BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955.

Bank of Calcutta

The Bank of Calcutta (a precursor to the present State Bank of India) was founded on June 2, 1806, mainly to fund General Wellesley's wars against Tipu Sultan and the Marathas. It was renamed Bank of Bengal on January 2, 1809.

It was the first bank of India. The Bank of Calcutta, and two other Presidency banks, namely, the Bank of Bombay and the Bank of Madras were amalgamated and the reorganized banking entity was named the Imperial Bank of India on 27 January 1921. The Reserve Bank of India, which is the central banking organization of India, in the year 1955, acquired a controlling interest in the Imperial Bank of India and the Imperial Bank of India was christened on 30 April 1955 as the State Bank of India.

Bank of Bombay

Bank of Bombay was the second of the three presidency banks (others being the Bank of Calcutta and the Bank of Madras) of the Raj period. It was established, pursuant to a charter of the British East India Company, on 15th April, 1840. The bank was headquartered in Bombay, now called Mumbai.

The Bank of Bombay undertook all the normal activities which a commercial bank was expected to undertake. The Bank of Madras, in the absence of any central banking authority at that time, also conducted certain functions which are ordinarily a preserve of a central bank.

The Bank of Bombay, and two other Presidency banks, namely, the Bank of Calcutta and the Bank of Madras were amalgamated and the reorganized banking entity was named the Imperial Bank of India on 27 January 1921. The Reserve Bank of India, which is the central banking organization of India, in the year 1955, acquired a controlling interest in the Imperial Bank of India and the Imperial Bank of India was christened on 30 April 1955 as the State Bank of India.

The Bank of Madras

The Bank of Madras, one of the three Presidency Banks, the other two being, the Bank of Bengal and the Bank of Bombay, was established on 1 July 1843, and was headquartered in Madras, now Chennai. It is now subsumed in the State Bank of India.

Origin

In 1683, Governor William Gyfford (1681-1687) and his Council in Madras established a bank. In 1805, Governor Sir William Bentinck convened a Finance Committee that recommended the formation of a government bank; the Madras Bank, which was sometimes called the Government Bank, began functioning from February 1, 1806.

The Bank of Madras was formed in 1843 as a joint stock company with a capital of Rs.3 million by the amalgamation of Madras Bank, Carnatic Bank (1788), the British Bank of Madras (1795), and the Asiatic Bank (1804). Bank of Madras had a branch network spread into all the major cities and trade centers of South India, including Bangalore, Coimbatore, Mangalore, Calicut, Tellicherry, Cochin, Alleppy, Cocanada, Guntur, Masulipatnam, Ootacamund, Nagapatnam, and Tuticorin. It also had a branch in Colombo, British Ceylon, now called Sri Lanka.

Activities

The Bank of Madras undertook all the normal activities that are common to a commercial bank. The Bank of Madras, in the absence of any central banking authority during that time, also conducted certain functions that are ordinarily a preserve of a central bank. These included managing the banking business of the Presidency of Madras and offices of the colonial government of India located in South India, and managing the Public Debt Office of the Government of Madras.

Milestone

The Head Office of the Bank of Madras was shifted to a new building, on South Beach Road, Madras, in 1897. The site was acquired for Rs. 100,000 in 1895, building was designed by Col. Samuel Jacob, and suitably modified and adapted by Henry Irwin (1841-1922), and constructed by Namperumal Chetty, a reputed builder, for Rs. 300,000. The building is an exquisite example of Victorian architecture. Currently, the building houses several Offices of State Bank of India, Chennai.

Epilogue

The Bank of Madras merged with the two other Presidency banks - the Bank of Calcutta and the Bank of Bombay - on 27 January 1921 and the reorganized banking entity took on the name Imperial Bank of India. In 1955 the Reserve Bank of India, which is the central banking organization of India, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955 the Imperial Bank of India became the State Bank of India.

The Imperial Bank of India

The Imperial Bank of India (IBI) was the oldest and the largest commercial bank of the Indian subcontinent, and was subsequently transformed into State Bank of India in 1955.

Origin

The Imperial Bank of India came into existence on 27 January 1921 when the three Presidency Banks of colonial India, were reorganized and amalgamated to form a single banking entity.

The three Presidency banks were the Bank of Bengal, established on 2 June 1806, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843)

Activities

Imperial Bank of India performed all the normal functions which a commercial bank was expected to perform. In the absence of any central banking institution in India until 1935, the Imperial Bank of India also performed a number of functions which are normally carried out by a central bank.

Milestones

In 1924, at Apollo Street, currently called Mumbai Samachar Marg, Mumbai, a magnificent stone structure with fretted windows, was constructed to house a branch of the Imperial Bank of India.

In 1933, Sir Badridas Goenka, an important public figure and business tycoon of his time, and a prominent member of Marwari community of Calcutta, became the first Indian to be appointed as the Chairman of the Imperial Bank of India.

Epilogue

The Reserve Bank of India, which is the central banking organization of India, in the year 1955, acquired a controlling interest in the Imperial Bank of India, and the Imperial Bank of India was christened on 30 April 1955 as the State Bank of India, and this transformation from the Imperial Bank of India to the State Bank of India was given legal recognition in terms off an Act of the Parliament of India, which came into force from 1 July 1955. The day on which the Imperial Bank of India (IBI) became the State Bank of India, IBI had 480 branches, sub-offices, and three local head offices; and had under its control and command slightly more than a quarter of the resources of the Indian banking industry. The branch network of State Bank of India has since grown to 9093 branches as on 31 March 2004. In 2007 Reserve Bank of India transferred its stake in State Bank of India to Government of India.

RESERVE BANK OF INDIA:

The Reserve Bank of India (RBI) (भा�रती�य रिरज़र्व� बैं क) is India's central banking institution, which controls the monetary policy of the Indian rupee. It was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934. The share capital was divided into shares of rs.100 each fully paid which was entirely owned by private shareholders in the beginning. Following India's independence in 1947, the RBI was nationalised in the year 1949.

The RBI plays an important part in the development strategy of the Government of India. It is a member bank of the Asian Clearing Union. The general superintendence and direction of the RBI is entrusted with the 20-member-strong Central Board of Directors—the Governor (currently Duvvuri Subbarao), four Deputy Governors, one Finance Ministry representative, ten Government-nominated Directors to represent important elements from India's economy, and four Directors to represent Local Boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these Local Boards consist of five members who represent regional interests, as well as the interests of co-operative and indigenous banks.

Contents

1 History o 1.1 1935–1950 o 1.2 1950–1960 o 1.3 1960–1969 o 1.4 1969–1985 o 1.5 1985–1991 o 1.6 1991–2000 o 1.7 Since 2000

2 Structure o 2.1 Central Board of Directors o 2.2 Governors o 2.3 Supportive bodies o 2.4 Offices and branches

3 Main functions o 3.1 Bank of Issue o 3.2 Monetary authority o 3.3 Manager of exchange control o 3.4 Issuer of currency o 3.5 Developmental role o 3.6 Related functions

4 Policy rates and reserve ratios 5 Further reading 6 Notes 7 References 8 External links

History

1935–1950

The old RBI Building in Mumbai

The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after the First World War, The Bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the Hilton–Young Commission. The original choice for the seal of RBI was The East India Company Double Mohur, with the sketch of the Lion and Palm Tree. However it was decided to replace the lion with the tiger, the national animal of India. The Preamble of the RBI describes its basic functions to regulate the

issue of bank notes, keep reserves to secure monetary stability in India, and generally to operate the currency and credit system in the best interests of the country. The Central Office of the RBI was initially established in Calcutta (now Kolkata), but was permanently moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burma's central bank, except during the years of the Japanese occupation of Burma (1942–45), until April 1947, even though Burma seceded from the Indian Union in 1937. After the Partition of India in 1947, the Bank served as the central bank for Pakistan until June 1948 when the State Bank of Pakistan commenced operations. Though originally set up as a shareholders’ bank, the RBI has been fully owned by the Government of India since its nationalization in 1949.

1950–1960

In the 1950s, the Indian government, under its first Prime Minister Jawaharlal Nehru, developed a centrally planned economic policy that focused on the agricultural sector. The administration nationalized commercial banks and established, based on the Banking Companies Act of 1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support the economic plan with loans.

1960–1969

As a result of bank crashes, the RBI was requested to establish and monitor a deposit insurance system. It should restore the trust in the national bank system and was initialized on 7 December 1961. The Indian government founded funds to promote the economy and used the slogan Developing Banking. The Government of India restructured the national bank market and nationalized a lot of institutes. As a result, the RBI had to play the central part of control and support of this public banking sector.

1969–1985

In 1969, the Indira Gandhi-headed government nationalized 14 major commercial banks. Upon Gandhi's return to power in 1980, a further six banks were nationalized. The regulation of the economy and especially the financial sector was reinforced

by the Government of India in the 1970s and 1980s. The central bank became the central player and increased its policies for a lot of tasks like interests, reserve ratio and visible deposits. These measures aimed at better economic development and had a huge effect on the company policy of the institutes. The banks lent money in selected sectors, like agri-business and small trade companies.

The branch was forced to establish two new offices in the country for every newly established office in a town. The oil crises in 1973 resulted in increasing inflation, and the RBI restricted monetary policy to reduce the effects.

1985–1991

A lot of committees analysed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. The Board for Industrial and Financial Reconstruction, the Indira Gandhi Institute of Development Research and the Security & Exchange Board of India investigated the national economy as a whole, and the security and exchange board proposed better methods for more effective markets and the protection of investor interests. The Indian financial market was a leading example for so-called "financial repression" (Mackinnon and Shaw). The Discount and Finance House of India began its operations on the monetary market in April 1988; the National Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial law improved the versatility of direct deposit by more security measures and liberalisation.

1991–2000

The national economy came down in July 1991 and the Indian rupee was devalued. The currency lost 18% relative to the US dollar, and the Narsimahmam Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This turning point should reinforce the market and was often called neo-liberal. The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets. This

first phase was a success and the central government forced a diversity liberalisation to diversify owner structures in 1998.

The National Stock Exchange of India took the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base. The central bank founded a subsidiary company—the Bharatiya Reserve Bank Note Mudran Limited—in February 1995 to produce banknotes.

Since 2000

The Foreign Exchange Management Act from 1999 came into force in June 2000. It should improve the foreign exchange market, international investments in India and transactions. The RBI promoted the development of the financial market in the last years, allowed online banking in 2001 and established a new payment system in 2004–2005 (National Electronic Fund Transfer). The Security Printing & Minting Corporation of India Ltd., a merger of nine institutions, was founded in 2006 and produces banknotes and coins.

The national economy's growth rate came down to 5.8% in the last quarter of 2008–2009 and the central bank promotes the economic development.

Structure

RBI runs a monetary museum in Mumbai

Central Board of Directors

The Central Board of Directors is the main committee of the central bank. The Government of India appoints the directors for a four-year term. The Board consists of a governor, four

deputy governors, fifteen directors to represent the regional boards, one from the Ministry of Finance and ten other directors from various fields.

Governors

The current Governor of RBI is Duvvuri Subbarao. The RBI extended the period of the present governor up to 2013. There are four deputy governors, currently K. C. Chakrabarty, Subir Gokarn, Anand Sinha and Harun Rashid Khan

Supportive bodies

The Reserve Bank of India has four regional representations: North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years by the central government and serve—beside the advice of the Central Board of Directors—as a forum for regional banks and to deal with delegated tasks from the central board. The institution has 22 regional offices.

The Board of Financial Supervision (BFS), formed in November 1994, serves as a CCBD committee to control the financial institutions. It has four members, appointed for two years, and takes measures to strength the role of statutory auditors in the financial sector, external monitoring and internal controlling systems.

The Tarapore committee was set up by the Reserve Bank of India under the chairmanship of former RBI deputy governor S. S. Tarapore to "lay the road map" to capital account convertibility. The five-member committee recommended a three-year time frame for complete convertibility by 1999–2000.

On 1 July 2007, in an attempt to enhance the quality of customer service and strengthen the grievance redressal mechanism, the Reserve Bank of India created a new customer service department.

Offices and branches

The Reserve Bank of India has 4 zonal offices. It has 19 regional offices at most state capitals and at a few major cities in India. Few of them are located in Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, Patna, and Thiruvananthapuram. Besides it has 09 sub-offices at Agartala, Dehradun, Gangtok, Kochi, Panaji, Raipur, Ranchi, Shimla and Srinagar.

The bank has also two training colleges for its officers, viz. Reserve Bank Staff College at Chennai and College of Agricultural Banking at Pune. There are also four Zonal Training Centres at Belapur, Chennai, Kolkata and New Delhi.

Main functions

Reserve Bank of India regional office, Delhi entrance with the Yakshini sculpture depicting "Prosperity through agriculture".

The RBI Regional Office in Delhi.

The regional offices of GPO (in white) and RBI (in sandstone) at Dalhousie Square, Kolkata.

Bank of Issue

Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue Department which is entrusted with the issue of currency notes. The assets and liabilities of the Issue Department are kept separate from those of the Banking Department. Originally, the assets of the Issue Department were to consist of not less than two-fifths of gold coin, gold bullion or sterling securities provided the amount of gold was not less than ₹40 crore (₹400 million) in value. The remaining three-fifths of the assets might be held in rupee coins, Government of India rupee securities, eligible bills of exchange and promissory notes payable in India. Due to the exigencies of the Second World War and the post-war period, these provisions were considerably modified. Since 1957, the Reserve Bank of India is required to maintain gold and foreign exchange reserves of ₹200 crore (₹2 billion), of which at least ₹115 crore (₹1.15 billion) should be in gold and ₹85 crore (₹850 million) in the form of Government Securities. The system as it exists today is known as the minimum reserve system.

Monetary authority

The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates, implements and monitors the monetary policy as well as it has

to ensure an adequate flow of credit to productive sectors. Objectives are maintaining price stability and ensuring adequate flow of credit to productive sectors. The national economy depends on the public sector and the central bank promotes an expansive monetary policy to push the private sector since the financial market reforms of the 1990s.

The institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the country's banking and financial system functions. Objectives are to maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins.

Manager of exchange control

The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.

Issuer of currency

The bank issues and exchanges or destroys currency and coins not fit for circulation. The objectives are giving the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development, because both objectives are diverse in themselves.

Developmental role

The central bank had to perform a wide range of promotional functions to support national objectives and industries. The RBI

faces a lot of inter-sectoral and local inflation-related problems. Some of this problems are results of the dominant part of the public sector.

Related functions

The RBI is also a banker to the government and performs merchant banking function for the central and the state governments. It also acts as their banker. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition. The institution maintains banking accounts of all scheduled banks, too.

Policy rates and reserve ratios

Policy rates, Reserve ratios, lending, and deposit rates as of 17 April, 2012Bank Rate 9.00%Repo Rate 8.00%Reverse Repo Rate 7.00%Cash Reserve Ratio (CRR 4.75%Statutory Liquidity Ratio (SLR) 24.0%Base Rate 10.00%–10.75%Reserve Bank Rate 4%Deposit Rate 8.50%–9.25%

Bank Rate: RBI lends to the commercial banks through its discount window to help the banks meet depositor’s demands and reserve requirements. The interest rate the RBI charges the banks for this purpose is called bank rate. If the RBI wants to increase the liquidity and money supply in the market, it will decrease the bank rate and if it wants to reduce the liquidity and money supply in the system, it will increase the bank rate. As of 13 Feb, 2012 the bank rate was 9.5%.

Cash Reserve Ratio (CRR): Every commercial bank has to keep certain minimum cash reserves with RBI. Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the needs of securing the monetary stability in the country, RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate ( [Before the enactment of this amendment, in terms of Section 42(1) of

the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 3% and 20% of total of their demand and time liabilities]. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to affect a decrease or an increase in the money supply. An increase in Cash Reserve Ratio (CRR) will make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will reduce the size of their deposits and they will lend less. This will in turn decrease the money supply. The current rate is 4.75%. ( As on Date- 9 March, 2012).

Statutory Liquidity Ratio (SLR): Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact. A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities.

In well-developed economies, central banks use open market operations—buying and selling of eligible securities by central bank in the money market—to influence the volume of cash reserves with commercial banks and thus influence the volume of loans and advances they can make to the commercial and industrial sectors. In the open money market, government securities are traded at market related rates of interest. The RBI is resorting more to open market operations in the more recent years.

Generally RBI uses three kinds of selective credit controls:

1. Minimum margins for lending against specific securities.2. Ceiling on the amounts of credit for certain purposes.3. Discriminatory rate of interest charged on certain types of

advances.

Direct credit controls in India are of three types:

1. Part of the interest rate structure i.e. on small savings and provident funds, are administratively set.

2. Banks are mandatory required to keep 24% of their deposits in the form of government securities.

3. Banks are required to lend to the priority sectors to the extent of 40% of their advances.

STATE BANK OF INDIA:

History

seal of Imperial Bank of India.

The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on June 2, 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on April 15, 1840) and the Bank of Madras (incorporated on July 1, 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on January 27, 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On April 30, 1955, the Imperial Bank of India became the State

Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries. On September 13, 2008, the State Bank of Saurashtra, one of its associate banks, merged with the State Bank of India.

SBI has acquired local banks in rescues. For instance, in 1985, it acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.

International presence

The Israeli branch of the State Bank of India located in Ramat Gan.

As of December 31, 2009, the bank had 157 overseas offices spread over 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.

SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius).

In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches – nine branches in the

state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in British Columbia.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.

In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005..

The State Bank of India (with 74% of the total capital) along with the largest global banking group—BNP Paribas (with 26% of the remaining capital) headquartered in Paris—formed a joint venture which established India's most reputed and trusted life insurance company named SBI Life Insurance company Ltd. in March 2001.

Associate banks

Main Branch of SBI in Mumbai.

SBI has five associate banks; all use the same logo of a blue circle and all the associates use the "State Bank of" name, followed by the regional headquarters' name:

State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

Earlier SBI had only seven associate banks that constituted the State Bank Group. Originally, the then seven banks that became the associate banks belonged to princely states until the government nationalised them between October 1959 and May 1960. In tune with the first Five Year Plan, emphasising the development of rural India, the government integrated these banks into the State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations.

The first step towards unification occurred on August 13, 2008 when State Bank of Saurashtra merged with SBI, reducing the number of state banks from seven to six. Then on June 19, 2009 the SBI board approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77%.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of 12,448 and over 21,000 ATMs. Also, following the acquisition, SBI's total assets will inch very close to the 10 trillion marks. The total assets of SBI and the State

Bank of Indore stood at 9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI branches on August 26, 2010.

State Bank of India Mumbai LHO.

Non-banking subsidiaries

Apart from its five associate banks, SBI also has the following non-banking subsidiaries:

SBI Capital Markets Ltd SBI Funds Management Pvt Ltd SBI Factors & Commercial Services Pvt Ltd SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) SBI DFHI Ltd SBI Life Insurance Company Ltd. SBI General Insurance

Current Board of Directors

After the end of O. P. Bhatt's reign as SBI chairman on March 31, 2011, the post was taken over by Pratip Chaudhuri, who is the former deputy managing director of the international division of SBI. As of August 4, 2011, there are twelve members in the SBI board of directors, including Subir Gokarn, who is also one of the four deputy governors of the Reserve Bank of India. The complete list of the Board members is:

1. Pratip Chaudhuri (Chairman)2. Hemant G. Contractor (Managing Director)3. Diwakar Gupta (Managing Director)4. A Krishna Kumar (Managing Director)5. Dileep C Choksi (Director)6. S. Venkatachalam (Director)

7. D. Sundaram (Director)8. Parthasarathy Iyengar (Director)9. G. D. Nadaf (Officer Employee Director)10. Rashpal Malhotra (Director)11. D. K. Mittal (Director)12. Subir V. Gokarn (Director)

Branches of SBI

State Bank of India has 172 foreign offices in 37 countries across the globe.

SBI has about 25,000 ATMs (25,000th ATM was inaugurated by the then Chairman of State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and SBI group(including associate banks) has about 45,000 ATMs.

SBI has 21,500 branches, including branches that belong to its associate banks.

SBI includes 99345 offices in India. India's number one ADB is in bellary i e State bank of India

bellary ADB

Symbol and slogan

The symbol of the State Bank of India is a circle and a small man at the center of the circle (and not a key hole). A circle depicts perfection and the common man being the centre of the bank's business.

Slogans : "Pure banking nothing else"

also includes : "With you - all the way" and : "a bank of common man"

Loan to NTPC

On July 8, 2011, SBI agreed to give a loan of 100 billion to NTPC (National Thermal Power Corporation), making it the largest loan SBI had ever given to any single customer in its entire 200 year history. The loan had a "door-to-door" maturity period of 12 years, accompanied by a drawdown period of four years. An NTPC press release said at the time of the declaration of the loan that: "The loan shall be utilized for financing the capital expenditure of ongoing and new projects."

NTPC chairman at the time, Arup Roy Choudhury clarified that the loan amount would be used to add 128,000 MW capacity by the end of year 2032 (NTPC'c capacity at the time of the declaration of the loan was 34,584 MW).

This loan was offered amidst declining finance for power projects in India, which were a direct result of the lending constraints placed by the Reserve Bank of India and the increased risk awareness of power projects. It will also help minimize the shortfall of around 4.51 trillion that the Power Ministry of India expected to incur in achieving the objectives of the Eleventh Five Year Plan (This plan targeted an addition of 78,577 MW or power generation capacity which would require an investment of 10.3 trillion).

Recent awards and recognitions

Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010

The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine

Best Bank – Large and Most Socially Responsible Bank by the Business Bank Awards 2009

Best Bank 2009 by Business India The Most Trusted Brand 2009 by The Economic Times Most Preferred Bank & Most preferred Home loan provider

by CNBC Visionaries of Financial Inclusion By FINO Technology Bank of the Year by IBA Banking Technology

Awards

SKOCH Award 2010 for Virtual corporation Category for its e-payment solution

The Brand Trust Report : 11th most trusted brand in India.

Kotak Mahindra Bank

The Bank caters to the myriad needs of Resident Individuals, NRIs and Businesses.

Established in 1985, the Kotak Mahindra group has been one of India's most reputed financial conglomerates. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). This approval created banking history since Kotak Mahindra Finance Ltd. is the first non-banking finance company in India to convert itself in to a bank as Kotak Mahindra Bank Ltd. Today, we are one of the fastest growing bank and among the most admired financial institutions in India.

Our Reach

Kotak Mahindra Bank has over 357 branches and 866 ATMs, which are spread all over India, not just in the metros but in Tier II cities and rural India as well, we are redefining the reach and power of banking.

Our Offerings

We cater to the myriad needs of Resident Individuals, NRIs and Businesses.

We offer complete financial solutions for infinite needs of all individual & non-individual customers depending on the customer's need - delivered through a state of the art technology platform. Investment products like Mutual Funds, Life Insurance, retailing of gold coins and bars etc are also offered. The Bank follows a mix of both open and closed architecture for distribution of the investment products. All this is backed by strong, in-house research on Mutual Funds.

Our Savings Account goes beyond the traditional role of savings, and allows you to put aside a lot more than just money. The worry-free features of our Savings Account provides a range of services from funds transfer, bill payments, 2-way sweep through our ActivMoney feature & much more. You can place standing instructions for investment options that can be booked through Internet or through Phone banking services. The Savings Account thus provides for attractive returns earned through a comprehensive suite products and services that offer investment options, all delivered seamlessly to the customer by well integrated technology platforms.

Apart from Phone banking and Internet banking, the Bank offers convenient banking facility through Mobile banking, SMS services, Netc@rd, Home banking and BillPay facility among others.

The Depository services offered by the Bank allows the customers to hold equity shares, government securities, bonds and other securities in electronic or Demat forms.

Our Salary 2 Wealth offering provides comprehensive administrative solutions for Corporates with features such as easy and automated web based salary upload process thereby eliminating the paper work involved in the process, a dedicated relationship manager to service the corporate account, customized promotions and tie - ups and many such unique features. The whole gamut of investment products and

investment advisory services is available to the salary account holders as well.

For the business community, we offer comprehensive business solutions that include the Current Account, Trade Services, Cash Management Service and Credit Facilities, keeping in mind the myriad needs of your business.. Our Wholesale banking products offer business banking solutions for long-term investments and working capital needs, advice on mergers and acquisitions and equipment financing. To meet special needs of the rural market, we have dedicated business offerings for agricultural financing and infrastructure. Our Agriculture Finance division delivers customised products for capital financing and equipment financing needs of our rural customers.

For financial liquidity we offer you loans that meet your personal requirements with quick approval and flexible payment options. To complete the personal financial offerings space, we now offer Kotak Credit Card which is a hassle-free, transparent product that also happens to be the first vertical credit card in the industry.

Kotak Mahindra Bank addresses the entire spectrum of financial needs of Non-Resident Indians. Our tie-up with the Overseas Indian Facilitation Centre (OIFC) as a strategic partner gives us a platform to share our comprehensive range of banking & investment products and services for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs). Our Online Account Opening facility and Live Chat service helps you to get in touch with us at the comfort of your homes and at your convenience. These offerings are specifically designed to suit the overseas Indian's personal financial needs and give the global Indians a near to home feel.