Case study of SBI Bank

State Bank Of

India

History of SBI

It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. SBI, a bank with 60% government stake, is India’s largest commercial bank and the 43rd largest bank in the world. As of March 2012, it had assets of US$360 billion and 14,119 branches, including 157 foreign offices in 32 countries across the globe making it the largest banking and financial services company in India.It along with its five associate banks and 22 subsidiaries, which constituted the State Bank Group, had more than 267,000 employees; a pan India network of over 18,000 branches, and 25,000 ATMs; and delivered profits of $2.6 billion. Pratip Chaudhuri is the chairman of SBI.

The Changing Banking Environment

SBI embarked on an expansion spree, growing its network from around 500 branches in the 1960s to over 8,000 by the 1990s. It played an important role in developing India’s rural regions, providing financing for modernizing the country’s agricultural industry. In the 1990s, SBI transitioned from a manual ledger system to computerized back office operations and branches.

A.K. Purwar was the CHAIRMAN Of SBI, was sailing the ship through hard times.SBI has been slowly but steadily losing market share to competitors. Deposits have been particularly hard hit, with its share in total bank deposits coming down from 18.72 per cent in March 2004 to 15.21 per cent by December 2005. With buoyant demand for credit, slowing deposit growth is the last thing that any bank wants.

The Transformation journey led by O.P. Bhatt

Ex-Chairman of SBI

In 2006, when OP Bhatt (Bhatt) was appointed Chairman of India's leading bank State Bank of India (SBI), the bank was confronting a host of problems. A new chairman, a new vision. O.P. Bhatt, the chairman of the State Bank of India (SBI), has lost no time in jettisoning his predecessor A.K. Purwar‘s strategies, replacing them with more hard-nosed, down-to-earth goals

Bhatt described SBI’s status at that point in time

SBI was also losing customers to its competitors. Bhatt explained the reasons, “Customer were neither respected nor treated well.” The bank’s employees were not energized anymore. They had lost their pride and sense of belonging. SBI’s weak technology backbone compounded its problems. Problems with the system—poor connectivity and its complexity meant that it was actually damaging our ability to serve customers. The senior management believed that “private is better” and were resigned to the fact that SBI would soon surrender its leadership position. Though it was the market leader, it was facing tough competition from private players such as ICICI Bank, HDFC Bank, etc.

The Transformation Journey

The top management team led by Bhatt recognized the need for a transformation. Bhatt and the top management team soon put a transformation agenda in place. For the various transformational initiatives to succeed, Bhatt realized that it would have to have the support of employees at all levels of the organization and thus the Parivartan project was launched.

TRANSFORMATIONAL MOVES OF O.P BHATT

The top management team led by Bhatt recognized the need for a transformation. Bhatt and the top management team soon put a transformation agenda in place. For the various transformational initiatives to succeed, Bhatt realized that it would have to have the support of employees at all levels of the organization and thus the Parivartan project was launched. Parivartan‟ – which was the brainchild of Mr. Bhatt and is hailed by the industry, as the largest ever programmed of its kind, covered 1,30,000 employees of SBI in 100 days.

Project Parivartan aims at making the bank customer-centric, bring about a shift from transaction banking to relationship banking, focus on cross selling(Selling of banks products/services to an already existing customer), and provide alternate channels like ATM and internet banking. 

The project also sought to bring about a change in the attitude and approach of the employees and to help them develop a more customer-centric approach.

WORK CULTURE

Bhatt and his managers came up with a tool: a Tree of Fulfillment that each employee had to fill up. The Tree had explicit fruits of employment like money, promotions, and rewards, along with implicit fruits like personal growth, satisfaction from helping a needy person, social interactions, and relationships. They got in touch with their own inner purpose and aspirations. SBI also introduced an Employee Share Purchase Scheme to which everybody from the messenger to the Chairman could subscribe.

Business Initiatives

Win back the Indian Middle Class ConsumerSBI had to change its image to be relevant to the youth and the Indian middle class and for this, it had to change its image. Therefore, we did a series of campaigns with a theme “Pure Banking Nothing Else.” Eventually we moved on to “Banker to every Indian.” The current campaign is, “Proud to be an Indian”.it is an advertisement by an institution. SBI also made a conscious effort to attract younger customers. The first step towards this was to reduce the average age of its employees, most of who were over 45. The bank therefore started recruiting employees directly from campus.

Winning IT Platform

In three years, Bhatt completed the reengineering exercise. SBI shifted from decentralised system to centralized system.

A centralized  system is:• One in which the records for several people or units are

located in one, central location; and,

CHANGING SCENARIO OF S.B.I

• SBI has opened 1,000 branches and 10,000 ATMs.• STATE BANK OF SAURASHTRA merger with SBI • GENERAL INSURANCE

State Bank of India signs joint venture agreement with Insurance Australia Group

• Taking Microfinance Initiatives

Microfinance SBI has been actively involved in the microfinance sector as it serves both the social and commercial objectives of the bank.

Conclusion

State Bank of India is the country's premier financial institution. It is a crucial wheel in the economy with the ability to move markets. For Bhatt has put the bank on a high growth path.