STATE BANK OF INDIA
ANNUAL REPORT 2010-2011
DIRECTOR'S REPORT
To
The Members
Management Discussion And Analysis:
Economic Backdrop and Banking Environment:
The Indian economy is back on track and has recovered smartly from the
aftermath of the global crisis of 2007-09. GDP grew by 8.5% in FY'11 from
6.8% in FY'09 and 8.0% in FY'10. Strong recovery in the agriculture sector,
which rose by 6.6% in FY'11 against negligible growth (0.4%) in FY'10, has
been the key underlying driver of higher GDP growth.
Industrial growth has been generally satisfactory but volatile. During
2010-11, the Index of Industrial Production (IIP) grew by 7.8% against
10.5% in the previous year though growth has ranged from 16.6% in April
2010 to 2.6% in December 2010. The growth rate of IIP remained above 10% in
four out of twelve months, below 5% in five months, and around 7% in three
months. However, consumer durables (20.9%), intermediate goods (8.8%) and
capital goods (9.3%) recorded higher growth than overall IIP growth in
FY'11, taking manufacturing sector growth to 8.3% in FY'11 against 8.8% in
FY'10. The services sector, accounting for around three-fifth of GDP, grew
by 9.2% in FY'11 against 9.7% in FY'10 largely due to moderation in
Community, Social and Personal Services', which rose by 7.0% in FY'11
against 11.8% in FY'10. Nevertheless, Trade, Hotels, Transport &
Communication' and Financing, Insurance, Real Estate & Business Services'
registered higher growth of 10.3% (9.7% in FY'10) and 9.9% (9.2% in FY'10)
respectively in FY'11.
With pickup in the growth momentum in developed countries, merchandise
exports rose smartly by 37.6% in FY'11, while imports rose by 21.6%,
shrinking the trade deficit to US $104.8 bn, slightly lower than US $109.6
bn in FY'10. The forex market experienced orderly movements and saw the
Rupee move up from average Rs. 47.46 per US dollar in 2009-10 to Rs.45.57
per US dollar during FY'11. Revival in the domestic economy was reflected
in rise in net FII inflows of US $29.4 bn in FY'11 against US $29.0 bn in
FY'10. During the year, India's foreign exchange reserves rose by US $26.4
bn to US $305.5 bn.
While the growth outlook remained robust, the year saw inflation emerge as
a major concern driven by high food, fuel and commodity prices. After
remaining in double digits from April to June 2010, headline WPI inflation
came down to 8.9% in August 2010 and softened further to 8.2% in November
2010 but the trend reversed in December 2010 and inflation rose to 9.4% led
by sudden spurt in prices of primary food articles and fuels. By end-March
2011, yoy WPI inflation stood at 9.02%, lower than 10.36% in March 2010.
Inflation concerns prompted RBI's tight monetary policy stance; between 20
April 2010 and 17 March 2011, RBI increased the Repo and Reverse Repo rate
seven times. During the year, the RepoRate was raised by 175 bps from 5.0%
to 6.75%, Reverse Repo rate by 225 bps from 3.50% to 5.75% and the Cash
Reserve Ratio was hiked by 25 bps from 5.75% to 6.0%. Monetary tightening
and sharp credit growth beginning from the busy season in October 2010 saw
liquidity conditions in the system remain tight. To ease pressure on
liquidity and ensure adequate credit availability for all sectors, RBI
introduced several measures including opening second LAF window, open
market operations including buyback of government securities worth
Rs.48,000 crores and cut in SLR, initially temporary cut by 200 bps from
25% to 23% followed by a permanent reduction of 100 bps to 24% in December
2010.
All these measures supported bank lending which is reflected in the 21.5%
rise in ASCB credit despite muted growth of 15.9% in deposits. Reflecting
policy transmission, interest rates on both deposits and credit hardened
during the year. While PLR of major banks rose by 200 bps from 11.0-12.0%
in FY'10 to 13.0-14.0% in FY'11, rates for 1-3 year deposits rose from 6.0-
7.50% to 7.75-9.50% in the same period. Another important development
during the year was introduction of the Base Rate system from July 2010,
bringing greater transparency in interest rates. Initially, base rate of
major banks was in the range of 7.5-8.25% but following monetary tightening
by RBI, this rose to 8.25-9.50% by March 2011.
Latest projections by IMF show that the global economy has grown by 5% in
2010, one of the highest in recent years. However, while growth in emerging
market economies remains strong and growth in the US and the Euro area is
gaining momentum, the sharp increase in oil prices as a result of the
turmoil in the Middle East and North Africa is adding uncertainty to the
pace of global recovery. Further, coming on top of already elevated food
and other commodity prices, the spike in oil prices has engendered
inflation concerns. With growth worries fading, the focus has shifted to
inflation and policy tightening. So going forward, countries will aim to
achieve higher growth without compromising on price and financial stability
thus balancing inflation expectations and maintaining growth momentum.
Financial Performance:
Profit:
The Operating Profit of the Bank for 2010-11 stood at Rs. 25,335.57 crores
as compared to Rs. 18,320.91 crores in 2009-10 registering an excellent
growth of 38.29%. The Bank has posted a Net Profit of Rs. 8,264.52 crores
for 2010-11 as compared to Rs. 9,166.05 crores in 2009-10 registering a
decline of 9.84%.
While Net Interest Income recorded a growth of 37.41%, the Other Income
increased by 5.72%, Operating Expenses increased by 13.27% attributable to
higher staff cost and other expenses.
Dividend:
The Bank has maintained dividend @ Rs. 30.00 per share (300%) as paid in
the last year.
Net Interest Income:
The Net Interest Income of the Bank registered a growth of 37.41% from
Rs.23,671.44 crores in 2009-10 to Rs. 32,526.41 crores in 2010-11. This was
due to growth in interest income on advances and investments.
The gross interest income from global operations rose from Rs. 70,993.92
crores to Rs. 81,394.36 crores during the year registering a growth of
14.65%. This was mainly due to higher interest income on advances and
investments.
Interest income on advances in India registered an increase from
Rs.47,633.47 crores in 2009-10 to Rs. 56,960.97 crores in 2010-11 due to
higher volumes.
The average yield on advances in India decreased from 9.66% in 2009-10 to
9.56% in 2010-11. Interest income on advances at foreign offices has grown
moderately by 0.53%.
Income from resources deployed in Treasury operations in India increased by
3.67% mainly due to higher average resources deployed and increase in
average yield. The average yield, which was 6.52% in 2009-10, has increased
to 7.02% in 2010-11.
Total interest expenses of global operations increased from Rs. 47,322.48
crores in 2009-10 to Rs. 48,867.96 crores in 2010-11. Interest expenses on
deposits in India during 2010-11 recorded a decrease of 0.21% compared to
the previous year, whereas the average level of deposits in India grew by
9.99%. The average cost of deposits has declined from 5.80% in 2009-10 to
5.26% in 2010-11.
Non-Interest Income:
Non-interest income stood at Rs. 15,824.59 crores in 2010-11 as against
Rs.14,968.15 crores in 2009-10 registering a growth of 5.72%.
During the year, the Bank received an income of Rs. 827.73 crores
(Rs.573.48 crores in the previous year) by way of dividends from Associate
Banks / subsidiaries and joint ventures in India and abroad.
Operating Expenses:
There was an increase of 13.53% in the Staff Cost from Rs. 12,754.65 crores
in 2009-10 to Rs. 14,480.17 crores in 2010-11 attributable to higher
gratuity and pension major banks rose by 200 bps from 11.0-12.0% in FY'10
to 13.0-14.0% in FY'11, rates for 1-3 year deposits rose from 6.0-7.50% to
7.75-9.50% in the same period. Another important development during the
year was introduction of the Base Rate system from July 2010, bringing
greater transparency in interest rates. Initially, base rate of major banks
was in the range of 7.5-8.25% but following monetary tightening by RBI,
this rose to 8.25-9.50% by March 2011.
Latest projections by IMF show that the global economy has grown by 5% in
2010, one of the highest in recent years. However, while growth in emerging
market economies remains strong and growth in the US and the Euro area is
gaining momentum, the sharp increase in oil prices as a result of the
turmoil in the Middle East and North Africa is adding uncertainty to the
pace of global recovery. Further, coming ontop of already elevated food and
other commodity prices, the spike in oil prices has engendered inflation
concerns. With growth worries fading, the focus has shifted to inflation
and policy tightening. So going forward, countries will aim to achieve
higher growth without compromising on price and financial stability thus
balancing inflation expectations and maintaining growth momentum.
Financial Performance:
Profit:
The Operating Profit of the Bank for 2010-11 stood at Rs. 25,335.57 crores
as compared to Rs. 18,320.91 crores in 2009-10 registering an excellent
growth of 38.29%. The Bank has posted a Net Profit of Rs. 8,264.52 crores
for 2010-11 as compared to Rs. 9,166.05 crores in 2009-10 registering a
decline of 9.84%.
While Net Interest Income recorded a growth of 37.41%, the Other Income
increased by 5.72%, Operating Expenses increased by 13.27% attributable to
higher staff cost and other expenses.
Dividend:
The Bank has maintained dividend @ Rs. 30.00 per share (300%) as paid in
the last year.
Net Interest Income:
The Net Interest Income of the Bank registered a growth of 37.41% from
Rs.23,671.44 crores in 2009-10 to Rs. 32,526.41 crores in 2010-11. This was
due to growth in interest income on advances and investments.
The gross interest income from global operations rose from Rs. 70,993.92
crores to Rs. 81,394.36 crores during the year registering a growth of
14.65%. This was mainly due to higher interest income on advances and
investments.
Interest income on advances in India registered an increase from
Rs.47,633.47 crores in 2009-10 to Rs. 56,960.97 crores in 2010-11 due to
higher volumes.
The average yield on advances in India decreased from 9.66% in 2009-10 to
9.56% in 2010-11. Interest income on advances at foreign offices has grown
moderately by 0.53%.
Income from resources deployed in Treasury operations in India increased by
3.67% mainly due to higher average resources deployed and increase in
average yield. The average yield, which was 6.52% in 2009-10, has increased
to 7.02% in 2010-11.
Total interest expenses of global operations increased from Rs. 47,322.48
crores in 2009-10 to Rs. 48,867.96 crores in 2010-11. Interest expenses on
deposits in India during 2010-11 recorded a decrease of 0.21% compared to
the previous year, whereas the average level of deposits in India grew by
9.99%. The average cost of deposits has declined from 5.80% in 2009-10 to
5.26% in 2010-11.
Non-Interest Income:
Non-interest income stood at Rs. 15,824.59 crores in 2010-11 as against
Rs.14,968.15 crores in 2009-10 registering a growth of 5.72%.
During the year, the Bank received an income of Rs. 827.73 crores
(Rs.573.48 crores in the previous year) by way of dividends from Associate
Banks / subsidiaries and joint ventures in India and abroad.
Operating Expenses:
There was an increase of 13.53% in the Staff Cost from Rs. 12,754.65 crores
in 2009-10 to Rs. 14,480.17 crores in 2010-11 attributable to higher
gratuity and pension provisioning and increased staff strength. Staff Cost
included an amount of Rs. 2,473.00 crores towards additional pension
provision and Rs. 1,565.00 crores towards additional contribution to
Gratuity Fund as compared to Rs. 1,997.64 crores and Rs. 46.41 crores
respectively in the previous year. The additional pension cost in respect
of the liabilities of the earlier years amounting to Rs. 7,927.41 crores
have been charged to Reserves Account' in accordance with RBI special
dispensation.
Other Operating Expenses have also registered an increase of 12.84% mainly
due to increase in expenses on rent, taxes and lighting, advertisement &
publicity, depreciation on bank's properties, law charges, postage,
telegrams and telephones, repairs & maintenance to the Bank's properties,
insurance and miscellaneous expenditure.
Operating Expenses, comprising both staff cost and other operating
expenses, have registered an increase of 13.27% over the previous year.
Provisions and Contingencies:
Major amounts of provisions made in 2010-11 were as under:
* Rs. 646.75 crores towards provision for depreciation on investments,
excluding amortization of premium on Held to Maturity' category (as
against Rs. 968.59 crores towards write-back for depreciation on
investments in 2009-10).
* Rs. 5,709.54 crores towards Provision for Tax, excluding deferred tax
reversal of Rs. 976.82 crores (as against Rs. 6,166.63 crores in 2009-10
excluding deferred tax credit of Rs. 1,407.75 crores).
* Rs. 8,792.09 crores (net of write-back) for nonperforming assets (as
against Rs. 5,147.85 crores in 2009-10).
* Rs. 976.60 crores towards Standard Assets (as against Rs. 80.06 crores in
2009-10). Including the current year's provision, the total provision held
on Standard Assets (domestic offices) amounts to Rs. 3,336.08 crores.
Reserves and Surplus:
* An amount of Rs. 2,479.36 crores (as against Rs. 6,381.09 crores in 2009-
10) was transferred to Statutory Reserves.
* An amount of Rs. 9.61 crores (as against Rs. 114.05 crores in 2009-10)
was transferred to Capital Reserve Fund.
* An amount of Rs. 2,729.87 crores (as against Rs. 529.51 crores in 2009-
10) was transferred to Other Reserve Funds.
* An amount of Rs. 7,927.41 crores has been transferred from Statutory
Reserves on account of additional pension cost in respect of the
liabilities of the earlier years in accordance with RBI special
dispensation.
Table : Key Performance Indicators:
Indicators SBI SBI Group
2010-11 2009-10 2010-11 2009-10
Return on Average
Assets (%) 0.71 0.88 0.70 0.88
Return on Equity (%) 12.84 14.04 12.92 14.24
Expenses to Income (%)
(Operating Expenses to
Total Net Income) 47.60 52.59 58.32 63.10
Basic Earnings Per
Share (Rs.) 130.16 144.37 168.28 184.82
Diluted Earnings Per
Share (Rs.) 130.16 144.37 168.28 184.82
Capital Adequacy
Ratio (%) (Basel-I) 10.69 12.00 11.02 11.89
Tier I 6.93 8.46 7.20 8.08
Tier II 3.76 3.54 3.82 3.81
Capital Adequacy Ratio
(%) (Basel-II) 11.98 13.39 12.26 13.49
Tier I 7.77 9.45 8.02 9.28
Tier II 4.21 3.94 4.24 4.21
Net NPAs to Net
Advances (%) 1.63 1.72 1.56 1.57
Assets:
The total assets of the Bank increased by 16.17% from Rs. 10,53,413.73
crores at the end of March 2010 to Rs. 12,23,736.20 crores as at end March
2011. During the period, the loan portfolio increased by 19.75% from
Rs.6,31,914.15 crores to Rs. 7,56,719.45 crores. Investments decreased
marginally by 0.06% from Rs. 2,95,785.20 crores to Rs. 2,95,600.57 crores
as at the end of March 2011. A major portion of the investment was in the
domestic market in government and other approved securities. The Bank's
market share in domestic advances was 16.40% as of March 2011.
Liabilities:
The Bank's aggregate liabilities (excluding capital and reserves) rose by
17.35% from Rs. 9,87,464.53 crores on 31st March 2010 to Rs. 11,58,750.16
crores on 31st March 2011. The increase in liabilities was mainly
contributed by increase in deposits and borrowings. The Global deposits
stood at Rs. 9,33,932.81 crores as on 31st March 2011 against
Rs.8,04,116.23 crores as on 31st March 2010, representing an increase of
16.14% over the level on 31st March 2010. The Bank's market share in
deposits was 16.40% as of March 2011.
Performance Highlights:
Core Operations:
A. Global Markets Operations
B. Corporate Banking Group
C. Mid Corporate Group
D. National Banking Group
E. Rural Business Group
F. Cross Selling
G. Corporate Strategies & New Business
H. International Banking Group
I. Asset Quality
J. Associates & Subsidiaries
A. GLOBAL MARKETS OPERATIONS:
Global Markets Department at the Corporate Centre handles the Bank's
Domestic Treasury Operations across all time zones. It consists of seven
divisions viz : Interest Rate Market desk, Equity & Mutual Fund desk, Forex
treasury, Financial Engineering & New Products desk, Alternate Assets desk,
Treasury Marketing Group and Portfolio Management Service section.
During the year, the Bank earned Rs. 18,799 crores by way of
Interest/Discount on investments and made Rs. 1,422 crores of profit on
sale of Investments and Forex/Gold Trading income.
B. CORPORATE BANKING GROUP:
The Bank's Corporate Banking Group consists of four Strategic Business
Units, as detailed below:
B.1. Corporate Accounts Group (CAG), has six branches at the following
centers; Mumbai, New Delhi, Chennai, Kolkata, Ahmedabad and Hyderabad.
* CAG's advances portfolio of Rs. 1,08,774 crores is 31% of the C&I (Non-
food) credit of the Bank and constitutes 16% of the total domestic credit
portfolio of the Bank.
Table : CAG - YoY Highlights:
(Rs. in Crs)
Particulars As on As on Growth
31.03.2010 31.03.2011 %
Advances 88,144 1,08,774 23
FOREX Turnover 6,76,286 7,94,844 18
Fee Income 1,659 1,816 10
Operating Profit 7,337 9,808 34
Business per Employee 156 168 8
Avg. Interest Spread 4.04 5.41 34
NPA/Total Advances (%) 0.18 0.08 -56
* CAG's forex business constituted 57% of the total domestic forex turnover
of the Bank.
* Account Planning initiative has resulted in increased focus on fee-based
services. Income from LCs increased from Rs. 271 crores to Rs. 359 crores.
Income from BGs increased from Rs. 285 crores to Rs. 359 crores.
* Syndication and Underwriting Business improved contributing to a growth
in Fee Income in this segment from Rs. 295 crores to Rs. 458 crores (55%).
Transaction Banking Unit:
Transaction Banking Unit, with special focus on Cash Management Product,
Trade Finance and Channel (Dealer/Vendor) Finance, which started working in
a full-fledged manner during the year 2009-10, expanded its activity during
2010-11.
(1) Cash Management Product:
Cash Management Product (CMP) with its brand name SBIFAST extended its
reach for cheque/cash collection to 1020 branches at 683 centres across the
country, apart from electronic payment/collection from branches of the
Bank. CMP's Dividend Warrant business nearly doubled during the course of
the year. While Cash pick-up facility has stabilized, the Bank started
offering Host-to-Host connectivity to clients to enable them to track
online their collections/payments and get customized MIS without any human
intervention.
(2) Trade Finance:
The Bank has launched a more customized front-end tool called e-trade which
will enable clients to lodge their Letter of Credit and Bank Guarantee
requirements online.
(3) Supply Chain Finance:
e-VFS (Electronic Vendor Financing Scheme):
This scheme, which is fully on electronic platform, provides automated
payment and settlement of transactions as also real time MIS to both
Industrial Majors and vendors.
e-DFS (Electronic Dealer Financing Scheme):
Under the e-DFS scheme, approved dealers of Industry Majors (IM) are
financed for their purchases from IMs, again on a web-based electronic
platform.
B.2. Project Finance & Leasing SBU:
The Project finance-SBU focuses on funding projects in infrastructure
sectors like power, telecom, roads, ports, airports, logistics and other
non-infrastructure projects with certain threshhold on minimum project
cost. During the year ended March 2011, the focus was on syndication and
underwriting of project loans.
As a whole, Project Finance-SBU participated in funding of projects having
a total cost outlay of Rs. 3,33,054 crores (Rs. 3,00,016 crores)* and
involving total debt requirement of Rs. 2,36,607 crores (Rs. 1,84,728
crores)* during the year. Project Finance-SBU accorded sanctions of
Rs.59,209 crores (Rs. 41,048 crores)*, while it took up syndication of debt
of Rs. 73,082 crores (Rs. 69,901 crores)*, with other banks during this
period.
* (Figures in brackets represent previous FY numbers for the corresponding
period.)
B.3. Stressed Assets Management Group (SAMG):
The performance of SAMG for the period 2010-11 is given below:
Table:
(Rs. in Crs)
1. Cash Recovery in NPA 919
2. Upgradations in Standard Assets 141
3. Write - Offs 1,787
4. Gross reduction in NPAs (1+2+3) 2,847
5. Recovery in written off accounts 218
* 106 Stressed Assets Resolution Branches were established across the
country for focussed resolution of NPAs with outstanding upto Rs. 1 crore
in SME and Personal segments.
B.4. Financial Institutions Business Unit (FIBU):
FIBU was created in the year 2009 under Corporate Banking Group to tap the
potential business from Financial Institutions, which include Banks,
Brokerage Firms, Exchanges, Mutual Funds, NBFCs and Insurance Companies.
FIBU is also targeting a larger share in the capital market related
business. Capital Market Branch (CMB) at Mumbai under FIBU is a specialized
branch catering to this segment and is also a nodal branch for ASBA and
Escrow Collection/Refund Banker. It has handled large number of
IPO/FPO/NFO/Bond Issues including Coal India, MOIL, Power Grid and Shipping
Corporation of India during the year. CMB is a settlement Bank for 14 major
Exchanges and CCIL and is well equipped to meet the Settlement Banking and
transaction banking requirements of the market participants and
intermediaries.
C. MID-CORPORATE GROUP (MCG):
Highlights:
* MCG Level of Advances (Non-Food) stood at Rs. 1,62,031 crores (Y-o-Y
Growth 21.15%).
* Operating Profit Rs. 15,355 crores (Y-o-Y Growth 34.60%).
* Other Income Rs. 2,369 crores (Y-o-Y Growth 35.44%).
* Interest income Rs. 14,275 crores (Y-o-Y growth 30.84%).
* 587 New Connections sanctioned Credit Limits (Fund based) aggregating to
Rs. 20,849 crores upto March 2011.
* Segmental Deposits Level Rs. 27,408 crores (Y-o-Y Growth 48.14%).
* Average Yield on Advances is 9.88%.
* Average Interest Spread is 4.58 % up by 21 bps from March 2010.
* Total number of MCG branches- 64 (up from 56 during the FY 2009-10).
Initiatives taken:
* New Mid Corporate Regional Office has been opened at Indore for better
focus on MCG customers' needs and business growth in Madhya Pradesh.
Gold Banking:
* The number of branches authorized for retail sale of Gold Coins has
increased from 1,122 in March 2010 to 1,187 as on 31.03.2011. In the year
2010-11, retail sale of Gold coins was at 2,610 Kgs registering YoY growth
of 130%.
* The Gold Deposit Scheme, which aims at mobilization of idle Gold from
domestic households, temples and trusts, is operational at 54 branches. The
Bank has mobilized 3,420 Kgs of gold under this scheme in financial year
2010-11.
* During the year, the Bank has sold 60.306 MTs of gold under Sale of Gold
(Wholesale) scheme registering a growth of 77% over previous year.
* The Bank's Metal Gold Loan portfolio has increased by 41% with
outstanding of 7,195 Kgs as on 31.03.2011 (approx. Rs. 1,467 crores).
* Sale of Gold coins through branches of SBM and SBT under tie-up
arrangement, a new initiative during the year 2010-11.
D. NATIONAL BANKING GROUP (NBG):
National Banking Group of the Bank comprising of Metro & Urban branches of
the 14 Circles of the Bank has three Strategic Business Units, SMEBU, PBBU
and Government Business Unit (GBU). NBG share was 57.96% of the Bank's
domestic deposits and 31.89% of the Bank's domestic advances as on 31st
March 2011.
576 new branches were opened during the financial year 2010-11 besides
merger of 470 branches of erstwhile State Bank of Indore. As at the end of
March 2011, the Bank had 13,542 branches and 25,005 Group ATMs.
Table : NBG - Highlights:
(Rs. in Crs)
As on 31.03.2010 31.03.2011 YoY Growth
Level Level Absolute (%)
Deposits (excl.
Inter-bank) 4,24,228 4,90,728 66,500 15.68
Advances (excl.
Food & Inter-Bank) 1,75,043 2,07,588 32,545 18.59
D.1 Personal Banking Business Unit (PBBU):
(PBBU figures for NBG + RBG):
Table (Rs. in Crs)
Particulars 31.03.2010 31.03.2011 Growth
(%)
Deposits 4,24,734 5,05,019 18.90%
Advances 1,34,849 1,64,576 22.04%
CASA 2,07,113 2,53,758 22.52%
PBBU had a share of 60.64% of the Aggregate Deposits and 24.78% of the
Aggregate Advances of the Bank as on 31st March 2011.
PBBU opened 196 lac new Savings Bank accounts during the year ended 31st
March 2011.
The CASA Ratio as on 31.03.2011 has gone up to 50.25% from 48.76% as on
31st March 2010 i.e. an increase of 149 basis points.
The Bank has been designated as the Point of Presence (PoP) for conducting
business under the New Pension System (an initiative of the Government of
India) and 3,800 branches across all Circles have been registered for
conducting business under the New Pension System. Amongst all Banks acting
as Points of Presence, SBI is at the 1st position in terms of number of
branches as well as in terms of number of Tier I registrations.
The Bank is Self Certified Syndicate Member for ASBA (Application Supported
by Blocked Amount) as per SEBI guidelines, which is being offered through
1,061 branches in India.
Corporate & Institutional Tie-Ups:
After designing a special Defence Salary Package (DSP) and successfully
acquiring Salary Accounts of 13,35,000 personnel of Army, Navy and Air
Force, other special Salary Packages were designed for Central Para
Military Forces viz. BSF, CISF, CRPF, NSG, ITBP, Assam Rifles and Indian
Coast Guard. A Salary Package has also been offered to the 14 lac employees
of Indian Railways, while special packages have also been rolled out for
employees of State Governments and Union territories as well as employees
of State Police and Central Police Organisations.
The various Salary packages together have resulted in taking the total
salary account Customer base to 46,07,000, comprising of 13,35,000 accounts
under DSP and 32,72,000 accounts under Corporate Salary Package (CSP).
'Defence Salary Package' was awarded Best Acquisition Campaign by Master
Card Hall of Fame, Marketing Awards, 2010 at Hong Kong.
Home Loans:
SBI Home Loan has maintained its position as India's 'Most Preferred Home
Loan' brand in CNBC-Awaaz consumer awards continuously for five years since
2006. SBI is also the recipient of the 'My FM Stars of the Industry Award'
for Excellence in Home Loan Banking for the year 2010 and the prestigious
CNBC Awaaz award for the year 2010 for Outstanding contribution to the
real estate sector through growth of retail home loans'. Home Loans play a
pivotal role in the Bank's retail business strategy. SBI Home Loans
registered a growth of Rs. 15,576 crores (21.88%) up to 31st March 2011 and
continued to be the No.1 Home Loan player - in terms of the size of the
Individual Home Loan portfolio - amongst all Scheduled Commercial Banks.
Also, a majority of Bank's Home Loan borrowers are salaried employees and
first time Home Loan buyers, which shows that the Bank's Home Loan products
have been successful in satisfying genuine housing need and not mere
investment demand.
The Bank has also started an initiative to tap the growing affordable
housing segment. A pilot cell in this regard has been launched at Vasai
Road, Mumbai. In order to tap the youth segment, a new product SBI Yuva was
launched to help young persons below the age of 35, to achieve their
aspirations. Similarly, SBI-PAL, a pre-approved loan was introduced as a
customer friendly measure to enable customers in large cities to firm up
their budget before finalising the choice of home. In addition, the concept
of Builder focussed Lean Work Cells has been introduced to reduce the
turnaround time.
Real Estate Habitat & Housing Development Unit has been created for
focussed attention on the housing segment.
Education Loans:
With an increase in the number of students opting for higher studies in
India and abroad, SBI Education Loan has grown at 23.26% YoY as on March
2011. SBI has extended educational loans to a total extent of Rs. 10,980
crores up to 31st March 2011. SBI is the market leader in Education Loans
with a market share of approx 25% amongst PSU banks.
In order to provide financial assistance to fulfill aspirations of greater
number of students opting for higher education, the number of institutes
under SBI Scholar Loan scheme was increased to 109 for taking admissions in
the elite institutes like IIMs/IITs/NITs and other reputed institutes at
concessional rates and terms.
Personal Loans:
The cap on maximum loan amount was raised from Rs. 10.00 lac to Rs. 15.00
lac and repayment period was also increased from 48 EMIs to 60 EMIs in our
Xpress Credit Scheme. The cap on maximum loan amount for Loans against
Pledge of Gold Ornaments was raised from Rs. 3.00 lac to Rs. 10.00 lac.
With the launch of a new term deposit product Floating Rate Term Deposit',
a new loan scheme against the same was developed in October 2010.
With an increase in demand for loans against Gold Exchange Traded Fund, a
new product - Loans against SBI Gold Exchange Traded Fund' was launched in
March 2011.
Auto Loans:
SBI Auto Loans maintains its retail market leadership by increasing the
market share from 16.80% as on 31st March 2010 to 18.20% as on 31st March
2011. The Bank continues to be number one in financing cars to individuals
across the country and number one financer of Maruti cars for three
consecutive years in a row. SBI has increased its presence in the market
with higher penetration in financing buyers of Chevrolet, Hyundai, Tata
Motors, Honda Siel and Toyota. During the year, 117 Mercedez Cars have been
financed in Aurangabad city of Maharashtra under a separate scheme for
purchase of Mercedez cars which was launched during the year. A new
campaign 'Car-A-Branch' was launched to bring all the branches doing
personal segment business under the gamut of car financing. To improve the
Turn Around Time (TAT), branches were authorized to process, sanction and
disburse car loans at select centres. A new scheme 'Certified Pre-owned Car
Loan' scheme was launched during the year to finance certified used cars.
During the year, joint promotion activities with Maruti, Hyundai, Ford,
Mahindra & Mahindra, Mercedez, Toyota and Tata Motors were taken up.
Delivery Systems:
i. Loan Origination Software (LOS):
Loan Origination Software (LOS) has been introduced for Personal Segment
loans. This is a web enabled online software for processing and sanctioning
of Auto Loan, Home Loan, Education Loan and Personal Loan proposals and
helps in risk mitigation through de-dupe functionality, which would avoid
duplication as it is capable of identifying similar customers' details in
the LOS database of existing customers, automatic CIBIL checking, and such
other features.
ii. Retail Scoring Model:
Development of Retail Scoring Models for PBBU Products has been completed.
Scoring Models have also been launched throughout the Bank especially
through Loan Originating Software (LOS).
iii. Improvements in RACPC:
To improve delivery, Lean Work Cells have been launched in RACPCs. This
would focus on closer co-ordination with builders and speeding up the
delivery process for high value proposals.
Initiatives for NPA Management:
Risk Scoring Model has been introduced in the Personal Segment portfolio
for standardized and objective credit assessment.
A strong collection mechanism in place is the vital link towards asset
quality. Account Tracking Centres have also been set up at all Local Head
Offices for centralised follow up of borrowers in the NPA category. New
Code has been set up at the account level for identifying borrowers right
from the 7th day of default.
Campaign Operation Sampark has been launched as a part of a special drive
for updating contact details of all borrowers. Delinquent accounts have
also been mapped to individual staff for focused monitoring, and NPA
Dashboard has been launched as a data tool for real time monitoring of
NPAs.
D2. SME Business Unit (SMEBU):
During the financial year 2010-11, the advances under SME business unit has
registered year-on-year growth of 25.95% against a growth of 15.56% in the
previous year. As regards SME deposits, the Bank's prudent policy to shed
high cost bulk deposits continued this year also. The cost of deposit has
come down from 5.80% to 5.30% as on 31.03.2011 resulting in better spread.
(Rs. in Crs)
Particulars As on As on Growth
31.03.2010 31.03.2011 %
Advances 1,10,175 1,38,760 (*) 25.95 (*)
(*) Including Rs. 3,456 crores migrated from e-SBIN Five verticals namely,
Manufacturing, Trade & Services, Liability & Transaction Products, Supply
Chain Finance and Operations are functional under the SME Business Unit.
These verticals are responsible for implementation of multiple strategies
to maintain the flagship position in SME business.
Initiatives taken by the Business unit:
* 579 SME intensive branches across the country have been kept under
special focus to develop dedicated platform for SME lending. Relationship
Managers and SME clusters have been mapped to these branches for
accelerated growth.
* Cluster financing initiative through dedicated Cluster Hubs at eight LHOs
has been rolled out to implement action plans for improving our stake in
business clusters identified by the Circles.
* For inclusive growth in Micro and Small Enterprises sector, special
scheme viz. SME-CFL has been floated to extend collateral free loans under
the guarantee cover of CGTMSE as a measure of hassle free lending to Micro
and Small enterprises. During the FY 2010-11, the Bank has made collateral
free lending in 50911 accounts with credit exposure of Rs. 2,184 crores
under the guarantee scheme of CGTMSE.
* Under Project Uptech, two new projects at Ranchi and Trichy are under
implementation for refractories and fabrication/boiler component clusters
respectively.
* To help technically and professionally qualified entrepreneurs, a new
scheme called SBI SMILE was introduced on a pilot scale, where the margin
requirements are less and interest-free loans component as equity support
is provided.
* Supply Chain Finance offers two schemes Electronic Vendor Financing
Scheme (e-VFS) and Electronic Dealer Financing Scheme (e-DFS). Industry
Majors of Auto, Oil, Steel, Cement, Fertilizers, and Textiles sectors are
availing e-VFS and e-DFS.
* As a result of special thrust on trade and services sector, advances to
this sector have increased from Rs. 23,957 crores to Rs. 91,277 crores in
the last five years.
* Special drive was launched to provide loans to traders against the
warehouse receipts under tie-up with National Bulk Handling Corporation
(NBHC) / National Collateral Management Services Ltd. (NCNSL).
* Construction activity being one of the key drivers for infrastructure and
real estate, the Bank has entered into tie-ups with Industry Majors for
construction equipment finance.
* A special scheme has been launched to finance taxi drivers of Mumbai
Region to replace old taxies and for bus operators plying school children.
Doctor plus scheme has been revamped and overall loan amount has been
enhanced to Rs. 10 crores, as healthcare is a critical area and growth
potential is immense.
* For SME borrowers, a special SME Car loan campaign offering competitive
rates of interest was launched in Sept' 2010.
* To alleviate the burden of small SME borrowers facing crunch, an OTS
Scheme, namely, SBI OTS-SME, 2010 was launched for resolution. The scheme
was open for receipt of application upto 31.07.2010 and for repayment upto
31.03.2011. Compromise settlements have been approved in as many as 29,066
cases aggregating Rs. 363.39 crores.
* To strengthen the credit skills of officers handling SME advances, a
special programme named 'SME Gyanshala' was launched. The target for
imparting training to 8,000 officials under the programme was achieved.
* Focus remained on CASA deposits and for this purpose, a specially
designed SME Power product with eight variants based on the quarterly
average balances in the accounts ranging from Rs. 20,000 to Rs. 5.00 lac
has been put in place. Further, alternate channel products, both through
ATM & INB, have also been offered to a large number of SME customers.
D.3 Government Business Unit (GBU):
* The facility for e-payment of Railway Freight has been provided to 477
Corporates including Private Container operators by the Bank and more and
more Corporates are keen to adopt this new convenient system. At present,
56% of the Railway Freight is being collected through this e-route.
* SBI is the Sole Refund Banker for Income Tax Refunds, which was initially
operational at 6 centres and has since been extended during the year to all
the 24 Zonal Account Offices (ZAO) of CBDT.
* Cyber Treasury for collection of State Govt. Taxes through e-route is now
operational in 23 States viz. MP, Rajasthan, UP, Chattisgarh, Haryana,
Gujarat, Bihar, Goa, Assam, Punjab, Andhra Pradesh, Maharashtra, Tamil
Nadu, Karnataka, Kerala, West Bengal, Uttrakhand, Delhi, Orissa, Arunachal
Pradesh, Himachal Pradesh, Jharkhand and Meghalaya. In other States,
implementation of Cyber Treasury for collection of State Govt. Taxes
through e-route is at various stages of progress.
* Fund cum Authorization Model for Social Sector Flagship Schemes like
National Literacy Mission (NLM) of the Ministry of HRD is at the
implementation stage. MoU has been signed between Ministry of HRD and the
Bank for the NLM Project. Out of the 26 States identified for
implementation of the NLM Scheme, SBI is the partner in 22 States.
Payment of UPSC examination fees started w.e.f. 06.02.2010 through Cash
Deposit at all SBI branches, Internet Banking, VISA/Master Card co-branded
cards of all banks for all examinations conducted by UPSC. Collection of
Online Recruitment Application (ORA) Fees of Union Public Service
Commission was launched on 14.08.2010.
* Passport Seva Project (PSP) of Ministry of External Affairs (MEA),
wherein 77 Passport Seva Kendras (PSKs) are to be set up has been launched
and started at 7 centres at Bangaluru and Chandigarh Circles. The PSP was
inaugurated on 23.05.2010 by the Hon'ble Minister for External Affairs. 12
more centres have been identified by the MEA in Tamilnadu and Andhra
Pradesh, which are likely to be functional by June/July 2011.
* Revised procedure for payment of Composite Fee for National Permit (NP)
through INB and through Cash Deposit at all SBI Branches across the country
for Ministry of Road Transport and Highways was launched on 15.09.2010.
* A new Product 'Rail Shakti' has been launched on 01.03.2011 on Pilot
basis for North Central Railway, Allahabad. The pilot is successful and
will be extended to cover other Railway Stations to collect their earnings
in an efficient manner.
* Govt. Banking Unit of State Bank of India was felicitated for the e-
governance initiatives undertaken and awarded 'MY FM Stars of the Industry
Jury Special Award' on 9th February 2011 at Mumbai.
E. RURAL BUSINESS GROUP (RBG):
Rural Business Group, which deals with the business of the Bank at all
rural and semi urban centres (RUSU), now handles a deposit portfolio of
Rs.3,06,366 crores and credit portfolio of Rs. 1,65,230 crores, which is
37% and 25% of the Bank's total domestic deposit and credit portfolio
respectively as on 31.03.2011:
(Rs. in Crs)
Particulars As on As on Growth
31.03.2010* 31.03.2011 %
Deposits 2,60,721 3,06,366 17.51%
Advances 1,48,201 1,65,230 11.49%
*(Erstwhile SBIN business treated in base figures for March 2010)
Highlights/Initiatives during the year:
* SBI commands market share of 24.53% in deposits and 23.58% in advances in
Rural and Semi Urban Centres as on 31st December 2010.
* High proportion (60.41% of total deposits) of CASA deposits in the group
contributed to its lower cost of deposits at 5.32%.
* The business strategy envisaged setting up of multi pronged sourcing
agents coupled with improved back end processing capacity.
* The Bank has appointed more than 35,000 Customer Service Point (CSP)
(Business Correspondents CSP-20,700 & Business Facilitators CSP-14,400).
Some of the national levels BC/BFs are India Post and ITC, National Bulk
Handling Corporation, Reliance Dairy, Hindustan Unilever Ltd.
* SBI is the first Bank to sign MoU with UIDAI to become a Registrar. The
enrolment data will be used for opening UID enabled' accounts. After State
Governments, SBI is the top enroller with more than 9.50 lac enrollments
done up to 31.03.2011.
* 65 Financial Inclusion Centres to support the Business Correspondent
(BCs) have been set up across the country during the FY 2010-11.
* In order to further strengthen the manpower in RUSU geography, a new
cadre of permanent officer has been created, named as Probationary Officer
(Rural Business) - PO (RB). 1,527 such officers have joined the Bank in the
year.
* To increase its outreach, Bank has opened 281 rural and 112 Semi Urban
branches during the FY 2010-11, taking the total number of branches to
5,138 in rural and 3,909 in semi urban geography. Rural and Semi Urban
Branches constitute 67% of total branches of the Bank.
Micro Finance and Financial Inclusion:
* The Bank is the market leader (market share around 29.88% as on
31.03.2010) in SHG-Bank Credit Linkage programme having credit linked so
far 18.90 lac SHGs (1.78 lac SHGs credit linked during FY'10-11) and
disbursed loans to the extent of Rs. 14,500 crores (cumulative) up to
31.03.2011.
* Bank has rolled out several unique products like SHG Credit Card, SHG
Sahayog Niwas and SHG Gold Card.
* Under the scheme for financing NGOs / MFIs for on-lending to SHGs, the
Bank has covered 188 units with outstanding of Rs. 946 crores as on 31st
March 2011.
* Coverage of Micro Insurance product - Grameen Shakti has been extended.
1.14 million lives have been covered so far.
* Covered 6,599 allocated unbanked villages with population more than 2,000
as at 31st March 2011 as against the target of 5,261 villages for the year.
* The Bank is a major player in Electronic Benefit Transfer (EBT) project
of Government benefit payments, with participation in six States. About 24
lac beneficiaries are serviced by BC channel.
Multiple IT enabled channels for Financial Inclusion:
The Bank has gone beyond the usual domains of technology in terms of
platform, solution, operational details and service contents in a very
aggressive manner to serve the excluded common citizen with minimal costs.
Some of these channels are:
SBI Tiny Card - Tiny Smart Card is biometrically enabled Contact-less /
Contact Cards / Chip / chipless operable at PoT/PoS device machine.
Chipless Cards have been introduced to cut down the cost of operations. The
operations through the PoS/PoT device support both offline & online / real
time transactions in customers' account. About 9 lac customers have been
enrolled during the Financial Year (cumulative more than 50 lac customers).
Tiny Cards now support Savings Bank, Recurring Deposit, SB-Cum-Overdraft
and Remittance products. Tiny Card for SHG customers with authorized
signatories & finger print validation operable at BC / CSP PoS near to
their place of residence has been introduced. Approximately, 28,000 SHG
groups and 1,54,000 SHG members with tiny cards for individuals have been
covered up to 31.03.2011.
Kiosk banking - It is Bank's own Technology Initiative, operated at
internet enabled PC (Kiosk) with bio-metric validation. Supports online /
real-time transactions. Besides individuals, Companies and Common Service
Centers set-up under e-governance project are also working as BC / CSP
using this channel.
* Rolled out in 26 states and 3,120 districts.
* Total of 3,373 CSPs.
* Over 2.34 lac customer enrollments.
* The technology is widely accepted by the BCs both at national and state
level.
Cell Phone Messaging Channel - Cost effective model, works on low - cost
simple mobile phones.
Transactions are well secured through PIN / signature based security.
* Rolled out in 7 states across 14 districts.
* Total no of CSP outlets 876.
* Approximately 1.85 lac customers enrolled.
Urban Financial Inclusion:
* To cater to Urban excluded, more than 2,300 BC outlets have been set up
in Urban/Metro centers.
SBI Tatkal:
* New product of instant credit / cash deposit to CBS account of any branch
has been launched on all channels for benefit of Customers, especially
urban migrant labour.
E.1 Agri Business:
(Rs. in Crs)
Particulars As on As on Growth
31.03.2010 31.03.2011 %
Agri Institutional
Deposits 14,981 19,724 32%
Agri Priority Advances:
a) with RIDF 84,151 94,826 13%
(Rural Infrastructure
Development Fund)
b) without RIDF 78,250 94,826 21%
The Bank has recorded a 13% growth in Agri priority sector advances on YoY
basis, the actual growth works out to 21% (excluding RIDF), as the RIDF is
not allowed to be reckoned as part of Indirect Agri Advances w.e.f.
01.04.2010. The growth is despite an amount of Rs. 3,064 crores received
from Govt. of India on account of Debt Waiver & Debt Relief Claim of ADW&DR
Scheme, 2008 and around Rs. 1,000 crores recovered from Other Farmers'
eligible under Debt Relief Scheme.
Achievements / initiatives during the year:
* The Bank has recorded Rs. 41,208 crores disbursement (103% of annual
target of Rs. 40,000 crores of Agri disbursements) under Flow of Credit to
Agriculture' as against Rs. 34,179 crores (against annual target Rs.33,500
crores) in FY'11 and financed 10.85 lac new farmers against the target of
8.40 lac during the year.
* Special interest rates Concessionary Scheme launched for minor irrigation
loans upto Rs. 25 lac and crop loans above Rs. 3 lac and upto Rs. 25 lac
(crop loans upto Rs. 3 lac are covered under Interest subvention scheme of
GoI).
* Produce Marketing loans - launched exclusively for farmers at
concessionary interest rate. The Bank has also given interest rate
concessions for Dairy, Poultry, Horticulture Loans and for Construction &
Running of Cold storages / Warehouses / Rural Godowns.
* Thrust was also given for formation of Joint Liability Groups through
Corporate Tie-ups. Special focus was given for creation of efficient Cold
Storages and Warehouses by providing discounts in interest rates and for
making them sustainable to help farming community save losses on post
harvest, particularly crops of fruit & vegetables in line with GoI's policy
for augmenting storage capacity.
* Krishi Gyan was launched to enhance awareness of the agri products and
processes among the operating staff working at rural and semi-urban
branches.
* High tech dairy/poultry farming & National Horticulture Board approved
activities were given thrust by extending loans at concessional interest
rate to increase technological market share in high value allied
agricultural activities.
Agriculture Commercial Branches (ACBs):
* As a new initiative, SBI has opened 11 ACBs in all potential centres to
capture emerging High value Agri and Agri related SME opportunity,
including Agro processing units.
New Products:
During the current year, the Bank has introduced 2 new products 'Pushpa
Ullas' and 'Arthias Plus' on pilot basis.
Bonding with Farmers: To enhance customer awareness and ensure continued
relationship with the farming community, various initiatives have been
continued under Bonding with Farmers'. Achievements during FY' 11 are
given as under:
Initiative Achievement
Villages adopted
(SBI ka Apna Gaon) 218
Farmers' Clubs formed 297
Farmers' Meets conducted 57,912
E.2. REGIONAL RURAL BANKS (RRBs):
Migration to Core Banking Solutions (CBS) Platform:
As per GoI guidelines, all RRBs have to be migrated to CBS by Sept' 2011.
The Bank has sponsored 18 RRBs. Out of 18 RRBs, 10 RRBs are 100% compliant.
In remaining 8 RRBs, the migration to CBS is at an advanced stage.
Credit Deposit Ratio:
The Bank has ensured continuous growth in the CD ratio of RRBs (from 61.08%
in March 2010 to 61.83% in March 2011) for the development of rural
economy.
Rural Self Employment Training Institutes (RSETIs):
RSETI's offer free, unique and intensive short-term residential self-
employment training programmes with free food and accommodation, designed
specifically for rural youth. Under the guidance of Ministry of Rural
Development (MoRD), GoI, the Bank has set up 93 RSETIs as on 31.03.2011 in
the lead districts across the country; conducted 2,798 training programmes,
trained 72,011 candidates and arranged credit linkage to 19,115
beneficiaries.
Financial Literacy and Credit Counselling Centres (FLCCs):
The broad objective of FLCCs is to provide free financial literacy /
education and credit counseling to all segments of society in a phased
manner. FLCCs are also expected to assist and guide the distressed
individual borrowers and undertake all activities that promote financial
literacy, awareness of the banking services, financial planning of an
individual. As on 31.03.2011, the Bank has set up 11 FLCCs.
Advances to weaker section:
The Bank has extended advances to the tune of Rs. 59,213 crores as on
31.03.2011 to the weaker sections, which is 10.42% of Adjusted Net Bank
Credit (ANBC) against the benchmark of 10 % of the ANBC set by the Reserve
Bank of India.
Prime Minister's New 15 Point Programme for the welfare of Minorities and
Implementation of Sachar Committee recommendations:
The Bank has implemented Prime Minister's New 15 Point Programme for the
welfare of Minorities, whose important objective is to ensure that an
appropriate percentage of the Priority Sector Lending is targeted for the
Minority Communities and that the benefits of various Government sponsored
schemes reach the under-privileged, particularly the disadvantaged section.
The year-wise position in respect of financial assistance to Minority
Communities in the identified Minority Concentration Districts (MCDs) is
given below:
Period No. of districts No. of Amount
as on identified by A/cs (Rs. in
GoI (MCDs) crores)
March 2009 121 9.91 lac 5,091
March 2010 121 8.29 lac 9,434
March 2011 121 8.41 lac 10,536
* Against GoI stipulated target of 15% of the total Priority Sector Lending
(PSL) to Minority Communities, the Bank has achieved a level of 15.86% of
the total PSL as on 31.03.2011.
* As per Sachar Committee recommendations, the Bank has opened 132 new
branches in underbanked/unbanked areas in MCDs taking the total number of
such branches to 3,133 as on 31.3.2011.
F. CROSS SELLING:
The large network of branches of the State Bank Group is being leveraged to
deliver para banking products of SBI Life Insurance Co., SBI Mutual Fund,
SBI Card, SBI General and other third party AMC companies having tie-up
arrangement with SBI, thereby offering wider range of financial products to
our customers.
During the year, the Bank covered 7.50 lac lives under various schemes of
SBI Life Insurance. Looking at the popularity, the Health Insurance product
covering nine critical illnesses named 'Criti 9' is extended across the
country. Also, for encouraging investment among small investors, the Bank
popularised SIP (Systematic Investment Plan) product by which middle income
group customers can invest regularly in the Mutual Fund. A total of 3.46
lac customers were covered during the year under the scheme. 'Over the
Counter' payment option is extended to SBI Card customers for payment of
credit card dues, thus transforming the company into the industry leader in
payment options. The Bank has also tied up as Corporate Distributor for SBI
General Insurance Co. Ltd. for distribution of non-life insurance products.
G. CORPORATE STRATEGY AND NEW BUSINESS:
The New Businesses Department has been successful in achieving the
objectives with which it was set up. Two new lines of business viz.
Custodial Services and General Insurance have been successfully set up and
are in the process of stabilization. Other initiatives being pursued are
Private Equity, Financial Planning & Advisory Services (FP&AS), Merchant
Acquisition and Mobile Banking. Seven niche areas viz. Mobile Banking,
Merchant Acquisition Business, SME Current account and Supply Chain
Finance, Savings Bank, Cash Management Product, NRI remittances and Govt.
business have been identified for strategising aggressive business plans,
improving processes and matching organizational structures.
Financial Planning and Advisory Services (FP & AS):
A new business model for delivery of Financial Planning and Advisory
Services (FPAS) has been put in place. The model envisages an exclusive
FPAS team (the Hub) to cater to the requirements of Affluent and HNI
customers of important branches (the Spokes). 55 Hubs are being formed in
44 cities across the country. A dedicated cadre of 200 Customer
Relationship Officers would deliver the services to clients.
The Bank is proposing to launch Wealth Management services during FY 11-12.
Demat & Online Trading:
The Bank is offering Demat services from 2,800 branches across India. As on
31st March 2011, the Bank has 2,94,146 Demat Accounts in its books, out of
which approximately 70 % account holders have also opted for Online Trading
facility. The Bank is also putting in place a revised business model
whereby the Demat Account in the 3-in-1 online trading product will be
maintained with our subsidiary SBI Caps Securities Limited (SSL) instead of
with SBI.
Payment Solutions:
The Green Channel Counter:
The Bank launched its 'Green Channel Counter' on the 1st July 2010, at
select branches across the country. This is an innovative step taken by the
Bank towards changing the traditional paper based banking to the card based
Green Banking' focusing on reduction in paper usage as well as saving of
transaction time. The Bank is attempting to change the behaviour of
customers from voucher based banking to card based transactions.
Mobile Banking Service (MBS):
'State Bank Freedom', our Mobile Banking Service, is gaining popularity
among our customers as a very convenient alternate channel offering
Anytime Anywhere' banking. There are more than 10 lac customers using the
Service. There are, on an average, 57,000 total transactions conducted per
day over this alternate channel.
The Bank has won two Awards for Mobile Banking Service:
* The Prestigious IDRBT award for Best use of technology for mobile
banking and payment application.' (awarded on 18th June 2010)
* 'Mobile Banking - State Bank of India through USSD Short Code *595#' has
been voted as one of the best projects in the Citizen's Choice category of
eINDIA Awards 2010 for eGov Financial Inclusion Initiative of the Year
(awarded on 5th August 2010).
NEFT/RTGS:
RTGS and NEFT have emerged as the most cost-effective and efficient modes
of Remittance. The number of outward remittances through RTGS and NEFT have
registered a Y-o-Y growth of 44.08% and 252.00% respectively till 31st
March 2011. The Bank has maintained its leadership position in RTGS with a
market share of 13.84% as on 31st March 2011. In NEFT, the Bank was ranked
2nd with a 12.17% market share as at end of March 2011 (4th position in
March 2010). Further, NEFT remittance through Mobile Banking is gaining
popularity.
Debit Cards:
State Bank Group in its efforts to reduce cash usage in the payments space
launched two new variants of Debit Cards, viz State Bank Classic Debit Card
& State Bank Silver International Debit Card to supplement the nation's
effort to move towards a near cashless economy. The State Bank Group is the
leader in the Debit Card market with over 90 million Debit Cards as on 31st
March 2011, which constitute about 40% market share. Besides, the Bank's
average number of daily transactions at PoS have gone up to 1.53 lac in
March 2011 against 0.89 lac in March 2010. The average daily PoS spend went
up to Rs. 24.19 crores per day in March 2011 against Rs. 14.92 crores per
day in March 2010.
Prepaid Cards:
Bank's range of Prepaid Cards viz. SBI Vishwa Yatra Foreign Travel Card
(VYFTC), eZ-Pay Card and Gift Cards cater to the various payment needs
provide safety and convenience to overseas travellers. eZ-Pay Card caters
to all kinds of domestic payment needs and is proving to be the preferred
mode for disbursement of social benefits by various State Governments. The
Bank has also introduced the online purchase facility for Gift cards for
greater convenience to customers. The sale of SBI Vishwa Yatra Foreign
Travel Cards (VYFTC), eZ-Pay Cards and Gift Cards was USD 74.24 million,
Rs. 550.60 crores and Rs. 103.94 crores respectively during the FY 2010-11.
General Insurance:
As part of its strategy to enhance its value proposition to its customers
and with a view to leveraging the value of in-house business and establish
State Bank Group as a leading player in the financial services sector, the
Bank has set up SBI General Insurance Co. Ltd. (SBI General) as a
Subsidiary with an authorised and paid-up capital of Rs. 150 crores. While
the Bank invested 74% (Rs. 111 crores) in the equity capital, the Joint
Venture Partner IAG International Pty. Ltd. (IAG) has invested the
remaining 26% (Rs. 39 crores + Rs. 503.10 crores as premium - Total
Rs.542.10 crores).
The Company launched its business operations in the last financial year.
Total business (Gross Written Premium) booked during the year 2010-11 was
Rs. 43.02 crores. The business has been written through various channels
like Bancassurance, brokers, agents, direct sale etc.
The Company launched limited operations in April 2010 for the Corporate and
Mid Corporate customers based at Mumbai, and it was expanded to six other
major locations in July 2010. It will be extended to other major locations
in a phased manner during the current financial year.
General Insurance SME business has been launched on a pilot basis in Mumbai
and Chennai in February 2011, and the Company proposes to extend it to
other locations in a phased manner.
In the Retail segment, the Company launched its Long Term Home Insurance
business at Mumbai in October 2010, which was gradually extended to cover
56 RACPCs and RASMECCs.
Long Term Home business has also been launched from 60 key SBI Branches
with high levels of Home Loan disbursals. The Company has since opened 17
branches across India, keeping in view the business potential at these
centres.
Custodial Services (SBI-SG Global Securities Services Pvt. Ltd.):
The above JV between the Bank and Societe Generale (SG) was incorporated in
2008 to complete the bouquet of services on offer to both Domestic
Institutions and FIIs operating in the Financial Markets in India. By
forming a JV with a leading global player, SG, the Bank proposes to bring
in the best practices and technology in this industry worldwide, and gain a
share of the business of FIIs spread in all geographies that enter the
Indian market through the Global Custodian route or directly besides
becoming the preferred choice of Domestic Institutions as well.
The Company, registered as a Custodian with SEBI and Depository Participant
with CDSL and NSDL offers Custodial Services and Fund Administration
Services to both Domestic Institutions and FIIs and its sub-accounts. The
Company commenced its custody operations in May 2010, started delivering
Fund Accounting services from September 2010 and acquired FII clients from
December 2010.
The company has broken even on a month to month basis from January 2011 and
posted a net loss of Rs. 1.37 crores for FY ended 31st March 2011
(Accumulated Loss Rs. 7.43 crores) compared to a net loss of Rs. 4.29
crores in 2009-10.
Private Equity (PE):
During the year, the Bank made substantial progress in establishing itself
as a leading PE fund player of the country.
The infrastructure fund JV with Macquarie Australia and IFC, Washington
closed fund raising for its Domestic and Overseas legs mobilizing an
aggregate investment commitment of USD 1.19 bn. The fund booked some of the
largest deals concluded during the financial year and was acknowledged as
one of the top ranked PE fund in India by many leading industry
publications.
The Bank also signed a Joint Venture agreement with State General Reserve
Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general
purpose private equity fund with an initial corpus of USD 100 mn,
expandable further to USD 1.5 bn. All necessary regulatory approvals were
obtained and the fund was operationalized during the financial year. As the
Fund sector agnostic, the fund has started looking at investment
opportunities in various growth sectors for investments.
Merchant Acquiring Business (MAB):
Today in the Indian Market, there are more than 1.5 crores Merchant
Establishments, out of which only 3.5 lac have been equipped with Point of
Sales (PoS) terminals. In view of the huge untapped potential coupled with
growing organized retail business, the Govt.'s drive to migrate to
electronic channels, migration of 100% of the Bank's business to Core
Banking platform and the increased use of technology in SBI, the Bank
decided to foray into MAB and floated a wholly owned subsidiary namely SBI
Payment Services Pvt. Ltd. (SBIPSPL) for this purpose. It also identified
VISA International and Elavon Inc., who are the global market leaders, as
joint venture partners. In the intervening period, the Bank on its own is
conducting the business and is presently focussing on existing SBI
borrowers and Current Account customers belonging to the Trade and Services
sectors in the Retail segment in Tier 1, Tier 2 and Tier 3 centres by
leveraging the large network of branches. It is also focussing on corporate
tie-ups and has already entered into tie-ups with prominent players like
Future Group, National Handloom, Liver Pool etc.
H. INTERNATIONAL BANKING GROUP:
H-1.Operation of Foreign Offices:
The asset level of foreign branches (excluding subsidiaries) rose by 16%,
from USD 27.78 bn in March 2010 to USD 32.04 bn in March 2011. During
FY'11, net customer credit grew by 13% from USD 21,561 mn to USD 24,525 mn,
customer deposits grew by 20%, from USD 8,775 mn to USD 10,490 mn and net
profit rose by 38%, to USD 326 mn.
Overseas Expansion:
The number of foreign offices increased from 142 as on 31st March 2010 to
156 as on 31st March 2011 spread across 32 countries.
The offices comprised 45 branches, 8 Representative Offices, 93 offices of
the six foreign banking subsidiaries and 10 other offices.
Resource Management:
Despite volatile global market conditions, the Bank's foreign offices
maintained comfortable liquidity position. In July 2010, the Bank raised a
sum of USD 1 bn (Rs. 4,460 crores approx) under a Standalone Rule 144A /
Reg-S issue as senior debt of 5 years. This was followed by a bond issue in
Euro wherein Bank raised EUR 750 mn (Rs. 4,754 crores approx.) for 5 years,
under the Bank's MTN Programme. In January 2011, USD 100 mn (Rs. 446 crores
approx) was raised by way of private placement. During FY'11, the Bank also
made a debut issue in Swiss bond market and raised CHF 325 mn (Rs. 1,582
crores approx.) for 5 years, under MTN programme.
During the year ended 31st March 2011, the Bank raised a sum of USD 893 mn
(Rs. 3,982 crores approx.) by way of bilateral loans of different
maturities.
NRI Business:
NRI Deposits grew by Rs. 1,760 crores during the year and reached a level
of Rs. 51,777 crores in March 2011. Advances to NRIs recorded a growth of
Rs. 162 crores with outstandings of Rs. 1,380 crores as on 31st March 2011.
Remittances grew from Rs. 37,319 crores in FY'10 to Rs. 46,396 crores in
FY'11, clocking a growth of 24%. The Bank had a tie-up with 24 exchange
companies and four banks in Middle-East countries for routing remittances
through SBI.
During the year, twenty new NRI branches were opened taking the number of
NRI branches to 40. Relationship Managers have been posted at these
branches to render focused services to NRIs.
'FCNR (B) Premium Account' designated in GBP, EUR, AUD, CAD and JPY was
launched in addition to the Dollar Premium Account. RFC Account facility,
presently available in USD, was extended for GBP and EUR as well.
H-2.Domestic Operations:
Merchant Banking:
The Bank retained the leadership as Mandated Lead Arranger and Book Runner
for syndicated loans in Asia Pacific (excluding Japan but including
Australia) for the year ended March 2011.
During the year, eleven high value deals aggregating USD 18,548 mn with our
take and hold of USD 3,683 mn were syndicated successfully. A large number
of bilateral deals aggregating USD 479 mn were also concluded.
A fee income of USD 116 mn was earned from syndications and bilateral deals
concluded during the year.
Global Link Services (GLS):
In the year 2010-11, GLS on behalf of domestic branches, handled 1,32,540
export bills and 1,28,485 foreign currency cheque collections aggregating
USD 15.92 billion. In addition, it handled 40,58,830 inward remittance
transactions amounting to USD 4.26 billion from various centres in the
Middle East, UK and USA.
Correspondent Relations:
The Bank maintains correspondent banking arrangement with 491 reputed
International Banks to extend seamless services to varied clients. These
correspondent Banks are located in 121 countries. The Bank also has 2,261
Relationship Management Application (RMA) arrangements with SWIFT,
facilitating speedier flow of financial messages.
Country Risk and Bank Exposures:
The Bank has in place Country Risk Management Policy in tune with RBI
guidelines. The policy outlines robust risk management model with
prescriptions for Country, Bank, Product and Counterparty exposure limits.
Both Country-wise and Bank-wise exposure limits are monitored and reviewed
on a regular basis. The exposure ceilings and classifications are moderated
in line with the dynamics of their risk profiles. Periodical corrective
steps are initiated to safeguard the Bank's interests.
I. ASSET QUALITY:
NPA MANAGEMENT:
The position of NPA reduction as on 31.03.2011 is given hereunder:
Table : Asset Quality:
(Rs. in Crs)
1. Gross NPAs 25,326
Gross NPA percentage 3.28%
2. Net NPAs 12,347
Net NPA percentage 1.63%
3. Cash Recovery in NPA 3,848
4. Up gradation to Standard Assets 4,499
5. Write offs 4,007
6. Gross reduction in NPAs (3+4+5) 12,354
7. Fresh Slippages of Standard Assets to NPA category 18,145
8. Recovery in written off accounts 966
* Restructuring of impaired Standard Assets as well as viable non-
performing assets, both under CDR mechanism as well as under the Bank's own
scheme, has been given top priority for arresting new additions and for
reducing the existing level of NPAs.
* Proactive steps have also been taken for prevention of NPAs.
* The Bank referred 10 cases with aggregate exposure of Rs. 1,378.93 crores
to CDR mechanism during 2010-11, out of a total of 49 cases referred to CDR
by the Whole Banking system including SBI. Out of these 49 cases, the Bank
has exposure on 25 cases aggregating Rs. 2,250.24 crores.
J. ASSOCIATES AND SUBSIDIARIES:
J.1 The State Bank Group with a network of 18,266 branches including 4,724
branches of its five Associate Banks dominates the banking industry in
India. In addition to banking, the Group, through its various subsidiaries,
provides a whole range of financial services, which include Life Insurance,
Merchant Banking, Mutual Funds, Credit Card, Factoring, Security trading,
Pension Fund Management and Primary Dealership in the Money Market.
J.2 Associate Banks:
SBI's five Associate Banks had a market share of 5.88% in deposits and
6.00% in advances as on last Friday of March 2011.
Table : Performance Highlights of Associate Banks (ABs):
(Rs. in Crs)
As on As on Change
31.03.2010 31.03.2011 (%)
Total Assets 3,18,580 3,68,283 15.60
Agg. Deposits 2,72,790 3,11,645 14.24
Total Advances 2,04,573 2,40,423 17.52
Operating Profit 5,841.90 7,568.68 29.56
Net Profit 2,958.80 3,598.43 21.62
Credit Deposit Ratio 74.15% 77.29% 4.23
Capital Adequacy Ratio 13.66 13.25 -0.41
Gross NPA 3,504.68 5,066.50 44.56
Net NPA 1,692.96 2,443.69 44.34
Return on Equity 18.97% 19.08% 0.11
J.3 SBI Commercial & International Bank Ltd. (SBICI):
As at the end of March 2011, the aggregate Deposits and total Advances of
SBICI stood at Rs. 453.27 crores and Rs. 271.43 crores respectively. The
Bank recorded an operating and net profit of Rs. 5.25 crores and Rs. 4.21
crores respectively. The net NPA as at the end of March 2011 was NIL.
J.4 SBI Capital Markets Limited (SBICAP):
SBICAP is a full service investment banking outfit offering Project
Advisory Services, arrangement of Structured Finance, Capital Market
Services like Equity Issuances, Mergers & Acquisitions and arrangement of
Private Equity, etc. SBICAP is a leader in India in Project Finance with
over 40% market share. The following are some of the many awards /
recognitions won by the Company during the year:
* Bank of the year award 2010 for Asia Pacific Region for the 3rd
consecutive year by Thomson Reuters.
* Loan House of the Year Award for the 2nd consecutive year by IFR Asia.
* Euromoney Project Finance Indian Deals awards -
- Indian Petrochemical Deal of the Year 2010-ONGC Mangalore Petrochemicals
- Indian Industrial Deal of the Year 2010 - Dungsam Cement
- Indian Oil & Gas Deal of the Year 2010 - GSPC KG Offshore
* Ranked No 1 Global Mandated Lead Arrangers for 2010 by PFI (Thomson
Reuters) for the second successive year.
* Ranked No 1 Global Lead Arrangers for the second successive year by
Dealogic.
* Ranked 1st with an impressive market share of 13.3% for the 1st quarter
of calendar 2011 on the Asia Ex-Japan Syndicated Loans Table as per
Bloomberg.
* Ranked 2nd in terms of issues handled and 3rd in terms of amount raised
during the financial year 2010-11.
* Ranked 1st in Rights Issues- both in terms of number of issues and amount
raised.
* Ranked 1st in number of PSU Divestment Issues.
The company has posted PAT of Rs. 374.72 crores as on 31.03.2011 as against
Rs. 137.12 crores as on 31.03.2010 thus recording YoY growth of 173%. Also
declared an interim dividend of 400%.
J.4.1 SBICAP Securities Limited (SSL):
SSL, a wholly owned subsidiary of SBI Capital Markets Ltd., besides
offering equity broking services to retail and institutional clients both
in cash as well as in Futures and Options segments, is also engaged in
Sales & Distribution of other financial products like Mutual Funds, etc.
SSL has 100 branches and offers Demat, e-broking, e-IPO and e-MF services
to both retail and institutional clients.
SSL currently has more than 1.89 lac customers in their books. The Company
has posted a profit of Rs. 4.59 crores as on 31.03.2011 during the current
year.
J.4.2 SBICAPS Ventures Limited (SVL):
SVL is a wholly owned subsidiary of SBI Capital Markets Ltd. SVL earned a
net profit of Rs. 0.59 crore during 2010-11.
SVL sold its stake in SS Ventures Services Ltd., a venture capital fund set
up jointly by SVL and SBI Holdings Inc (Softbank), Japan and its stake in
India Japan Fund to SBI Holdings Inc and Knowledge Investments (Mauritius)
Ltd at a total consideration of Rs. 3.47 crores and Rs. 2.60 lac
respectively.
J.4.3 SBICAP (UK) Ltd. (SUL):
SUL is a wholly owned subsidiary of SBI Capital Markets Ltd. During the
year SUL has booked a revenue of Rs. 2.16 crores and has posted a net
profit of Rs. 0.20 crore despite the global recessionary scenario.
SUL is positioning itself as a Relationship outfit for SBI Capital Markets
in UK and Europe.
Relationships are being built with FIIs, Financial Institutions, Law Firms,
Accounting Firms, etc to market the business products of SBICAP.
J.4.4 SBICAP TRUSTEE Co. Ltd. (STCL):
SBICAP TRUSTEE Co Ltd (STCL), a wholly owned subsidiary of SBI Capital
Markets Ltd., which has commenced security trustee business with effect
from 1st August 2008 has earned a gross income of Rs. 8.31 crores and a Net
Profit of Rs. 4.43 crores during 2010-11 as against Gross Income of Rs.3.78
crores and Net Profit of Rs. 1.94 crores during 2009-10.
J.5 SBI DFHI Ltd. (SBI DFHI):
SBI acquired Asian Development Bank's and Industrial Investment Bank of
India's stake (4.69% and 0.47% respectively) in SBI DFHI during the course
of the year. SBI group holds 72.17 % share in the Company, which is a
primary dealer.
* For the period ended 31st March 2011, the Company's PAT was Rs. 56.94
crores as against Rs. 89.23 crores during March 2010. The lower profit is
mainly attributed to the impact of hikes in Repo rates by RBI and yield on
investments remaining stagnant.
* The market share of SBIDFHI has increased from 2.71% as on 31.03.2010 to
3.41% as on 31.03.2011.
The secondary market turnover during the year was Rs. 97,885 crores as
against Rs. 78,911 crores during the corresponding period in 2010 (YoY
growth of 24%).
J.6 SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)
* SBI Cards, the only stand-alone credit card issuing company in India, is
a joint venture between State Bank of India and GE Capital Corporation,
wherein SBI holds 60% stake.
* The 'Cards in Force' (CIF) of the Company stands at 23 lac and the
receivables are at Rs. 1,795 crores at the end of March 2011.
* The Company has posted a net profit of Rs. 7.10 crores as on March 2011
as against a loss of Rs. 152.4 crores as on 31.03.2010.
* SBI Card has emerged as the most trusted brand by being the undisputed
Gold Award winner in Reader's Digest Trusted Brands Survey 2010 for the
third year in a row.
Table : The Performance Highlights of the Associate Banks as on 31.03.2011
are as under:
(Rs. in Crs)
Name of the Bank SBI's share Deposits Advances Operating Net
in the Profit Profit
capital (%)
State Bank of:
Bikaner & Jaipur 75.00 53319 41744 1140.25 550.88
Hyderabad 100.00 90178 65437 2319.47 1166.24
Mysore 92.33 42779 34440 1173.75 500.62
Patiala 100.00 67771 52331 1759.24 652.96
Travancore 75.00 57598 46471 1175.97 727.73
All 5 Banks 311645 240423 7568.68 3598.43
* SBI Card has won the CNBC Awaaz Consumer Awards 2010.
J.7 SBI Life Insurance Company Limited (SBILIFE):
* SBI Life is Joint Venture Company between SBI and BNP Paribas in which
SBI holds 74% stake.
* SBI Life has a unique multi-distribution model comprising Bancassurance,
Retail Agency & Institutional Alliances and Group Corporate Channels for
distribution of insurance products.
* Gross Premium of the Company Crossed Rs. 12,000 crores with YoY growth of
28%.
* SBI Life has a market share of 19.22% of the total market share of
private insurers which stood at 31.30% as on 31.03.2011. Overall market
share (including Life Insurance Corporation of India) of SBI Life stood at
6.02% as at 31st March 2011.
* Recorded a PAT of Rs. 366.30 crores as on 31.03.2011 as against Rs.276.46
crores as on 31.03.2010.
* The Assets under Management' of SBI Life recorded a growth of 40% YoY to
reach Rs. 40,162 crores as on 31st March 2011.
* SBI Life expanded its branch network by adding 135 branches during the
year bringing the total number of branches to 629.
* ICRA has reaffirmed iAAA rating to the company indicating highest claim
paying ability.
* CRISIL has reaffirmed its highest financial rating AAA/Stable.
The following are some of the awards/recognitions achieved by the Company
during 2010-11:
* NDTV Profit business leadership 2010-11 award for organizational
excellence. Bloomberg UTV Award for Financial Excellence 2010-11.
* Outlook Money Award Runner Up for the Best Life Insurance Company 2010-
11.
* ICS Quality Champion Award 2010-11.
* IS0 9001:2000 certification for superior claim process.
J.8 SBI Funds Management (P) Ltd. (SBIFMPL):
* SBIFMPL, the Mutual Fund arm of SBI, is the 6th largest Fund House in
terms of 'Assets Under Management' and a leading player in the market with
6 million investors.
* The schemes of the Fund House have performed consistently over the years
and have emerged as the preferred investment for investors.
* The company has posted a PAT of Rs. 78.85 crores as on 31.03.2011
registering a YoY growth of 4%.
* The average 'Assets Under Management' (AUM) of the company stood at
Rs.41,672 crores as against Rs. 37,417 crores as on March 2010 achieving a
YoY growth of 11% as against the growth of 6% for the Mutual Fund Industry.
J. 9 SBI Global Factors Ltd. (SBIGFL):
* SBIGFL is one of the leading factoring companies in India which has the
highest market share (over 90%) in export & import factoring.
* During the year ended 31st March 2011, the turnover of the company
decreased to Rs. 7,605 crores from Rs. 12,978 crores as on 31st March 2010
due to the sluggish growth in industrial production during the year
impacting the top line growth.
* The company incurred a loss of Rs. 125.62 crores during the year ended
31.03.2011 as against a profit of Rs. 6.58 crores earned on 31.03.2010
mainly on account of slow down in economy and due to higher provisioning
for NPAs and Write-offs.
J.10 SBI Pension Funds Pvt. Ltd. (SBIPF):
SBIPF is one of the three Fund Managers appointed by Pension Fund
Regulatory & Development Authority (PFRDA) for management of Pension Funds
under the New Pension System for Central Government (except Armed Forces)
and State Government Employees. SBIPF, a wholly owned subsidiary of the
State Bank Group, commenced its operations from April 2008. The total
'Assets Under Management' of the company as on 31st March 2011 were Rs.
3,764.11 crores (YoY growth of 65%). As at 31st March 2011, SBIPF was
managing 44% of the corpus under the Central Govt Scheme, 39% under State
Govt scheme and 64% under the informal sector. The Company recorded a net
profit of Rs. 0.32 lac.
Important Developments during the year in Associates & Subsidiaries:
* State Bank of Indore, one of the Associate Banks, was acquired on 26th
August 2010 after the final approval from RBI and GoI.
* State Bank of Mysore raised Rs. 583.20 crores equity through a Rights
Issue during the year.
* State Bank of Bikaner & Jaipur's Rights Issue for raising Rs. 780 crores
was open from 28th March to 11th April 2011.
Support & Control Operations:
K. Information Technology
L. Risk Management & Internal Controls
M. Customer Service & Corporate Social Responsibility
N. Corporate Communication & Change
O. Right to Information Act
P. Human Resources
Q. Business Process Re-engineering
R. Official Language
S. KYC/AML/CFT Measures
T. Fraud Prevention & Monitoring
U. Compensation Policy for deficiency in Service
V. Bank's Outsourcing Policy
W. Super Circle of Excellence
X. Green Banking Initiatives
K. INFORMATION TECHNOLOGY:
Networking: The Bank has implemented asecure, robust scalable WAN
architecture network built with equipments owned by SBI, connecting 19,347
Branches/Offices and 25,005 ATMs of State Bank Group through leased lines,
VSATs and CDMA technology.
Core Banking: CBS roll out across the domestic branches is supported with a
state-of-the-art centralized infrastructural setup and a robust Primary /
DR setup, providing uninterrupted continuity of Bank's operations. It
facilitates the scalability for future growth, interfacing with multiple
alternate channels, reduction in transaction costs, improved operating
efficiency. Milestones of 52 millions peak transactions in a day, 1,861
Transactions per second and managing 258 million accounts have been
achieved in recent months. Operatives have been provided with tools for on-
line real time transaction verification. E-Trade - internet based front end
application has been rolled out for corporate customers for processing
various trade finance transactions.
ATM: State Bank Group crossed an important milestone of rolling out
25,000th ATM during the year. Apart from Cash Withdrawal, Balance enquiry,
Mini statement and Card to Card transfer, several value added services such
as Utility Bill Payment, Temple/Trust Donations, Fee Payment, Mobile top
up, Cash/ Cheque deposit (at select ATMs), Cheque book request, Payment of
Insurance premium, SBI Credit Card Bill Payment etc. are also being offered
at 25,005 ATMs of the State Bank Group. Usage of debit cards at PoS
terminal has increased significantly. Bunch Note Acceptor (for direct
acceptance of cash), Multifunction kiosks (for offering non-cash ATM
transactions, Internet Banking transaction, passbook printing etc.), low
cost rural ATMs and solar powered ATMs have also been rolled out.
Internet Banking: The Bank's Internet Banking solution is a comprehensive
suite of products for both Retail and Corporate users. Some of the new
features enabled during the year include online nomination and closure of
e-TDR/STDR, opening closing of e-RD, viewing of Form 26 (Annual statement
26 for income tax credits), stop payment of cheques, request for multicity
cheque book, registration of mobile number in Core Banking account for SMS
alerts of core transactions, online issuance of gift cards and top up,
online validation of PAN while making tax payment, display of notional
interest in housing loan account etc.
Payment Systems Group: The volume of RTGS and NEFT transactions has
increased significantly.
Contact Centre operates on 24x7 basis from two locations Bengaluru and
Vadodara. Contact Centre is currently providing the following services:
Complaint Management System, Pension Management System, Lead Management
System, Account Enquiry Services, Payment Tracking System, Card Tracking
Services, Hotlisting of Cards, ATM PIN Regeneration, Providing MMID (Mobile
Money Identifier) information under IMPS (Interbank Mobile Payment
Services), Balance and Statement on mobile.
In respect of Prepaid Cards, the facility of placing request and funding
for procurement of Gift Card has been enabled through Internet Banking
portal (www.onlinesbi.com).
Mobile Banking: A host of Mobile Banking services, such as Fund Transfers,
Enquiry Services, Demat Account Enquiry, Cheque book request, Bill payment,
Mobile top up, DTH recharge, SBI Life Premium Payment, E-tag recharge to
pay toll tax, Merchant payments and Inter Bank Mobile Payment Services
(IMPS) are currently being offered. IMPS has been added during the year.
Mobile Banking Services are currently offered under five channels viz. SMS,
GPRS, WAP, USSD and SMS banking. SMS Banking has been introduced during the
last quarter of the year. The Mobile Banking user base has crossed one
million by the end of the year.
Enterprise Data Warehouse: The Phase II of the Enterprise Data Warehouse
Project (EDWP) has commenced. While a few business critical reports are
already provided by EDWP, the end users will have access to all regular and
ad hoc reports required for operational and decision making requirements
through a web portal in a phased manner.
Information Security: Bank has implemented a robust IT Policy and
Information System Security Policy which is in line with the international
best practices. These policies are reviewed periodically and suitably
strengthened in order to address emerging threats. Regular security drills
and employee awareness programs are conducted to ensure security and
increase awareness among staff. Business Continuity Management System
(BCMS) has been implemented at Global IT centre, Belapur.
Foreign Offices: 131 branches in 23 countries, including 2 OBUs in India,
run their operations on common banking application software Finacle, with
their databases connected to a central Data Centre backed up by a
synchronized Disaster Recovery site. The Rupee remittances from foreign
centres are routed through the central Payment Hub for credit to accounts
maintained with State Bank Group. The NEFT mechanism is used for credits to
accounts with other banks. The foreign offices also use the centralized
SWIFT infrastructure for their financial messages. All foreign offices use
Internet Banking channel, and 113 ATMs at various locations abroad cater to
the Bank's overseas customers with most of the ATMs connected to
centralized ATM Switch in India.
RRB Computerisation:
Out of 18 RRBs sponsored by the Bank, 10 RRBs have been computerised on CBS
platform using BaNCS application software through the ASP model.
Awards & Accolades:
During the year, The Bank has received the following national and
international awards in recognition of its technology implementation:
* The Banker - Innovation in Banking Technology Awards 2010 - State Bank
of India was declared Winner in Innovation in Eco-IT' category for its
GREEN ATM installation.
* The NASSCOM CNBC IT User Award 2010 - in the Banking Vertical for its
various IT initiatives.
* IDRBT Banking Technology Excellence Awards 2009: The Bank won two awards
in Best Use of Technology for Financial Inclusion' and Mobile Banking and
Payment Applications'.
* Best IT Implementation Awards 2010 by PC Quest: SBI's Project Green IT @
SBI' was rated as the Best Green IT Project for its GREEN ATM installation.
* Skoch Award 2010- in the 'Virtual Corporation Award' category for its
project - E-Payment Solution' which covers all our E-Governance
initiatives on Corporate Internet Banking Platform.
* Silver EDGE Award - for its 'Data Centre Consolidation Project' of
Foreign Offices Department.
* Amaron Quanta Express Uptime Champion Awards 2010 (Banking and Finance
Category) - the award recognizes organizations who have implemented
solutions that guarantee an optimal infrastructure uptime 24x7.
* VISA 2009 Global Service Award-the Bank's ATM cum debit card was declared
to have the lowest transaction response time.
* IBA Technology Award: Best Customer Initiative, Counter, Best Online
Banking, Best Risk Management (Runner up).
L. RISK MANAGEMENT & INTERNAL CONTROLS:
Risk Management in SBI:
L.1 Risk Management Structure:
* An independent Risk Governance Structure is in place for Integrated Risk
Management covering Credit, Market, Operational and Group Risks. This
framework visualises empowerment of Business Units at the operating level,
with technology being the key driver, enabling identification and
management of risk at the place of origination.
* The Risk Governance Structure in place in the Bank is as under:
* The Risk Management Committee of the Board (RMCB) has the overall
responsibility to monitor and manage Enterprise Wide Risk. The Credit Risk
Management Committee (CRMC), Market Risk Management Committee (MRMC),
Operational Risk Management Committee (ORMC), Group Risk Management
Committee (GRMC) and Asset Liability Management Committee (ALCO) support
RMCB.
* MD & Group Executive (Associates & Subsidiaries) and MD & Group Executive
(International Banking) are the members of RMCB, while MD & Group Executive
(National Banking) and MD & Chief Financial Officer are invited to attend
all the meetings of the Committee. The Deputy Managing Director & Chief
Credit and Risk Officer head CRMC, MRMC, ORMC and GRMC. ALCO is headed by
the Managing Director & Chief Financial Officer.
* Risk Management is perceived as an enabler for business growth and in
strategic business planning, by aligning business strategy to the
underlying risks. This is achieved by constantly re-assessing the inter-
dependencies / interfaces amongst each silo of Risk and business functions.
* Bank is in the process of implementing Enterprise Risk Management (ERM)
that will integrate all the Risk Management functions of the Bank, explore
inter-dependencies amongst various risk types and act as a support system
to strategic decision-making process.
L.2 Basel II Implementation:
* In accordance with RBI guidelines, the Bank has migrated to the Basel II
framework, with the Standardised Approach for Credit Risk and Basic
Indicator approach for Operational Risk w.e.f. March 31, 2008, having
already implemented the Standardised Duration Method for Market Risk w.e.f.
March 31, 2006.
* Simultaneously, the Bank is updating and finetuning its Systems and
Procedures, Information Technology (IT) capabilities, Risk Assessment and
Risk Governance structure to meet the requirements of the Advanced
Approaches under Basel II.
* Various initiatives such as new Credit Risk Assessment Models,
independent validation of Internal Ratings, loss data collection and
computation of market risk Value at Risk (VaR) and improvement in Loan Data
Quality would facilitate efficient use of Capital as well as smooth
transition to Advanced Approaches.
* Risk Awareness exercises are being conducted across the Bank to enhance
the degree of awareness at the Operating levels, in alignment with better
risk management practices, Basel II requirements and over-arching aim of
conservation and optimum use of capital.
* Keeping in view the changes that the Bank's portfolios may undergo in
stressed situations, the Bank has in place a policy, which provides a
framework for conducting the Stress Tests at periodic intervals and
initiating remedial measures wherever warranted. The scope of the tests is
constantly reviewed to include more stringent and new scenarios.
L.3 Credit Risk Management:
* Credit Risk Management process encompasses identification, assessment,
measurement, monitoring and control of the Credit Exposures. Well-defined
basic risk measures such as CRA (Credit Risk Assessment) models, Industry
Exposure norms, Counter-party Exposure limits, Substantial Exposure limits,
etc., have been put in place.
* Credit Risk components such as Probability of Default (PD), Loss Given
Default (LGD) and Exposure at Default (EAD) are being computed.
* Frequency of Stress Tests in respect of Credit Risk has been increased
from Annual to Half-yearly, to identify Credit Risk at an early stage and
to initiate appropriate measures to contain/mitigate Credit Risk.
L.4 Market Risk Management:
* Market Risk Management is governed by the Board approved policies for
investment, Private Equity & Venture Capital, trading in Bonds, Equities,
Foreign Exchange and Derivatives.
* Exposure, Stop Loss, Modified Duration, PV01 and Value at Risk (VaR)
limits have been prescribed. These limits, along with other Management
Action Triggers, are tracked daily and necessary action initiated, as
required, to keep Market Risk within approved limits.
L.5 Operational Risk Management:
* The Bank manages operational risks by having in place and maintaining a
comprehensive system of internal controls and policies.
* The main objectives of the Bank's Operational Risk Management are to
continuously review systems and control mechanisms, create awareness of
operational risk throughout the Bank, assign risk ownership, alignment of
risk management activities with business strategy and ensuring compliance
with regulatory requirements.
* The Operational Risk Management policy of the Bank establishes a
consistent framework for systematic and pro-active identification,
assessment, measurement, monitoring and mitigation of operational risk. The
Policy applies to all business and functional areas within the Bank, and is
supplemented by operational systems, procedures and guidelines which are
periodically updated.
L.6 Group Risk Management:
* The State Bank Group is recognised as a major Financial Conglomerate and
as a systemically important financial intermediary, with significant
presence in various financial markets.
* Accordingly, it is imperative, both from the regulatory point of view as
well as from the Group's own internal control and risk management point of
view, to oversee the functioning of individual entities in the Group and
periodically assess the overall level of risk in the Group. This
facilitates optimal utilization of capital resources and adoption of a
uniform set of risk practices across the Group Entities.
* The Group Risk Management Policy applies to all Associate Banks, Banking
and Non-banking Subsidiaries and Joint Ventures of the State Bank Group
under the jurisdiction of specified regulators and complying with the
relevant Accounting Standards, where the SBI has investment in equity
shares of 30% and more with control over management.
* With a view to enabling the Group Entities to assess their material risks
and adequacy of the risk management processes and capital, all Group
members, including Non-banking Subsidiaries are encouraged to align their
policies and practices with the Group, follow Basel prescriptions and
international best practices.
L.7 Asset Liability Management:
* The Asset Liability Management Committee (ALCO) of the Bank is entrusted
with the evolvement of appropriate systems and procedures in order to
identify and analyse balance sheet risks and setting of benchmark
parameters for efficient management of these risks.
* ALM Department, being the support group to ALCO, monitors the Bank's
market risk such as liquidity risk, interest rate risk etc., by analysing
various ALM reports / returns. The ALM department reviews the ALM Policy
and complies with the Bank's / RBI's policy guidelines on an ongoing basis.
* The Market Related Fund Transfer Pricing Mechanism has been implemented
for evaluating the business performance of the branches of the Bank.
L.8 Internal Controls:
The Bank has in-built internal control systems with well-defined
responsibilities at each level. The Bank carries out mainly two streams of
audits - Inspection & Audit and Management Audit covering different facets
of Internal Audit requirement. Apart from these, Credit Audit is conducted
for units with large credit limits and Concurrent Audit is carried out at
branches having large deposits, advances and other risk exposures and
selected BPR Outfits. Expenditure Audit, involving scrutiny of accounts and
correctness of expenditure incurred, is conducted at Corporate Centre
Establishments, Local Head Offices, Zonal Offices, On Locale Regional
Offices, Regional Business Offices, Lead Bank Offices, etc. To verify the
level of rectification of irregularities by branches, audit of compliance
at select branches is also undertaken. The Information System Audit (IS
Audit) of the centralised IT establishments is being conducted.
L.8.1 Risk Focussed Internal Audit (RFIA):
The inspection system plays an important and critical role of introducing
international best practices in the internal audit function which is
regarded as a critical component of Corporate Governance. Inspection &
Management Audit Department undertakes a critical review of the entire
working of auditee units. Risk Focussed Internal Audit, an adjunct to risk
based supervision as per RBI directives, is in vogue in the Bank's audit
system.
L.8.2 Inspection & Audit of branches:
All domestic branches have been segregated into 3 groups on the basis of
business profile and risk exposures. While audit of Group I branches and
credit oriented BPR entities (excepting SARC) is administered by Central
Audit Unit (CAU) at Inspection & Management Audit Department headed by a
General Manager (CAU), audit of branches in Group II & Group III category
and other BPR entities are conducted by ten Zonal Inspection Offices,
located at various Centres, each of which is headed by a General Manager
(I&A). The audit of branches and BPR entities is conducted as per the
periodicity approved by Audit Committee of the Board (ACB) which is well
within RBI norms. During the period from 01.04.2010 to 31.03.2011, 7,871
domestic branches (Group I: 86 Group II: 1,421; & Group III: 6,364) were
audited.
L.8.3 Audit of BPR entities:
In the wake of introducing various BPR initiatives, audit process for the
BPR entities has been developed and introduced. Taking into account the
processes involved in each of the entities, exclusive Audit Report Formats,
with appropriate audit queries, have been introduced. These entities are
being evaluated on risk parameters. During the period from 01.04.2010 to
31.03.2011, 323 BPR entities (Group I: 138 & Group II: 185) were audited.
L.8.4 Cluster Audit:
A number of Centres have been brought under the gamut of BPR and several
branches are linked with BPR entities. To be able to identify and mitigate
the risk at such branches, where the process is still underway, the
department has introduced an initiative called Cluster Audit' wherein a
simultaneous audit of BPR entities and identified branches linked to the
BPR in a particular centre is taken up . During the period from 01.04.2010
to 31.03.2011, Cluster Audit was conducted in 46 Centres covering 1,188
Branches & 125 BPR entities. This brought to light the audit health of the
centre.
L.8.5 Management Audit:
With the introduction of Risk Focussed Internal Audit, Management Audit has
been reoriented to focus on the effectiveness of risk management in the
processes and the procedures followed in the Bank. Management Audit
universe comprises of Corporate Centre Establishments; Circles / Apex
Training Institutions, Associate Banks; Subsidiaries (Domestic / Foreign);
Joint Ventures (Domestic / Foreign), Regional Rural Banks sponsored by the
Bank (RRBs). During the period from 01.04.2010 to 31.03.2011, Management
Audit of 45 domestic offices/establishments was carried out.
L.8.6 Credit Audit:
Credit Audit aims at achieving continuous improvement in the quality of
Commercial Credit portfolio of the Bank through critically examining
individual large commercial loans with exposures of Rs. 5 crores and above.
Credit Audit System (CAS), which has been aligned with Risk Focussed
Internal Audit, assesses whether the Bank's laid down policies in the area
of credit appraisal, sanction of loans and credit administration are
meticulously complied with. CAS also provides feedback to the business unit
by way of warning signals about the quality of advance portfolio in the
unit and suggests remedial measures. It also comments on the risk rating
awarded and whether it is in order. Credit Audit carries out a review of
all individual advances above the cut off limit within 6 months of
sanction/enhancement/ renewal as off-site audit and a post sanction audit
once in 12 months as on-site. During the period 01.04.2010 to 31.03.2011,
Credit Audit (on-site) was conducted in 456 Branches, covering 5,733
accounts with aggregate exposures of Rs. 5,72,958 crores. Credit Audit
(Off-site) was conducted in 14 Circles (including MCROs/CAG functioning in
the geographical area of the respective Circles) during the same period,
covering 6,875 proposals (domestic) with aggregate exposure of Rs. 8,43,864
crores.
L.8.7 Information System Audit:
Since April 2006, all the Branches are being subjected to Information
Systems (IS) audit to assess the IT related risks as part of audit of the
branch. A Handbook on Self Audit of Information Systems' was introduced to
facilitate branches for evaluating the efficiency level of IT systems. IS
Audit of centralised IT establishments has commenced in January 2007.
During the period from 01.04.2010 to 31.03.2011, IS Audit of 40 centralised
IT establishments was completed.
L.8.8 Foreign Offices Audit:
Home Office Audit was carried out at 40 Branches / offices during
01.04.2010 to 31.03.2011, which included Inspection and Audit of 31
Branches, Management Audit of 4 Representative offices, 1 Subsidiary and 4
Regional Offices.
L.8.9 CONCURRENT AUDIT SYSTEM:
Concurrent Audit system is essentially a control process integral to the
establishment of sound internal accounting functions, effective controls
and overseeing of operations. It works as a tool for the Controllers of
operations for scrutiny of day-to-day operations. Concurrent Audit System
is reviewed on an on-going basis as per the RBI directives so as to cover
30-40% of the Bank's Deposits and 60-70% of the Bank's Advances and other
risk exposures. Inspection & Audit department prescribes the processes,
guidelines and formats for the conduct of concurrent audit at branches and
BPR entities. As on 31.03.2011, the system covers 30.15% of deposits and
75.21% of advances and other risk exposures of the Bank.
L.9 Vigilance:
The main objective of vigilance activity in the Bank is not to reduce but
enhance the level of managerial efficiency and effectiveness in the
organization. Risk taking is integral part of the banking business.
Therefore, every loss does not necessarily become subject matter of
vigilance enquiry. Motivated or reckless decisions that cause damage to the
Bank are essentially dealt as vigilance ones. While vigilance aims at
punishing the delinquent employees, it also protects the legitimate and
bonafide business decisions taken by them and any other action devoid of
malafides. The Vigilance Department in the Bank functions on these
principles.
Based on the principle 'Prevention is Better Than Cure', the Vigilance
Department is actively involved in the preventive measures, which aim at
taking steps, which are essential for avoiding recurrence of similar nature
of frauds in the Bank. At the same time, Vigilance department is taking
proactive measures to prevent the incidences of frauds arising in CBS
environment.
Considering the size of the Organization, we have set up vigilance
departments at each of the 14 Circles, headed by Deputy General Managers.
At Corporate Centre, Vigilance set up is headed by Chief Vigilance Officer
of the rank of Chief General Manager. The department reports to the
Chairman directly and conducts its affairs independently. The guidelines of
the Central Vigilance Commission (CVC) are followed in letter and spirit in
its functioning.
M. CUSTOMER SERVICE & CORPORATE SOCIAL RESPONSIBILITY:
M.1. CUSTOMER SERVICE:
* Several transformation exercises for different categories of employees
were conducted such as Parivartan', SBI Citizen', Udan', Jagruti' etc.
towards better understanding of interpersonal relationships mainly with the
customers. The Grievance Redressal Policy of the Bank is formulated on
the basis of the Model Policy Framed by Indian Banks' Association and
provisions of the revised Code of Commitments to Customers released by
Banking Codes and Standards Board of India in August 2009.
Branches are required to redress customer grievances within three weeks of
receipt against the time limit of 30 days prescribed in the Code.
* The Standing Committee on Customer Service constituted at the Local Head
Offices with representatives from customers including Senior Citizens
review the overall position of Customer Service in the Circle. Analysis of
the consolidated data for Customer Grievances for all Circles is being put
up to the Customer Service Committee of the Central Board every quarter to
identify common systemic issues that require rectification, and also review
the remedial measures taken by the Bank for improving the Customer Service.
* The Contact Centre of the Bank has been enhanced to provide wholesome
help to customers including
* Enquiries on products and services,
* Account related information, balance enquiry,
* ATM card related information including blocking of cards,
* Income tax refund related queries,
* Demat account information,
* Pension related information to pensioners.
* A web based Complaint Management System (CMS) launched in December 2009
helps customers to register their ATM related complaints at the Toll Free
number of Contact Centre. The complaints are resolved by the ATM Switch
Centre and branches within RBI stipulated time limit of 12 days. As pension
related complaints continue to be the major area of complaints, CMS
facility has now also been extended for acceptance of complaints relating
to pensions, deceased accounts, Lockers and NRI accounts.
* The Bank has launched a mobile and web based service for customer
grievance redressal - SMS Unhappy Service'. Any customer, who wants to
lodge a complaint, sends an SMS 'UNHAPPY' to a specified number. The Bank
responds to the SMS by calling back to the customer on the same mobile
number and records the details of the complaint and sends to respective
Branches who are required to advise resolution within 48 hours.
M.2. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Corporate Social Responsibility has been a part of the State Bank of India
since 1973 under the name of Community Service Banking covering various
social, environmental and welfare activities.
The stated CSR Philosophy is as follows:
* The Bank is a corporate citizen, with resources at its command and
benefits which it derives from operating in society in general. It,
therefore, owes a solemn duty to the less fortunate and under-privileged
members of the same society.
* Staff members are encouraged to make their contribution by understanding
the aspirations of the public around them and by endeavouring to evolve
measures to remove indisputable social and developmental lacunae. This will
lead to their self-development and improvement of the Bank's image besides
development of the Community.
During the financial year 2010-2011, numerous welfare and social activities
were implemented both in Banking and Non-Banking areas with the basic aim
of raising the quality of life in the community, especially in and around
the area of operation of the branches. Particular attention was given to
ameliorating the condition of the downtrodden and under privileged common
man.
Currently, the focus areas under Community Service Banking are:
* Health
* Education
* Adoption of the Girl Child
* Women's empowerment
* Child development
* Welfare and rehabilitation of poor and handicapped
* Assistance to poor and under privileged
* Entrepreneur development programmes
* Vocational guidance
* Thrust for assistance to IT education in Rural/Tribal/unreached areas
* Environment Protection
* Assistance during natural calamities
Projects during 2010-11:
a) Natural Calamities:
Donations amounting to Rs. 2 crores were made to UP Chief Minister's Relief
Fund for providing relief and rehabilitation to victims of Natural
Calamities.
b) Community Service Banking:
2,547 projects have been assisted with Rs. 25.95 crores covering the areas
of Health, Education, Assistance for Sports, Handicapped, Environment and
Assistance to tribals & other underprivileged members of society.
c) Adoption of the Girl Child:
Society's preference for the boy child has resulted in a large number of
instances when the girl child is deprived of familial attention, education,
affection, healthcare and in extreme cases, even food. In order to
supplement the efforts of the Govt., to change this concept, branches adopt
Girl Children in the age group of 6 to 14 years, who are orphans /
destitute / physically handicapped / belong to poor families.
This initiative started in 2008 with 8,338 children has in its role 17,627
girl children at present with an assistance of Rs. 3.49 crores extended
during the year 2010-11 under Community Service Banking.
Apart from financial assistance, individual employees from the Bank /
spouses of employees adopt one or two children for care, mentoring,
counselling, to try and fulfil the role of a guide. This includes periodic
visits to the schools by Staff Members, talking to the girl child to
understand her difficulties, academic or otherwise, and offering solutions.
A close liaison is also maintained with the teachers and the academic
progress of the girl child is monitored. If felt necessary, timely
corrective action is suggested.
While gradually increasing the coverage, the Bank has emphasised that
individual care and attention to the adopted children as originally
envisaged, should not be diluted.
d) Research & Development Fund:
The Bank set up the Research & Development Fund in 1977 with the primary
objective of supporting research work relevant broadly to the activities of
the Bank.
In the year 2010, State Bank of India Chair on Energy and Environment has
been instituted for Rs. 50 lac in IIT Kanpur with particular emphasis
towards innovations in the field of solar energy. This step demonstrates
Bank's concern for energy and environmental issues.
Besides, the Bank has also made an annual contribution of GBP 100,000
towards a Chair set up by the Bank jointly with RBI at the Asia Research
Centre at London School of Economics. An amount of Rs. 2 crores has been
earmarked for SBI Chair for Public Leadership' set up in Indian School of
Business, Hyderabad.
M.3. SBI CHILDREN'S WELFARE FUND:
The Fund was set up with donations from the employees of SBI with matching
contributions from the Bank to assist underprivileged and poor children in
their overall development. During the year 2010-11, 6 projects were
assisted with Rs. 5.62 lac.
M.4. EDUCATION PARTNERING WITH MCGM:
The Municipal Corporation of Greater Mumbai (MCGM) has launched a project
to transform and upgrade the outcome of education in schools run by the
Municipal Corporation. The Bank has agreed to support this project as a
partner for a period of 2 years as this project may evolve as a model for
replication across the country. Contribution to the tune of Rs. 3.97 crores
has been made by the Bank towards this project in 2010-11.
M.5. SBI YOUTH FOR INDIA:
(Harnessing Youth Power for Rural Development)
SBI Youth for India is a fellowship programme initiated, funded and managed
by the State Bank of India in partnership with reputed NGOs.
The Programme seeks to help India secure an equitable and sustainable
growth path by: Providing educated Indian youth with an opportunity to
touch lives and create positive change at the grass root level in rural
India.
Providing NGOs working on development projects in rural India with educated
manpower whose skill sets can be used to catalyze rural development.
* Promoting a forum for the Programme alumni to share ideas and contribute
to rural development throughout their professional life.
Project Work:
* The selected candidates are assigned a project according to their
interest/skill and as per the need of the respective NGO.
* Throughout the project, they will be provided a mentor from the partner
NGO who will help them to address the challenges in the project assigned.
* In consultation with their mentor, they will have to define an outcome
that they intend to achieve at the end of the project and will then have to
work towards it.
The programme offers the candidates a wide variety of projects to choose
from. The project will cover a whole gamut of areas like Cluster
Development, Watershed Development, Environment Protection, Biotechnology,
Computer Literacy, Women's Empowerment, Dairy Husbandry, Bio-Diversity,
Eco-Technology, Insurance, Coastal Research Systems etc.
The Bank seeks to make a lasting impact in the rural scenario through this
program.
N. CORPORATE COMMUNICATION & CHANGE:
* Following the earlier Parivaritan initiatives, Intervention II & III
under Citizen SBI, were implemented during the year. While Intervention II
emphasized on the collective fulfillment, Intervention III was about
identifying opportunities, thereby paving the way for business development
and lasting relationships.
* The Intervention IV was conceived as a Senior Management Citizenship
Vision Programme to bring about recognition of the critical changes
required in SBI by way of policies/processes.
O. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005):
Suitable structure has been put in place at Branches/Administrative Offices
/ Regional Business Offices/Local Head Offices for handling requests and
appeals under RTI Act 2005. Further, an exclusive RTI Department' has been
created in Corporate Centre to handle and co-ordinate various issues under
the Act. For convenience of the public, the Bank has also created an RTI
link on its website http://www.statebankofindia.com and
http://www.sbi.co.in.
P. HUMAN RESOURCES (HR):
HR INITIATIVES:
A number of key initiatives have been taken by the Bank during the current
year to motivate the employees to perform better so as to achieve the
Bank's growth plans.
PERSONNEL MANAGEMENT:
* Defined Contribution Pension Scheme (DCPS) was introduced for all
categories of employees recruited w.e.f 01.08.2010.
* Pursuant to Industry-wise settlement / Joint Note dated 27.04.2010,
pension benefits will be extended to the Retirees of e-SBS and e-SBIN, who
opt for pension as the second option.
* Revision made in Terms & Conditions of Contractual officers-Management
Trainees, Chartered Accountants, Credit Analysts (WB/CAG) and Customer
Relationship Executives (WB/MCG).
CADRE MANAGEMENT:
* Policy for recruitment of Probationary Officers (POs) reviewed and
methodology of one-tier written examination in respect of POs for SBI &
Associate Banks was made applicable to reduce the cycle of recruitment.
* 3,746 Probationary Officers were recruited during the year, out of which
2,294 POs have joined the Bank till 31.03.2011.
* Contractual employees viz. CRE(PB), CRE(ME), OMRs etc. were absorbed in
the Bank as permanent officers in Junior Management Grade as one time
measure.
* 487 Management Executives recruited directly in MMGS-II grade to meet the
specialized needs of the Bank.
Recruitment:
* 25,327 clerical staff were recruited during the year out of which 18,628
have joined the Bank till 31.03.2011. This is the largest recruitment
exercise undertaken in the Banking sector and will further augment the
staff strength in tandem with the Bank's branch expansion drive and
manpower requirement on account of promotion and retirement etc. 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 Industrial Relations was maintained with both the Officers'
and Staff Federations by maintaining healthy dialogue / discussions with
them during the year. Issues raised by the Federations were properly
examined and adequately responded to.
HRMS:
* Salary processing for 2.05 lac employees across SBI and pension
processing of 1.12 lac IBI/SBI Pensioners have been centralised.
* The Training Management System, Centralised PF accounting & processing,
leave and attendance management, fixed assets management etc. will improve
the employee management and also make the HR processes more efficient.
STRATEGIC TRAINING UNIT:
The Strategic Training Unit (STU), operationalized on 5th April 2010, has
taken a number of initiatives towards giving a new dimension to the
training philosophy of the Bank. Some of the major initiatives in this
regard are as follows:
* A website of STU has been launched to which the entire training system
has been linked.
* Under the leadership Pipeline, Jagriti Programme was launched covering
all AGMs having more than 2 years of residual service.
* E-learning through HRMS portal has been expanded over 158 courses
currently.
* A new initiative in Distance Learning has been taken by SBSC by
introducing Mobile Learning.
STAFF STRENGTH AS ON 31.03.2011:
Category Total %
Officers 79,728 35.77
Clerical 1,02,701 46.07
Sub-staff 40,504 18.16
TOTAL 2,22,933 100.00
IMPLEMENTATION OF PERSONS WITH DISABILITIES (PWD) ACT 1995:
Our Bank provides reservation to persons with disabilities (PWDs) as per
the guidelines of the Government of India and section 33 of the PWD Act
1995. The total number of persons with disabilities who were employed as on
31.03.2011 was 2,525, consisting of 530 officers, 1,754 clerical and 241
sub-staff.
REPRESENTATION OF SCHEDULED CASTES AND SCHEDULED TRIBES:
As on the 31st March 2011, 43,657 (19.58%) of the Bank's total staff
strength, belonged to Scheduled Caste and 15,812 (7.09%) belonged to
Scheduled Tribes.
In order to discuss issues relating to reservation policy and effectively
redress the grievances of the SC/ST employees, Liaison Officers have been
designated at all Local Head Offices of the Bank as also at the Corporate
Centre at Mumbai.
Senior officials of the Bank hold regular meetings at periodic intervals
with the representatives of National Federation of SBI SC/ST Employees at
Corporate Centre as also with the representatives of Circle level SC/ST
Welfare Associations at the Local Head Offices and Administrative Offices
where issues pertaining to implementation of reservation policies are
discussed. This has ensured redressal of grievances to a large extent.
Government of India representative inspected the reservation roasters for
SCs/STs/OBCs/ PWDs at all the 14 Circles and found this maintained
satisfactorily. The Bank has been conducting workshops on reservation
policy for SCs/STs/OBCs to impart up-to-date knowledge/ latest operatives
about the reservation policy and related areas to the SC/ST cell officers,
representatives of SC/ST welfare Association and the Liaison officers.
Pre-recruitment and pre-promotion training programmes are being conducted
to enable SC/ST candidates to achieve the prescribed standards to
effectively compete with other candidates.
Q. BUSINESS PROCESS RE-ENGINEERING (BPR):
Following various BPR initiatives carried out during the last few years,
the Bank was able to improve performance in key business areas and quality
of customer service. Many of the large sized branches have been split into
smaller branches to enable them to offer focused service to specific
segment of customers.
The endeavour of BPR initiatives in the Bank is to continuously usher in
changes / uniform business processes to ensure prompt, efficient delivery
of products and services to our customers. All these initiatives have
helped the Bank in creating a new operating architecture capable of meeting
global competition.
R. OFFICIAL LANGUAGE:
The implementation of official language policy in the Bank is not only a
statutoryrequirement but also a business need. The Bank made all possible
efforts to comply with the statutory provisions relating to the official
language policy of the Govt. of India during the year and took several
initiatives to provide benefit of Bank's different schemes to the masses
through Hindi and other Indian languages.
Many special workshops were conducted for newly recruited clerical staff
and Probationary Officers to equip them with functional knowledge of the
official language Hindi. In order to encourage the staff to use Hindi in
their day to day work, Quarterly Shabdavali Smaran and many more
competitions were organised during the year.
Bank has enhanced the amount of honorarium paid to staff members on passing
different Hindi exams. Many staff members have taken advantage of these
incentive schemes which will help in encouraging the use of Hindi in the
Bank.
Bank hosted quarterly meetings of the Ministry of Finance and Reserve Bank
of India and an Annual Conference of all the public sector banks and
financial institutions successfully during the year which received lavish
appreciation from these two regulatory authorities.
On the other hand, the Bank took various initiatives in its endeavour to
deliver its products and services to the masses in Hindi and other Indian
languages. These include advertisements through Newspapers/ Magazines,
pamphlets (Print Media) through Electronic Medium (TV/Films etc.) and also
by way of Exhibition (Banner, Hoardings etc.) in Hindi and other Indian
regional languages.
The Committee of Parliament on Official Language also appreciated the
efforts being made by the Bank for promoting the use of Hindi.
Bank's In-House Hindi magazine Prayas' has once again bagged first prize
for the year 2009-10. Bank's Hindi House Journal Prayas' has bagged first
prize in this competition for the fifth time in recent years.
S. KYC/AML/CFT MEASURES:
* The Bank has put in place the Board approved revised policy on Know Your
Customer (KYC) / Anti Money Laundering (AML) / Combating Financing of the
Terrorism (CFT) measures in line with Master Circular issued by Reserve
Bank of India on the subject. The main components of the Policy are as
follows:
* Customer Acceptance
* Customer Identification
* Monitoring of Transactions
* Training of personnel
* Preservation of Records
* Procedural Guidelines to facilitate implementation of the Policy have
also been circulated after approval of the Central Board.
* Monitoring of Transactions is done with a view to submit undernoted
reports to Financial Intelligence Unit-India mandated by rules of
Prevention of Money Laundering Act, 2002.
* Cash Transaction Reports (CTRs)
* Counterfeit Currency Reports (CCRs)
* Suspicious Transaction Reports (STRs)
* Training on KYC/AML is being imparted on an ongoing basis in the Bank. In
addition to exclusive KYC/AML programmes, all training programmes /
seminars / workshops, have a KYC/AML session included in the programme.
Further, the Bank has decided to observe 1st August every year as 'KYC
Compliance and Fraud Prevention day' to maintain appropriate awareness and
involvement levels across the Bank as also to create proper understanding
of KYC issues among the members of public.
T. FRAUD PREVENTION AND MONITORING:
The measures taken for prevention of frauds are as under:
* The KYC Compliance and Fraud Prevention day was observed on 2nd August
2010, as 1st August was Sunday.
* The Bank has introduced detailed process of tallying Admin Cash Balance
with Physical Cash balance in ATM.
* SBIMF Warrants are being paid through Dividend Warrant Payment Module'
on CBS and not by purchasing Warrants as DDP.
* The Preventive Vigilance Committees are formed at the branches having
staff strength of 10 or more (including SAM branches) and at CPCs/Cells
irrespective of their staff strength, as per the revised scheme approved by
the Vigilance Department at Corporate Centre.
* Encourage/popularize Whistle Blower' concept.
* Advise Controllers to ensure that secrecy of passwords is not
compromised.
* Fraud Analysis Cell (FAC) has been created at Jaipur to monitor
transactions through alerts being thrown by the software.
* Ensure swift conclusion of staff accountability exercise, especially in
cases with insider involvement.
U. COMPENSATION POLICY FOR DEFICIENCY IN SERVICE:
As a premier Bank of the nation, SBI always strives to create and maintain
highest standards of customer service and in any unlikely event of any
slippage in services extended to customers, the Bank has put in place a
Board approved Compensation Policy to compensate for such slippages. The
policy ensures that appropriate financial compensation is provided to the
recipients to these services, without requesting for it.
V. BANK'S OUTSOURCING POLICY:
RBI have permitted banks to outsource non-core functions and the Bank has
accordingly put in place a Board approved Outsourcing Policy.
W. SUPER CIRCLE OF EXCELLENCE (SCE):
The concept of Super Circle of Excellence (SCE) has been conceived to
impart focus on a subset of branches to deliver high growth, improve
efficiency, ensure high quality of customer service and also act as a forum
for sharing of best practices.
As on 31.03.2011, there were 703 branches in Super Circle of Excellence,
which include 592 NBG branches (339 Metro branches + 253 Urban branches)
and 111 RBG branches (27 Rural + 84 Semi Urban).
The SCE branches focus mainly on Retail business and the performance in all
focus areas is benchmarked with the performance of non-SCE branches of the
Bank as well as competitor banks. The focus of this subset is also on
marketing and promotion of technological products, increasing cross selling
and other income, containment of overheads & NPAs, providing customer
service of the highest order, strengthening HNI customer base, pushing for
Financial Planning & Advisory Services and devising strategies to improve
the Bank's Market Share. The performance of SCE branches is measured every
month on a multi dimensional efficiency matrix.
While the share of SCE branches in terms of number of branches has come
down from 5.64% in March 2010 to 5.22% in March 2011, the contribution to
overall Bank business has increased from 12.34% to 12.41% in PER Domestic
deposits, 16.44% to 17.98% in PER advances and 13.11% to 16.11% in cross
selling income.
X. GREEN BANKING INITIATIVES:
* As part of the Bank's on going 'Green Banking' initiatives, windmill
project has been successfully commissioned and power thus generated is
being consumed by our branches/offices in the States of Maharashtra,
Gujarat and Tamilnadu. This reduces dependence on polluting thermal power
to the extent of renewable power generated by the Bank's windmills.
* The imperatives of sustainable usage of resources, including energy and
efficient disposal of wastes have been effectively propagated amongst the
stakeholders, in the form of adopting energy efficiency measures, efficient
usage of paper and water, installation of Solar ATMs, introduction of Green
Channel Banking (Paperless Banking).
* The Bank has been encouraging customers by extending project loans on
concessionary interest rates to reduce Green House gases (GHGs) emissions;
by adopting efficient manufacturing practices through acquisition of latest
technology. The Bank also arranges consultancy services by roping in the
services of empanelled CDM consultants in CDM (Clean Development Mechanism)
registration process. The Bank has also launched a loan product to
facilitate upfront finance to the project developers by way of
securitisation of Carbon Emission Reduction (CER) receivables.
* The Bank has initiated a pilot project to determine its Carbon footprint
levels, which will help in determining the Bank's resource consumption
pattern and enable the Bank to take effective steps to implement various
measures for sustainable usage in a cost effective way.
* Special drive for fruit bearing tree plantation during monsoons was taken
up across all Circles, which has been very successful and sustained efforts
are being made to ensure the survival of the plants as well.
RESPONSIBILITY STATEMENT:
The Board of Directors hereby states:
i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. that they have selected such accounting policies and applied them
consistently and made judgements and estimates as are reasonable and
prudent, so as to give a true and fair view of the state of affairs of the
Bank as on the 31st March 2011, and of the profit and loss of the Bank for
the year ended on that date;
iii. that they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Banking Regulation Act, 1949 and State Bank of India Act, 1955 for
safeguarding the assets of the Bank and preventing and detecting frauds and
other irregularities; and
iv. that they have prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENT:
During the year, Shri S.K. Bhattacharyya, Managing Director, (under section
19(b)) ceased to be a director on the Bank's Board consequent to his
superannuation on 31st October 2010. Further, consequent to the amendment
to Section 20(3A) of SBI Act, 1955 restricting the term of office of
Directors nominated under section 19(d) by Govt. of India to three years
coming into force with effect from 15th September 2010, Dr. Deva Nand
Balodhi and Prof. Md. Salahuddin Ansari ceased to be directors from the
Central Board as on that date.
Shri Ashok Chawla, Govt. Nominee, ceased to be a director on the Bank's
Central Board consequent to his superannuation on 31st January 2011. Dr.
(Mrs.) Vasantha Bharucha's term of three years, as Director on the Central
Board, ended on 24th February 2011. Shri O.P. Bhatt, Chairman, retired on
attaining superannuation, as at the close of business on 31.03.2011.
Shri G.D. Nadaf was nominated to the Board under Section 19 (cb) with
effect from 4th November 2010 as Officer Employee Director. Shri Shashi
Kant Sharma was nominated as Govt. Nominee Director, under Section 19(e),
vide Notification dated 18th February 2011 vice Shri Ashok Chawla. Shri
Rashpal Malhotra was nominated to the Board under Section 19(d) with effect
from 10th May 2011 by Central Govt.
The Directors place on record their appreciation of the contribution made
by Shri O.P. Bhatt, Shri S.K. Bhattacharyya, Dr. Deva Nand Balodhi, Prof.
Md. Salahuddin Ansari, Shri Ashok Chawla & Dr. (Mrs.) Vasantha Bharucha to
the deliberations of the Board and welcome Shri G.D. Nadaf, Shri Shashi
Kant Sharma and Shri Rashpal Malhotra on the Board.
The Directors also express their gratitude for the guidance and cooperation
received from the Government of India, RBI, SEBI, IRDA and other government
and regulatory agencies.
The Directors also thank all the valued clients, shareholders, banks and
financial institutions, stock exchanges, rating agencies and other
stakeholders for their patronage and support, and take this opportunity to
express their appreciation of the dedicated and committed team of employees
of the Bank.
For and on behalf of the
Central Board of Directors
Pratip Chaudhuri
Date : 17th May, 2011 Chairman |