State bank of India
Introduction-
State bank of India (SBI) is the largest bank in India. It is also, measured by the number of branch officers and employees, the second largest bank in the world. The bank traces its ancestry back through the imperial bank of India to the founding in 1806 of the bank of Calcutta, making it is the oldest commercial bank in the Indian Subcontinent. The government of India nationalised to the imperial bank of India in 1955, with the reserve bank of India taking a 60% stake, and renamed it the State bank of India. In 2008, the government took over the stake held by the reserve bank of India.
SBI provides a range of banking product through its vast network in India and overseas, including product aimed at NRIs with an asset base of one $126 billion and its reach, it is a regional bank behemoth. SBI has led emphasis on reducing the huge manpower through golden handshake schemes and computerising its operations.
The State Bank group, with over 16,000 branches, has the largest branch network in India. It has a market share among Indian commercial banks of about 20% in deposits and advances, and SBI accounts for almost 1/5 of the nation’s loans.
State bank of India (SBI) is the largest public sector bank in India. SBI has branches and ATMs all over India, details of which are available at their website. State bank of Hyderabad, State bank of Patiala, State Bank of Saurashtra, State bank of Bikaner and Jaipur, State bank of Indore, State Bank of Mysore and State Bank of Travancore are the seven subsidiary Bank of SBI.
As of March 2006, SBI holding in these banks varies from 74% to 100%, but is likely to decrease in future. SBI has one of the largest network of ATMs in the Asia Pacific region. Many branches of the State bank of India are computerised. In places where the reserve Bank of India, (RBI) the central bank of India does have an office, SBI carries out many of its function. SBI timing is vary according to location, for example the Powai, Mumbai branch of State Bank of India is open between 10.15 a.m. to 2 PM (Monday to Friday).
You can open a Public Provident fund (PPF) account at any state Bank of India branch. PPF accounts and one of the few savings instruments which offer a high tax free interest rate of 8% per year. All deposits made on or before fifth of a month earn interest for the entire month. If you deposit a cheque in your PPF account on the fifth of the month, you will get interest for the month through your account may be debited at a later date. The interest is credited to the account at the end of the accounting year in India.
History :
The roots of the State bank of India rest in the first decade of 19 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 re-organised 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.
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 bank as its subsidiaries. On September, 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 the bank of Cochin in Kerala, which had 120 branches. SBI has acquired as its affiliate, the State bank of Travancore, already had an extensive network in Kerala.
Objectives of State bank of India
The symbol of the State bank of India is a circle and a small man at the centre of the circle (and not a key hole). A circle depicts perfection and the common man being the centre of the bank’s business.
Slogans:
“Pure banking nothing else” also includes: “With you all the way” “a bank of common man” and “banker to every Indian”.
SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians NRIs. The State Bank group, with over 18,324 branches, has the largest banking branch network in India. SBI has 14 local head offices is situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North east circle) Bhubaneswar, Hyderabad, Chennai, Trivandrum, Bangalore, Mumbai, Bhopal and Ahmedabad and 57 zonal officer that are located at important cities throughout the country. It also has 157 branches overseas.
SBI is a regional banking behemoths and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans.
The State bank of India is the 29th most reputed company in the world according to Forbes. Also, SBI is the only bank featured in the coveted “top 10 brands of India” list in an annual survey conducted by Brand finance and the economic Times in 2010.
Functions of the state Bank of India
The functions of SBI can be grouped under two categories – The central banking functions and ordinary banking functions.
A. Central banking functions :
The SBI act as agent of the RBI and the places where the RBI has no branch. Accordingly, it was Renders the following functions :
- Banker to the government,
- Banker to banks in a limited way.
- Maintenance of currency chest.
- Acts as clearing house.
- Lenders promotional functions.
1. Banker to the government
The SBI functions as the banker to the Central and the state governments. it receives and pays money on behalf of the governments. Especially it renders the following function as directed by RBI in this regard.
- Collection of charges on behalf of the government example collection of tax and other payments.
- Grants loans and advances to the governments.
- Provides advises to the government regarding economic conditions, etc.
2. Bankers bank
Commercial banks have accounts with SBI. when the banks face financial shortage, the SBI provides assistance to them as it is considered a big brother in the banking industry. It discounts the bills of the other commercial banks. Due to functions on this line the SBI is considered in a limited sense as a banker’s bank.
3. Currency chest
The RBI maintains currency chests at its own offices. But RBI offices are situated only in big cities. SBI, buys its wide network of branches operate in urban as well as rural areas. RBI therefore, in such places keeps money at currency chests with SBI.
Whenever needs arise, the currency is withdrawn from these chests under proper accounting and reporting to RBI. Presently RBI entrust currency chest to other public sector banks and a few private-sector banks also.
4. Acts as clearing house
In all the places, where RBI has no branch, the SBI renders the functions of clearing house. Thus, it facilitates the inter bank settlements. Since, all the banks in such places have accounts with SBI; it is easy for the SBI, to act as clearing house.
5. Renders promotional functions
State Bank of India also renders various promotional functions. It provides various facilities to the following priority sectors:
- Agriculture.
- Small scale industries.
- Weaker sections of the society.
- Co-operative sectors.
- Small traders
- Unemployed youth.
- Others
In this respect SBI is like any other commercial bank.
B. General banking function:
Besides the above specialised functions, the SBI renders the following functions under section 33 of the act :
- Accepting deposits from the public under current, savings, fixed and recurring deposit accounts.
- Advancing and lending money and opening cash credits upon the security of stocks, securities, etc.
- Drawing, accepting, discounting, buying and selling of bills of exchange and other negotiable instruments.
- Investing funds, in specified kinds of securities.
- Advancing and lending money to Court of wards with the previous approval of the state government.
- Issuing and circulating letters of credit.
- Offering remittance facilities such as, demand draft, mail transfers telegraphic transfers, etc
- Acting as administrator, executor, trustee or otherwise.
- Selling and realising the movable or immovable properties that come into the banks in satisfaction of claims.
- Transacting pecuniary agency business on commission stocks.
- Underwriting of the issue of authorised shares debentures, and other securities. (This function is done through subsidiaries now)
- Buying and selling of gold and silver.
- It operates Public Provident fund accounts for the general public.
- It operates non-resident external accounts and foreign currency accounts.
- Providing factoring services (through subsidiaries)
- Provides shipping finance.
- Promote exports through export credit. Provides project export finance.
- Provides merchant banking facilities.
- Provides specialised services like “global link services”.
- Promotes housing finance through “SBI home finance Ltd.”
- Offers community services banking. It provides grants to many socially relevant research project undertaken by various universities and academic institutions in the country.
- Provides leasing finance and project finance facilities.
- Participates in lead bank scheme.
- That State Bank may with the sanction of the Central government, enter into negotiation for acquiring the business of the any other banking institutions.