fee, insurance premium and accessories. No advance EMIs. (Some Banks/companies ask you to pay one or more EMIs at the time of
disbursement of loan, thereby effectively reducing your loan amount.) Complete transparency: SBH levy interest on daily reducing balance method. When you pay
one installment, the interest is automatically calculated on the reduced balance thereafter. When you pay interest on an annual reducing balance, as charged by many other companies/banks, the interest amount for the coming year is determined on the amount outstanding at the beginning of the year. You continue to pay interest even on the amounts you repay during the year.
2.5.11 EDUCATION LOAN
A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured.
Eligible CoursesAll courses having employment prospects are eligible.
Graduation courses/ Post graduation courses/ Professional courses Other courses approved by UGC/Government/AICTE etc.
Expenses considered for loan
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Fees payable to college/school/hostel Examination/Library/Laboratory fees Purchase of Books/Equipment/Instruments/Uniforms Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees for the entire
course) Travel Expenses/Passage money for studies abroad Purchase of computers considered necessary for completion of course Cost of a Two-wheeler up to Rs. 50,000/-
Any other expenses required to complete the course like study tours, project work etc.
Amount of Loan
For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs
Interest Rates (w.e.f 01.01.2009)
Loan Amount Rate of Interest Special Offer(for the loan sanctioned from 1.5.2009 to 30.9.2009)
Loans upto Rs. 4.00 Lacs 0.50% below SBAR i.e. 11.75% p.a.
11.50% (75 bps below SBAR)
Loans above Rs. 4.00 Lacs and Up to Rs. 7.50 Lacs
1.00% above SBAR i.e. 13.25% p.a.
11.25% (100 bps below SBAR)
Loans above Rs. 7.50 Lacs At SBAR i.e. 12.25% p.a. 11.00% (125 bps below SBAR)
An Interest Rate concession of 0.50% to Girl Student availing Education Loans: 15%;
Repayment Tenure
Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.
Place of Study Loan AmountRepayment Period in Years
Studies in India Rs. 10.0 lacs 5-7 Studies Abroad Rs. 20.0 lacs 5-7
Table No.2.2
(SOURCE –BANK RECORD)
Security:
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AmountFor loans upto Rs. 10.00 lacs for Studies in India and upto Rs. 20.00 lacs for studies abroad
Upto Rs. 4 lacs
No Security
Above Rs. 4 lacs to Rs. 7.50 lacs
Collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional cases, weive third party guarantee if satisfied with the net-worth/means of parent/s who would be executing the documents as "joint borrower".
Above Rs. 7.50 lacs.
Tangible collateral security of suitable value, along with the assignment of future income of the student for payment of installments.
Table No.2.3(SOURCE BANK RECORDS)
All loans should be secured by parent(s)/guardian of the student borrower. In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law.
2.5. 12, CONSUMER DURABLE LOAN-
Right from Refrigerator, to music system to washing machine, you can buy anything. The demand for such loans witnesses a sharp rise during the festive season. 0% loans schemes are popular during this time. The rate of interest on consumer durable loan is lower than the interest on a personal loan. So, taking this loan makes more sense.
2.5.13 SBH SARAL PERSONAL LOAN
Funds readily available to you whenever you desire or need, be it a sudden vacation that you plan with your family or urgent funds required for medical treatment?.SBH Saral - Personal Loan helps to access this facility from over 3000 branches across the country and confidently face the challenge of meeting any kind of personal expenses. Enjoy the SBH Advantage :
Low interest rates. Further, we charge interest on a daily reducing balance!!
Low processing charges; only 2%-3% of loan amount
No hidden costs or administrative charges.
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No security required ……which means minimal documentation…something that you had always
wanted. No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by
prepaying the loan (1% of the loan amount will be charged if you repay the loan before 6 months) Long repayment period of up to 48 months.
2.5 14 LOAN TO PENSIONERS
If a person is a Central or State Government pensioner drawing your pension through one of SBH branches and are not more than 72 years of age She/he can avail of a loan from that branch to meet their personal expenses. They can avail a loan of up to a maximum of 12 months pension, subject to a ceiling of Rs.1, 00,000. The loan may be repaid over 5 years and will carry a low interest rate of 12.75% p.a. There are no processing fees, no hidden costs and no prepayment penalties. Whenever they have some surplus funds, you can credit your loan account, thereby reducing your loan liability and interest burden.
Salient features of the Scheme:
Eligibility: All Central and State Government pensioners, whose pension accounts are maintained by SBH branches. The pensioner should not be more than 72 years of age.
Purpose: To meet personal expenses.Loan amount : A maximum of 12 months pension with a ceiling of Rs.1,00,000/- Margin : Nil
The spouse eligible for family pension should guarantee the loan or any other family member or a third party worth the loan amount
2.5.15 LOANS AGAINST GOLD ORNAMENTS
Size of Credit Limit Rate of Interest
Upto Rs. 1,00,000/- At SBAR i.e. 12.25% p.a.
Above Rs. 1,00,000/- 0.50 above SBAR i.e. 12.75% p.a.
Table No. 2.4(SOURCE-BANK RECORDS)
2.5.16 LOAN AGAINST SHARES \ DEBENTURES
Leverage your investments in shares, debentures, public sector bonds and Government securities for loans to meet unforeseen expenses!! You need not miss out on the next stock market boom!! Avail of loans up to Rs.20.00 lacs against your shares/debentures to enable you to meet contingencies, personal needs or even for subscribing to rights or new issue of shares.
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Note: Loan will not be sanctioned for 1. speculative purposes 2. inter-corporate investments or 3. acquiring controlling interest in company/companies.
Enjoy the SBH advantage Low interest rates. Further, we charge interest on a daily reducing balance!! Low processing charges; only 1% of loan amount - compare with 1-3% of others. No hidden costs or administrative charges.. No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by
prepaying the loan.
2.5.17 FOREIGN CURRENCY (NON-RESIDENT) BANK ACCCOUNTS(FCNB). Features
These accounts can be opened/credited with remittances from abroad/transfers from existing NRE/FCNR accounts/deposit of foreign exchange brought into India during visits to India.
Term Deposit (cumulative or non-cumulative) accounts for periods from 6 months to 3 years can be maintained in US Dollars, Pounds Sterling, Deutsche Marks, Japanese Yen or Euros.
These accounts involve no exchange loss, as interest and principal are payable in US Dollars, Pounds Sterling, Japanese Yen, Deutsche Marks or Euros.
Accounts can be opened jointly only with another Non-Resident Indian. Withdrawals for local payments or payments abroad in any convertible currency are allowed
without Reserve Bank of India's approval. Loans against deposits are available for purposes other than re-lending/carrying on agricultural/
plantation activities/real estate business.
Interest Rates*
Applicable with effect from 12th August 2000
Period of the Deposit STG US$ DM** Yen Euro 1 year and above but less than 2 years
6.00 6.75 4.25 0.20 4.25
2 years and above but less than 3 years
6.10 7.00 N.A 0.30 4.50
3 years only 6.25 7.00 N.A. 0.50 4.50
Table No.2.5(SOURCE –BANK RECORDS)
Reinvestment Plan
Period Maturity Amount for 100 Units Months STG US$ DM** Yen Euro12 106.0900 106.8639 104.2952 100.2001 104.295224 112.7696 114.7523 N.A. 100.6014 109.308336 120.2773 25122.95 N.A. 101.5094 114.2825
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Table No.2.6
(SOURCE BANK RECORDS)
2.5.18 NON-RESIDENT NON-REPATRIABLE RUPEE ACCOUNTS(NRNR)
Features
NRNR accounts can be opened by way of transfer of funds from abroad or from existing NRE/FCNR accounts.
Deposits will be accepted for maturities of six months to three years. Interest is offered at rates higher than those offered on NRE accounts.
Loans against deposits are available in India. The interest earned is freely repatriable. These accounts can be opened jointly with residents also.
2.5.19 NON-RESIDENT (EXTERNAL) RUPEE ACCOUNTS (NRE)
OptionsSavings Bank AccountsCurrent AccountsTerm DepositsSpecial Term Deposits (Cumulative Interest)Recurring DepositsCash Certificates
Features
These accounts can be opened/credited with remittances from abroad/transfer from existing NRE/FCNR accounts/deposit of foreign exchange brought into India, during visits to India.
Accounts can be opened jointly only with another Non-Resident Indian. Non-Resident Indians can authorise residents to operate their NRE accounts for local payments
through a power of attorney/letter of authority. You may download the letter of authority by clicking here.
Transfer of funds between NRE accounts of different persons, for genuine personal purposes, is freely permitted.
Withdrawals for local payments or payments abroad in any convertible currency are allowed without Reserve Bank of India's approval.
Loans against deposits are available for purposes other than re-lending/carrying on agricultural/ plantation activities/real estate business.
Interest rates*
Applicable with effect from 5th March 1999
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TABLE SHOWING THE PERIOD OF INTEREST AND RATE OF INTEREST
Period of the Deposit Rate (% p.a.)6 months to less than 1 year 7.001 year to less than 3 years 9.50 3 years and above 10.50
Table No. 2.7
(SOURCE : BANK RECORDS)
2.5.20 ORDINARY NON-RESIDENT RUPEE ACCOUNTS (NRO)Options
Savings Bank AccountsCurrent AccountsTerm DepositsSpecial Term Deposits (Cumulative Interest)Recurring DepositsCash Certificates
Features
Accounts can be opened/credited with legitimate local funds of the non-resident Indian; foreign exchange funds may also be credited into the accounts.
Accounts can be opened jointly with non-residents/residents. Funds in the accounts cannot be remitted abroad but used only for local payments. Interest rates are the same as in the case of domestic deposits. Interest earned on the accounts can be remitted abroad against application on form RC1, along
with a Chartered Accountant’s Certificate and an undertaking/certificate regarding payment of tax from the Income Tax authorities.
Interest is subject to deduction of tax at source at the rate of 30%. Loans against the deposits can be availed of for purposes other than relending, carrying on
agricultural/plantation activities/real estate business.
Interest rates*
Period Rate (% p.a.) 15 days and up to 45 days 5.00% 46 days and up to 179 days 6.25% 180 days to less than 1 year 7.00% 1 year to less than 2 years 8.50% 2 years to less than 3 years 9.00% 3 years and above 10.00%
Table No.2.8
(SOURCE-BANK RECORDS)
Reinvestment plan
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Period (months) Maturity amount for Rs.100 12 108.774824 119.483136 134.488948 148.450660 163.861672 180.872684 199.649596 220.3757108 243.2535120 268.5064
Table No. 2.9(SOURCE-BANK RECORDS)
a.) 0.50% more in case of single deposit of Rs.15 lacs to less than Rs.1 crore b.) 0.75% more in case of single deposit of Rs.1 crore to less than Rs. 10 crores. c.) The rate is quoted daily for single deposit of Rs. 10 crores and above. Savings Bank Deposits: 4.00% p.a.Effective from: 1st April 2000.
2.5.21 RESIDENT FOREIGN CURRENCY ACCOUNTS (RFC)
Features
NRIs returning permanently after a continuous stay of minimum one year abroad, can open Resident Foreign Currency accounts with banks in India. NRIs returning after less than one year should obtain RBI's permission for opening such accounts.
Accounts can be maintained as term deposits in US Dollars only for 6 and 12 months. The minimum deposit accepted is US $1,000 . The balances in NRE/FCNB accounts and other foreign exchange funds brought in by the NRI at
the time of return and subsequently from the assets maintained abroad can be freely invested in RFCs.
The funds in RFCs can be remitted abroad for any bonafide purpose of the account-holder or his dependents without RBI`s approval.
The funds can also be withdrawn in rupees for local payments. If the Returning Indian subsequently goes abroad to become an NRI, the balance in his RFC account can be converted to an NRE/FCNR account.Tax on the interest income from RFC is exempted till such time as the Returning Indians maintain the status of 'Resident but Not Ordinarily Resident'.Hence if the Returning Indian has been Non-Resident for a continuous period of 2 years, he can get exemption from income tax for 9 subsequent years, till he becomes 'Resident and Ordinarily Resident'.
Interest rates*Applicable with effect from 29th May 2000
Period (Months) Rate (% p.a.) Minimum Deposit 6 6.25% US$ 1000
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12 6.50% US$ 1000
Table No.2.10
(SOURCE-BANK RECORDS)
2.5.22 NRI HOME LOAN
SALIENT FEATURESPurpose of Loan
Loans to NRIs & PIOs can be extended for the following purposes.
To purchase/construct a new house / flat To repair, renovate or extend an existing house/flat 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
Eligibility criteria
Minimum age 21 years Valid Indian Passport (for NRIs)/ valid foreign passport (for PIOs) Steady source of income Employed abroad for at least 2 years Valid job contract or work permit Minimum net monthly income (NMI) of US$ 500 or minimum Net Annual Income (NAI) of US$
6000/- (or its equivalent in any other foreign currency)
Loan AmountMinimum loan amount : Rs. 3 lakhsMaximum loan eligibility :
60 times NMI/5 times NAI for applicants below 45 years of age
48 times NMI/4 times NAI for applicants above 45 years of age
Subject to the following :Maximum loan amount for repairs and renovation : Rs.10 lacsMaximum loan amount for purchase of plot for construction of house : Rs.20 lacsMaximum Loan amount for purchase of furnishings and consumer durables : 10% of the project cost, subject to a maximum of Rs.3 lacs. Aggregate repayment obligations should not exceed 50% of NMI/NAI
Margin: 15%Processing Fee: 0.50% of the loan amount (incl. service Tax)Advocate's fee and Valuer's fee extraInterest Rate:
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Interest rates are same as applicable for resident Indian borrowers for various tenures, available on fixed/floating/combination of fixed and floating rates (under SBI-Flexi Home Loans)
Repayment in EMIs (Equated Monthly Installments) Interest is applied on daily diminishing balance basis
Maximum Repayment Period
For borrowers aged upto 35 years : 25 years
For borrowers aged above 35 but below 45 years : 20 years
For borrowers aged 45 years and above : 15 years
Subject to liquidation of loan by the age of 60 years or the age of retirement whichever is earlier
Mode of Repayment
Remittances from abroad through normal banking channels Out of funds in NRE/FCNR/NRO accounts Remittance out of local funds by close relatives. Moratorium period In respect of construction of new house/flat - 24 months from the date of first disbursement or 2
months after completion, whichever is earlier In other cases - 2 months after last disbursement
Security
Equitable mortgage by deposit of title deeds Registered Mortgage may be taken when considered necessary Additional security by way of lien over credit balances in deposit accounts, NSCs, Life
policies ,Third Party Guarantees etc. may be taken, if security is either inadequate or not free from encumbrances
Innovative and Hybrid suite of Home Loan products to choose from :
SBH Maxgain Home Loans- which enable the borrower to avail the Loan as an Overdraft. The borrower can park his surplus funds in the loan account, significantly reducing his interest burden/optimize yield on his funds. Borrower is eligible for International ATM-Debit Card, Internet Banking Facility and cheque book to operate the loan account.
SBH-Flexi Home Loans- facility to avail Home Loan with a customized combination of fixed and floating interest rates, to effectively hedge the risks arising due to interest rate volatility
SBH-Realty Home Loans- Exclusive scheme to suit the requirements of borrowers who intend to avail loan for purchase of plot of land for construction of house
SBH-Freedom Home Loans- Tailor made product for NRIs, enabling the borrowers to avail loan by pledging other securities like Banks deposits/National Savings Certificates/ Life policies etc. standing in the name of the applicant/ third party- complete freedom from the hassles of mortgage formalities.
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2.5.23 RETAIL TRADE
The Bank finances Small Business activities that can be started with relatively lower investment and with no special skills on the part of the entrepreneurs.
In this category, the SBH extends loans to retail traders who act as a vital link between the manufacturers of goods or commodities and the consumer.
The bank offers working capital products as well as loans for purchase, renovation and repairing of equipment.
Retail trade finance is normally capped at Rs 5 lakh. Any individual or a firm (partnership or proprietorship) engaged primarily in buying and selling mercantile goods is eligible for this mode of finance.
For requirements up to Rs 25,000, no margins are involved. For needs ranging from Rs 25,000 to Rs 50,000, the margin is set at 20 per cent. In other words, the quantum of the loan will be restricted to 80 per cent of the unit's expenditure. For fund needs above Rs 50,000, a 25 per cent margin may be applied.
2.5.24 BUSINESS ENTERPRISE
SBH Business Solutions supports the needs of small to midsize enterprises through innovative products in the back office sector. The main components of back office support include web content and accounting services.In the web content business, SBH Business Solutions creates databases of business documentation expertise and laws and regulations essential to enterprise operations. It then offers related management solutions. In this way, the many types of forms within a company can be standardized and information can be more efficiently managed. Many companies and financial institutions such as major banks, regional banks, and credit associations are using products and services of SBH Business Solutions.
In the accounting services business, SBH Business Solutions sets up, improves, and outsources financial accounting work. The company helps
1) publicly-listed companies prepare consolidated account and disclosure information, 2) funds and special purpose companies prepare consolidated account information, 3) companies introduce accounting systems. In addition, SBH Business Solutions offers ASP
services. These solutions enable flexible and stable financial management through each stage of enterprise growth, from before going public to after. Thus far, SBH Business Solutions has accumulated a solid performance record through financial accounting support of over 100 venture enterprises.
This is an age in which an enterprise environment can change at a dizzying rate. To ensure sound growth in such an environment, a rock-solid back office infrastructure is essential. In the back office sector, SBH Business Solutions offers information, technology, and services to deal with changing conditions related to the legal system (corporate and tax laws), advances in information technology, office systems based on a rich web environment, and the difficulty of ensuring back-office talent.
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2.5.25 TRANSPORT OPERATORS
Under small business finance, the SBH extends loans to transport operators in different forms. The bank offers working capital products as well as term loans for purchase of vehicles. The bank finances up to 10 vehicles irrespective of the loan amount.
All transport operators whether individuals or associations of not more than six persons are eligible for this mode of finance.
For requirements up to Rs 25,000, no margins are involved. For needs above Rs 25,000, the margin may range from 15 per cent to 25 per cent.
2.5.26 CROP LOAN (ACC)
PurposeFinancial assistance to meet cultivation expenses for various crops.
Who are eligible for crop loan Agriculturists, Tenant farmers and Share Croppers who actually cultivate the lands are eligible for these loans. All categories of farmers - Small/Marginal (SF/MF) and others are included.
Loan AmountLoan amount is worked based on the cost of cultivation incurred for each crop per acre of crop cultivated and 90 % of the cost of cultivation (Scale of Finance) is given as loan.
Disbursement of the loan As per the cultivation requirements of the crop the loan amount is disbursed in cash and kind (for ferlizers, pesticides etc)
2.5.27 AGRICULTURAL GOLD LOAN
Agriculture term loans refer to capital investments required by farmers to realize benefits over a period of time. The outlay, is according to the NABARD unit of the scheme cost. The schemes are financed subject to the technical feasibility and economic viability of the proposal in the area of operation.
EligibilityAll individuals, groups of individuals, and corporate entrepreneurs who have experience in the line of activity
MarginNo margin up to Rs.10, 00015% to 25% above Rs.10, 000
Security Term loan Where movable assets are created:
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Up to Rs.25000: Hypothecation of assetsOver Rs.25000: Hypothecation of assets and mortgage or declaratory charge over farm lands or 3rd party guarantee.
Where movable assets are not created:Up to Rs.10000: DP Note, DP Note delivery letterOver Rs.10000: Mortgage of farmlands or 3rd party guarantee
DisbursementIn Instalments according to the progress of work and amount payable direct to suppliers wherever moveable assets are financed
RepaymentMinimum of 3 years with a maximum repayment period of 15 years including the gestation period depending on the type of schemes and in line with NABARD norms
Insurance Waived up to Rs.10, 000
2.5.28 LAND DEVELOPMENT SCHEMES
Credit solutions for land development projects in the form of direct finance to cultivators for better productivity.
Loans under this head cover various activities like land clearance(removal bushes, trees, etc.), land leveling and shaping, contour/graded bunding,bench terracing for hilly areas, contour stone walls, staggered contour trenches ,disposal drains, reclamation of saline/alkaline soils and fencing etc.Who are eligible for Term LoansAll farmers owning agricultural land are eligible.Loan amount Upto Rs. 50,000/- 100 % of the cost of the asset / project cost is provided as loan. Above Rs. 50,000/- upto 85 % of the cost of the asset / project is given as loan.
2.5.29 MINOR IRRIGATION SCHEMES
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Credit for creating irrigation facilities from underground / surface water sources All structures and equipments connected with it are also financed. Loans cover various activities like digging of new wells (open/bore wells), deepening of existing wells (traditional/in well bore), energisation of wells (oil engine/electrical pump set), laying of pipe lines, installing drip/sprinkler irrigation system and lift irrigation system.
Who are eligible for Term LoansAll farmers having a known source of water which can be exploited for irrigation purpose.Loan amount Upto Rs. 50,000/- 100 % of the cost of the asset / project cost is provided as loan.Above Rs. 50,000/- upto 85 % of the cost of the asset / project is provided as loan.
2.5.30 FARM MECHANISATION SCHEMES
PurposeCredit for purchase of farm equipment and machinery for agricultural operations.The scheme covers activities ranging from purchase of tractors and accessories,trailers, power tillers, combine harvesters, power sprayers, dusters, threshers etc.
Who are eligible for Term LoansFarmers owning mare than minimum acreage of perennially irrigated lands are eligible (for power tillers 2 acres, for tractors 4 acres for > 35 HP and 6 acres for above 35 HP and for combine 8 acres). Eligibility for purchase of other farm equipment is decided on the income generated by the agri activity undertaken by you.
Loan amount Upto Rs. 50,000/- 100 % of the cost of the asset is provided as loan. Above Rs. 50,000/- upto 85 % of the cost of the asset provided as loan.
2.5.31 KISAN CREDIT CARD SCHEME (KCC)
To extend adequate and timely support to farmers for their short term credit needs.Farmers with excellent repayment record for 2 years. New farmers with sizeable deposits with our branches for 3 to 4 years are also eligible. Farmers who have defaulted in repayment but have liquidated the out standings are also eligible. Loan Amount:
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Loan amount is decided based on the cropping pattern, ancillary and contingency needs of the farmer for the full year. 90 % of the cost of cultivation (Scale of Finance) is given as loan per acre. 100 % of the cost is available as loan up to Rs. 50,000/- and 85 % of the cost is available as loan above Rs. 1,00,000/-Disbursement of the loan:As per the cultivation requirements of the crop the loan amount is disbursed in cash and kind (for ferlizers, pesticides etc)
2.5.32 GOVERNMENT BUSINESS
State Bank of Hyderabad's linkage with Government business are widespread. No wonder that out of 9315 branches in India, about 7000 branches are conducting Government Business. The large network of our branches provides easy access to the common man to deposit the following Government dues and pension payments
2.5.33 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
2.5.34 SAFE CUSTODY
Facilitates Maintaining Security Balance in electronic form.
2.5.35 GIFT CARDS
Presenting Gifts to Employees is an integral and unique culture in India. Traditionally, gifts have been given to employees in the form of cash or kind. With the advancement of Banking, Gift Cheques were introduced, allowing the employees to use the money according to their wishes. These cheques, however, are accepted at the issuing bank branches only. The SBI Gift Card, issued in association with VISA International, is one such product which gives the comfort of convenience and wide acceptability.
Gift Card is a Pre-paid Plastic Card supported by Magnetic-strip based technology. It is usable at all VISA
enabled Merchant Establishments and POS by signature/ PIN. It is a perfect
substitute for Gift Vouchers sold by many retail houses as its use is not restricted to any particular Merchant Establishment/ Point of Sale.
2.5.36 DEMAND DRAFT IN INDIAN RUPEES
You can obtain a DD in rupees issued by SBH/ correspondent banks or exchange companies in UAE, Bahrain, Oman & Qatar having Rupee Drawing arrangement with this bank and mail it to the branch of SBH where your account is maintained. Rupee DDs obtained from exchange companies in the Gulf drawn on designated branches of SBH under Rupee Drawing arrangement are immediately paid on receipt or through clearing and amount credited to your account without
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any deductions.
2.5.37 REMITTANCE FACILITIES:
i. Customers can make local payment through Banker’s Cheques and remit funds from one centre to
another through drafts, telegraphic transfers, electronic funds transfer (RTGS,EFT,ECS etc) at specified
service charges (exchange).
ii. Drafts are issued on our branches. They are issued on the branches of Associate Banks at centres
where we do not have any branch.
iii. The issue and payment of Banker’s cheques and drafts in cash across the counter is subject to Income
Tax provisions and RBI guidelines against money laundering activities. Issue of these instruments of Rs.
50,000/- and above is not permitted against cash but only through debit to customer’s account or against
cheques/other instruments tendered by the purchaser.
iv. Banker’s cheques / drafts for an amount of Rs.50,000/- and over will not be paid in cash, but only for
credit of the payee’s account or to his banker.
v. Drafts of Rs.50,000/- and above are required to have signatures of two authorised officials. Before
taking delivery of the drafts, please verify that the draft is complete in all respects including signature of
the official(s) along with their specimen signature numbers at the place provided for.
vi. Banker’s cheques and drafts are valid for 3 and 6 months respectively and can be revalidated by
issuing branches on written request of the purchasers. The drafts can be revalidated by the payee(s) if
they are identified as the holder in due course. The drafts can be revalidated only once within one year
from the date of issue. After one year of the draft, they are to be cancelled at the issuing branch, and a
fresh draft obtained after paying the requisite service charges.
vii. In respect of lost drafts, duplicate drafts for amounts above Rs 10000/-(in cases where there is no
reason to doubt the bonafides of the applicant) shall be issued by the issuing branches on receipt of
confirmation of non payment from the drawee branch and on execution of stamped letter of indemnity
with two sureties good for the amount involved.
viii. For issue of duplicate drafts up to Rs.10, 000/- requirement of the relative non-payment certificate
from the other branch is waived. For issue of duplicate drafts below Rs.1,000/-, only indemnity letter will
be necessary. The customer should inform the issuing branch promptly of loss of demand draft giving full
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particulars thereof in order to prevent misuse thereof.
ix. The Bank may not insist on production of sureties for issue of duplicate demand drafts for amounts up
to Rs 50, 000/- if the applicant/purchaser after complying KYC norms is maintaining a satisfactorily
conducted account with the issuing branch for a minimum period of six months as on the date of issue of
original draft and he/she is considered good for the amount involved.
x. The bank will issue duplicate demand draft to the customer within 14 days from the date of receipt of
request. For delay in issuing duplicate draft beyond the above stipulated period, the banks will pay
interest at the rate applicable for fixed deposit of corresponding maturity in order to compensate the
customer for such delay.
xi. Where the bank is found to have committed an error in non payment of a draft/remittance issued by it
to a holder in due course, the customer will be compensated with interest at SBAR for the number of days
the instrument remains unpaid from the date of its first presentment.
2.5.38 TELEGRAPHIC TRANSFER
For quick credits to your account you can send wire transfer/ telex transfers through our offices/ correspondent banks. Facility of transfer by wire /telex is available at branches having SWIFT/ TT drawing arrangements. For transferring funds through our corresponding banks you may furnish details in the following format.
2.5.39 PERSONAL CHEQUES/DDS/TRAVELLER’S CHEQUE
You can also deposit your personal cheques drawn in foreign currencies payable at foreign centres for credit to your account or for issue of NRE/ FCNRB deposits Proceeds of the cheque collected through our own Global Link Service (GLS) or through accredited correspondents will be credited to your account after some cooling off period depending on the currency of the cheque.
2.5.40 RTGS
RTGS is a software package which provides online settlement of payments between financial institutions. In this system payment instructions between banks are processed and settled individually and continuously throughout the day. This is in contrast to net settlements where payment instructions are processed throughout the day but inter-bank settlement takes place only afterwards typically at the end of the day. Payee banks and their customers receive funds with certaintly, or so-called finality, during the day, enabling them to use the funds immediately without exposing themselves to risk. A lag between the time at which information is made available to receiving banks and the time at which settlement takes place may have important risk implications in large fund transfer systems. To initiate a funds transfer, the sending bank dispatches a payment message which is subsequently routed to the central bank and to the receiving bank as the system processs and settles the transfer. RTGS system settles payments on a
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transaction-by-transaction basis as soon as they are accepted by the system. RTGS systems do not create credit risk for the receiving participant because they settle each payment individually, as soon as it is accepted by the system for settlement. RTGS system can require relatively large amounts of intraday liquidity because participants need sufficient liquidity to cover their outgoing payments. The cost of intraday liquidy depends on variables such as amount required, the opportunity cost of maintaining liquid balances and the cost of intraday credit.
2.5.41 SBI LIFE INSURANCE-
When one is worrying too much about one’s savings, investments, etc and when one feels insecure about his/her life, it’s time for him/her to insure his/her life. And what can be better than SBI Life Insurance! SBI, a leading company in India, offers a comprehensive range of life insurance and pension products. SBI Life Insurance is an integral part of the SBI Group. It is a joint venture between the State Bank of India and BNP Paribas Assurance. It is also the largest banking franchise in India. SBI Life Insurance comprises Banc assurance, Agency and Group Corporate.
SBI Life Insurance Products:-
SBI Life Insurance features both individual and group products like:
Unit Linked Products: this is a single non participating product group that meets both the financial as well as insurance needs.
Pension Products: these comprehensive plans help to meet your post retirement financial needs.
Pure Protection Products: nobody can predict future. So, any time anything can shatter one’s dreams. Pure Protection Products help to keep one safe and secure during these trouble times.
SBI Life also offers some protection cum savings products and money back scheme products. SBI also has products for brokers. These products take inspiration from the endeavors of various industries and make your life easy.
Other SBI Life Insurance plans are:
Retirement Solutions Protection Plans Specialized Term Insurance Group Term with ROP Group Loan Protection Products
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Group Savings Protection Products
Group Micro Insurance
Market share of SBI life-
2.5.42 SBI MUTUAL FUND
SBI Mutual Fund operates under State Bank of India and Societe Generale Asset Management of France and has asset management experience of more than 25 years. SBI Mutual Fund offers different kinds of products like growth based products, income based products and balanced funds.
The SBI Mutual Fund operates under State Bank of India and Societe Generale Asset Management of France. With over twenty years of experience in asset management, the company has grown immensely since its establishment. SBI Mutual Funds offer innovative mutual fund products to its wide pool of customers and its products are available across India. It has a wide portfolio of products that meet the requirements of different types of investors. The SBI Mutual Fund is headed by Mr. Syed Shahabuddin, Managing Director of the company.
Products and services offered by the SBI Mutual Fund are as follows:Equity / Growth based products- The equity based funds offered by SBI Mutual Fund, are as follows -
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Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier Plus 1993 Magnum Sector Funds Umbrella MSFU - FMCG Fund MSFU - Emerging Businesses Fund MSFU - IT Fund MSFU - Pharma Fund MSFU - Contra Fund SBI Arbitrage Opportunities Fund SBI Blue chip Fund SBI Infrastructure Fund - Series I SBI Magnum Taxgain Scheme 1993 SBI ONE India Fund SBI TAX ADVANTAGE FUND - SERIES I
Debt / Income based products-The debt based funds that are in operation now, are as follows -
Magnum Children's Benefit Plan Magnum Gilt Fund Magnum Gilt Fund (Long Term) Magnum Gilt Fund (Short Term) Magnum Income Fund Magnum Income Plus Fund Magnum Income Plus Fund (Saving Plan) Magnum Income Plus Fund (Investment Plan) Magnum Insta Cash Fund Magnum InstaCash Fund -Liquid Floater Plan Magnum Institutional Income Fund Magnum Monthly Income Plan Magnum Monthly Income Plan Floater Magnum NRI Investment Fund SBI Capital Protection Oriented Fund - Series I SBI Debt Fund Series SDFS 15 Months Fund SDFS 90 Days Fund SDFS 13 Months Fund SDFS 18 Months Fund SDFS 24 Months Fund SDFS 60 Days Fund SDFS 180 Days Fund SBI Premier Liquid Fund SBI Short Horizon Fund
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SBI Short Horizon Fund - Liquid Plus Fund SBI Short Horizon Fund - Short Term Fund
Balanced funds - The balanced funds that are in operation now, are as follows -
Magnum Balanced Fund Magnum NRI Investment Fund - FlexiAsset Plan
2.6 GROWTH
Press Release – FY 09 Results
SBH net profit crosses Rs. 9100 crores for FY 09,
– Net Profit for FY 09 increased to Rs 9,121 crores up by 35.5% as compared to Rs 6,729 crore in FY 08.
– Net Profit for Q4 FY 09 increased to Rs 2,742 crores, up by 45.62% as compared to Rs 1,883 crore in Q4
FY 08.
Total business growth of Rs 3,30,899 crore in FY 09, including international business growth of Rs
39,384 crore.
Deposits up by Rs 204,669 crores (International deposits up by Rs9314 crore), y-o-y growth of 38.08%
– Strong CASA growth at 23%; Market share in Demand Deposits up by 367 bps to 17.53% from 13.86%.
– TD growth of 41%, giving ample resources for lending in FY 10
The 1000-day deposit scheme was launched to address tightness in liquidity prevailing in Sep 09; Interest
rates on this have since been dropped by 300 bps to 8%.
Bulk deposits (DIR) as a percentage of total deposits have decreased from 14.13% in FY 08 to 10.81%
in FY 09
Advances up by Rs 126,231 crore (International advances up by Rs 30,070 crore),y-o-y growth of
29.88%..
The revised targets set by the Government in respect of advances have been achieved.
Large corporate book up by 47%, Iron, Steel, Petroleum, Telecom Infrastructure are the main drivers of
growth. SBI is now World #1 in the mandated arranger ranking in Q4 FY 09 (Source: Dealogic).
Mid corporate advances grew by 23%, SME grew by 26%,
Education loans are up by 50%, Auto loans up by 36%, Housing loan portfolio up by 21%
International advances up by 54%
Priority Sector targets and targets for Agri have been achieved.
Deployment of fresh funds has already begun; Rs. 24,334 crore disbursed in Feb/Mar 09.
Cost / Income ratio has improved by 241 bps from 49.03% in March 08 to 46.62% in March 09
Other income increased by 45.96% to Rs. 12,691 crore in FY 09.
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Core fee income increased by 29% to Rs 7,617 crore. Major contributors are commission, exchange,
brokerage, loan processing fees, account maintenance charges, etc.
Treasury income increased by 171% to Rs 2,566 crore on account of profit on sale of investments.
Dividend income increased by 107%.
Staff costs have increased by Rs 1961 crore,(25.19%) driven by
increase in pension provisions by Rs 960 crore from Rs 574 crore in FY 08 to Rs 1,534 crore in FY 09.
The liability as of March 31, 2009 has increased as a result of fall in interest rates.
Increase in provisions for wage increase by Rs 805 crore from Rs 575 crore in FY 08 to Rs 1,380 crore in
FY 09.
New operating architecture enabling rapid and cost-effective growth.
More than 800 new branches added during the year; branch network crosses 11,500, including 93
branches overseas.
30,127 staff recruited in FY 09.
24x7 contact center started; Customers can use a toll-free number.
NPAs remain under control
Gross NPA Ratio has improved from 3.04% in March 08 to 2.84% in March 09.
International NPAs have increased by 955 crores as a result of the economic slowdown, particularly in
USA, Male and Singapore.
Domestic NPAs alone have increased by only Rs 1,774 crores. Of this, Ratnagiri Power alone
contributed to Rs 1,651 crore of the increase.
Net NPA Ratio is stable 1.78% in March 08 and 1.76 % in March 09.
Total amount restructured during the year Rs 8,310 crore.
Capital Adequacy As on 31 Mar 09, CAR under Basel II is above 14% (14.25%). Further, CAR
under Basel II is more than that of Basel I due to implementation of Risk Mitigation Techniques..
TOTAL TIER I
Basel I (%) 12.97 8.53
Basel II (%) 14.25 9.38
Branch expansion:
Market share in branches has increased to 14.48% from 13.70%. during the year, ATM network was
expanded to 8,581 ATMs, up by44%.
Market share in aggregate deposits has increased from 15.41% in March 08 to 17.72 % in March 09
Market share in advances has increased from 15.20% in March 08 to 16.03 % in March 09.
Home Loans
Sanctioned Rs. 2,348 crore under New Happy Home loan Scheme (8% interest rate for first year) till Mar
09; scheme extended to Sep 09.
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Share in incremental loans among banks is 46.62% till Feb ’09
Auto Loans
Market share increased to 12% of new vehicle sales from 10% (source: SIAM)
Tie-up entered with Tata Motors Ltd, for Tata Nano bookings
Tie-ups existing with Maruti and Hyundai as well
Growth is significantly higher than closest competitor (22%)
Rural Business
The Bank strongly believes in ‘Financial Inclusion’ and has set itself the mission of being the
‘Banker to every Indian’ household.
17,979 Customer Service Points / BCs / BFs are in place to cater to 52,782 previously unbanked
villages
Scaling up branch network; 481 branches added in rural and semi-urban areas in FY 09 taking the
total to 7,696;
ATM network in rural and semi-urban areas increased to 3,800.
Plans in place to cover an additional 50,000 villages in FY 10.
Enhancing loan processing capacity by setting up additional rural central processing centres – 158
in place by March 2009, which is being expanded to 300 by March 2010.
Using technology to cover unbanked villages and increasing financial inclusion through Internet
Kiosk, Mobile banking.
Number of Self-Help Groups financed surpassed 1 million during FY09.
Agricultural Debt Waiver and Debt relief scheme.
Total amount involved under Agricultural Debt Waiver and Debt relief scheme is around Rs
10,200 crore.
The expected claim from the government will be Rs 6,600 crore.
Claims filed thus far is Rs 5,287 crore, of which Rs 2,168 crore has been already received.
Around 42 lac farmers benefitted under the Scheme.
Loss of interest is Rs 188 crore; However, this has resulted in an NPA reduction of Rs 1,500
crore
International Loans
Loan book in USD terms has grown from USD 14.49 Bn to USD 17.05 Bn (17.7%);
Rupee depreciation accounts for the rest of the growth.
PROFITABILITY – FY 09
Net Profit increased by 35.55% to Rs. 9121.23 crore in FY 09.
NII increased by 22.63% during FY 09 to Rs. 20873 crore from Rs.17,021 crore in FY 08
Interest income on advances increased by 31.76% during FY 09 over FY 08 driven by growth and
increase in yields.
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Interest expense on deposits increased by 40.13 % over FY 2008.
NIM at 2.93% in March 09 vs. 3.07% in March 2008.
Other income increased by 45.96% to Rs. 12,691 crores in FY 09.
Core fee income increased by Rs.1703 crore, an increase of 29%.
Operating expenses increased by 24% to Rs. 15,649 crore, mainly on account of higher provisions
for salary revision and for pensions.
100% rollout of core banking system covering all branches and 100% of business – the largest
such system in the world.
.
PROFITABILITY – Q4 FY 09
Net Profit increased by 45.62% to Rs. 2742.43 crore in Q4 FY 09.
Interest income on advances increased by 25.83% during Q4 FY 09 over Q4 FY 08 driven by
growth and increase in yields.
Interest expense on deposits increased by 53.47% over Q4 FY 08.
Other income increased by 67.49% in Q4 FY 09.
Operating expenses increased by 31.98% to Rs. 4283 crore;
3 DEPARTMENTS-
The different departments in State bank of Hyderabad are-
Global Market Department.
Corporate Banking Group.
Mild Corporate Group.
National Banking Group.
Rural Business Group.
Marketing and cross-selling Department.
Corporate strategy& New Business.
IT(Information Technology) department.
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Business Intelligence Department.
Customer Service & Community Service department.
Human Resource department
Official Language department.
Banking Operation department.
3.1 Global Market Department-
Global Market Department at the corporate centre handles the Bank treasury operations across all time
zones and covers activities in various Market-
Forex Market.
Interest Rates.
Bullion.
Equity.
Alternative Assets.
3.2 Corporate banking group.
It consist of three SBU viz-
Corporate Accounts group.
Project finance group.
Leasing SBU.
Stressed assets management group.
3.3 Mild Corporate Group
The group handles about 42% of the total C&I nonfood advances of the bank. It operates through 8
regional offices and 53 branches.
3.4 National Banking groups
National Banking group consist of three business group viz. Personal banking, small and medium
enterprises and government banking and handles 34.41% of total domestic credit and 59.21% of total
domestic deposit business of the bank as on 31-03-2009.
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3.5 Rural Business group-
Rural business group deals with the business of the bank at all rural and semi urban centers.
It now handles a deposit portfolio of Rs 2, 15,931 crores and credit portfolio of Rs1, 20,617 crores which
is 32% and 26%of the banks total domestic deposit and credit portfolio respectively as on 31-03-2009.
3.6 Marketing and cross selling department-
Consistent efforts by the Bank have resulted in emergence of Cross-Selling as an important source of income. Initiatives taken by the Marketing-Cross Selling Dept. has earned the Bank an income of Rs.166.45 crores during the financial year ending March 2009 despite the adverse economic scenario.
3.7 Corporate strategies & new business-
The New Businesses Department was created to formulate strategies for new businesses, incubate new business initiatives, pilot the same and on stabilization, handover to the concerned Business Group. Various new businesses like Pension Fund Management, General Insurance, Private Equity, Financial Planning & Advisory Services (FP&AS), Custodial Services, Payment Solutions, Depository Participant Services and On-line trading have been initiated by the department.
3.8 International Banking group
The Bank at the year-end had a network of 92 overseas offices spread over 32 countries covering all time zones. The 92 offices comprised 37 Branches, 5 Sub Offices, 8 Representative Offices, 35 Branches of Subsidiaries, 3 Managed Exchange Companies and 4 Joint Ventures. The asset level of Foreign offices and subsidiaries was US$ 23.73 billion registering a growth of 20% over last year. Foreign Offices earned a net profit of US $ 151 million during the year.
3.9 Information Technology
The Bank has been proactive in responding to the opportunities thrown open by evolving technology and increasing technology penetration. Technology has been used innovatively for achieving financial inclusion and technology driven banking solutions have been implemented to achieve enhanced customer satisfaction. Networking: More than 2000 branches were added to wide area network during the year. Presently all the branches and ATMs of the Bank are networked. The network plays a major role in supporting the Bank’s business applications and is capable of carrying data voice and video in a secure manner. Core Banking: The Bank achieved full Core Banking status on 23.07.2008 when all the branches of the Bank were made functional on CBS.Internet Banking: With enabling of over 2100 branches for internet banking, all the branches of the Bank are now internet banking enabled.ATMs: The Bank, along with its Associate banks have a common ATM network which is the largest in the country.Payment Systems Group: All the branches of the Bank have been enabled for RTGS and NEFT transactions.Mobile Banking: The Bank has launched its mobile banking facility which offers various features like Funds Transfer using NEFT, Enquiry Services (balance enquiry / mini statement), Request Services
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(cheque book request), m-commerce (Mobile Top Up, merchant payments, SBI Life Insurance premium) and bill payment (utility bills, credit cards). Data Warehouse Project: Implementation of Enterprise Data Warehouse is under progress. Information Security: The Bank has a robust IT policy and Information System (IS) Security policy which has been benchmarked against global best practices.
3.10 Business Intelligence department-
The Business Intelligence Department in the Bank constantly assesses upgrades and fine tunes the growing information requirements of various user departments and business units. The information takes care of both decision support as well as statutory requirements. The Data Warehousing Project, designed to be a single source for all data requirements, is also progressing satisfactorily.
3.11 Customer service-
The staffs who displayed understanding of the challenges of achieving excellent customer service which alone will enable the Bank to continue to maintain its leadership position in future, were overwhelmingly of the opinion that the Bank’s vision should focus primarily on customer service.
3.12 Human Resource Department-
Learning & Development:Several key initiatives have been taken by the Bank to enthuse and motivate the employees to perform better so as to achieve the Bank’s growth plans. Personnel Management: The Performance Linked Incentive Scheme of the Bank has been broad-based with an aim to foster team spirit amongst the employees and to motivate them to excel in customer service. This also helped the Bank in exploiting the new emerging business opportunities to achieve the Bank’s growth plans. HRMS Project: For leveraging Technology in employee management area, the Bank has implemented automation of its HR process through SAP-ERPHRMS software. A centralized database of all employees across SBI is now available. Recruitment :This recruitment drive, which is the largest recruitment exercise undertaken in the banking sector, was made to augment the staff strength in tandem with the Bank’s branch expansion drive. This will not only help in reducing the age profile of staff but will also provide an opportunity for greater mobility and marketing thrust across the Bank to achieve its growth plans. Industrial Relations: Excellence in relationship with the members of both the Staff and Officers Federations was achieved by sorting out various industrial relations issues through their consistent support and healthy dialogue/discussions.
3.13 Official language department:
The Bank complied with the statutory requirements relating to the Official Language policy and made several efforts to deliver its products and services to the masses in Hindi and other Indian languages. These include installation of bilingual software in its 11448 Core Banking branches during the year which enabled customers to get their pass books, statements of account and other reports in Hindi. In addition to this, the number of hits on ATMs in Hindi reached 46 lakhs and in other Indian languages, 39 lakhs per month as a result of efforts made by the Bank to provide its services in Hindi and other Indian languages to its customers. 3.14 Banking operation department:
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The Bank has put in place, a Board approved revised policy on Know Your Customer (KYC)/ Anti Money Laundering (AML)/Combating the Financing of Terrorism (CFT) measures in line with the guidelines issued by Reserve Bank of India on the subject. Monitoring of Transactions is done with a view to submit the required reports to Financial Intelligence Unit-India mandated by rules of Prevention of Money Laundering Act, 2002.
3.15 ANALYSIS ABOUT THE MAJOR PROBLEMS IN EACH AND EVERY DEPARTMENT AND OVERALL ORGANIZATION.
1) Its inter departmental coordination is very less.2) Systems breakdown frequently effecting day to day operations and also leading to customers satisfaction.3) Insufficient staff in areas like marketing.4) There is no clear training policy for identifying training needs and training.5) Marketing department has very less focus on sales and business development
4 .SWOT ANALYSIS
.
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4.1 Strength-
1. Good Brand Name because it is related to central government and people can trust the
bank. They give good facilities to customers.
2. Nationwide networking of branches. In every state and in every district there are SB
branches. The total work done by using internet. Online facility is also available in SB.
3. Multiple product & service. It is related to all SB where you get the facility of taking
money in any ATM. It provides online banking also.
4. More number of customers all over the World because everyone trust SB.
5. Internet Banking & recent trends of banking. It provides online banking where you can
transfer money from one account to another account. You can use for shopping purpose
etc.SBH has got adequate ATM’s throughout India.
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6. Good Information security policy.
7 Huge public deposit money and backup from government.
4.2 Weakness-
1. No separate branch for SBH life and SBH mutual Fund. It depends on SBI.
2. Low awareness of the products offered among the people.
3. Comparing to some private banks, SBH has less modernization of infra structure.
4. Since more employees are working, the interference of trade union is yet another constraint.
4.3 Opportunities-
1. Large potential Market due to pickup in economic activity.
2. Introduction of innovative product which will lead to higher growth.
3. Massive marketing and Massive customization
4. Chances for increasing more investment avenues and designing various schemes for the
customers. Thereby, all the people all over India will be a customer one way or other.
4.4 Threats-
1. Huge competition due to private banks and lot of competitors. They provide lot of facilities
comparing to government banks.
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2. Entry of new private sectors due to globalization and privatization.
3. Economic recession prevailing all over the World.
4. Political instability and interference in Administrative affairs.
5.1 FINDINGS-
1. SBH is offering a large diversity of product which are innovative and in line with latest
technology and customer preference. Its contribution towards society in terms of product and
service offered is appreciable.
2. The SBH has a unique brand image in the eyes of investors and depositors. This offers a
platform to expand its market share.
3. The efficiency of the functioning of SBH is highly enhanced by full computerization.
4. The implementation of information security with the global best practices will help the
organization to build a strong customer loyalty.
5.2 CONCLUSION-
Being a huge government sector central bank SBH. in association with parent SBI along with other
subsidiary banks it has got enormous resources at its disposals to give wide range of servies to the 57
customers As for my report on, “ORGANIZATIONAL STUDY AT SBH” is concerned it is really an
enhancing experience for me in so many ways. In fact I can rightfully claim to have achieved my
predetermined objective.
.
5.3 RECOMMENDATION-
1. To increase the profitability of bank they may aim at reducing the cost of its deposits.
2. The investment portfolio of the bank may be enhanced for increasing yield on the assets.
3. Majority of the older employee lacks sufficient soft skill hence they should be trained in order to
increase efficiency of work.
4. There is need of better customer relationship management & awareness program to make the customer
aware about all product and service.
5. There should be minimum documentation and speedy transactions.
6. Need for establishment of better industrial relation in order to deal with formation of trade unions and
achieving higher efficiency of employees.
7. Modernization of infrastructure through benchmarking the global best practices in order to achieve
customer attention and loyalty.
8. Need for consistency and growth in technology in order to keep up position and deal with competition.
9. Quick implementation of enterprise data warehouse.
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Bibliography
Books:
1. L.M. Bhole. Financial Institution and Markets. 4th Ed. Tata McGraw-Hill Publishing
Company Limited, Delhi, 2004, pp3.1-3.4.
Journals:
1. M. Srinivas Narayana.(2009) “A study of social responsibility of commercial banks”,
Finance India, March, No XXIINO1.
Website:
1. Dr. Tracy McPherson (2007) “Workplace SBI Survey Reports: An assessment of
employer Practices and vendor products and services”. accessed on 04/07/2009 at
http://researchandmarkets.com/reports/837818.html
2. “SBI Mutual Fund”. accessed on 09/072009 at
http://businessmapsofindia.com/mutualfunds/firms/sbi.htm.
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