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PROJECT REPORT

ON

MANAGEMENT FUNCTIONS

IN SBI

BIKANER BRANCH

SUBMITTED TOSUBMITTED BY

Mrs. ADITI MATHURE SuhagiyaKeyur

INSTRUCTOR² PRINCIPLE OF Manoj Sharma

MANAGEMENT & ORGANISATIONAL MBA (AB)1st YEAR

BEHAVIOUR IABM, BIKANER

TABLE OF CONTENTS

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Sr.no. TopicPage no.

1 Introduction of the SBI 3

2 Project methodology 8

3 SWOT analysis of SBI 9

4 Management function 11

5 Conclusions 19

PREFACE

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In the present age the corporate world has become highly competitive, hence only those banks

can sustain which enjoy competitive edge over others. These require formation of policies and

strategies keeping in view the existing management techniques . But the formulation of these strategies is only possible when the bank enjoys the strong base. Assessment of the environment

and bank's position on the part of management of the environment and bank's position on the

part of management strategies manager requires coupling his theoretical knowledge with

practical exposure and experience.

Thus the MBA curriculum has been designed with the view of enabling the students to

have maximum opportunity to bring their theoretical knowledge into practice, complying their objective the report is designed to develop the students understanding about the industry with

special emphasis on the development of skills in analysis and interpreting practical problem

through the application of theory concept and techniques of management .

INTRODUCTION OF THE SBI

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MISSION, VISION AND VALUES

MISSION STATEMENT:

To retain the Bank¶s position as premiere Indian Financial Service Group, with world

class standards and significant global committed to excellence in customer, shareholder and

employee satisfaction and to play a leading role in expanding and diversifying financial service

sectors while containing emphasis on its development banking rule.

VISION STATEMENT:

Premier Indian Financial Service Group with prospective world-classstandards of efficiency

and professionalism and institutional values.

Retain its position in the country as pioneers in Development banking.

Maximize the shareholders value through high-sustained earnings per share.

An institution with cultural mutual care and commitment, satisfying andgood work

environment and continues learning opportunities.

VALUES:

Excellence in customer service

Profit orientation

Belonging commitment to Bank Fairness in all dealings and relation

Risk taking and innovative

Team playing

Learning and renewal

Integrity

Transparency and Discipline in policies and systems

The roots of the State Bank of India rest the first decade of 19th century , when the bank of Calcutta , later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of

Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April

1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were

incorporated as joint stock companies, and were the result of the royal charters. These three

banks received the exclusive right to issue paper currency in 1861 with the paper Currency Act, a

right they retained until the formation of the Reserve Bank of India. The Presidency banks

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amalgamated on 27 January 1921, and the reorganized banking entity took as its name Imperial

Bank of India. The Imperial Bank of India continued to remain a Joint stock company.

Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of

India, which is India¶s central bank, acquired a controlling interest in the Imperial Bank of India.

On 30 April 1955 the Imperial Bank of India became the State Bank of India.

In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enabling

the State Bank of India to take over eight former State-associated banks as its subsidiaries. On

Sept 13, 2008, State Bank of Saurashtra, one of its Associate Banks, merged with State Bank of

India.

State Bank of India(SBI) is India¶s largest commercial bank. SBI has a vast domestic

network of over 16000 branches and commands one fifth of deposits and loans of all scheduled

commercial bank in India. It is the only Indian bank to feature in the top 100 world banks in the

Fortune Global 500 rating and various other rankings. Today state bank of India (SBI) has spread

its arms around the world and has a network of branches spanning all time zones.SBI¶s

International Banking Group dilivers the full range of cross-border finance solutions through its

four wings the Domestic division, the foreign offices division, the Foreign Department and the

International Services division.SBI is the largest commercial bank in India in terms of profits,

assets ,deposits, branches and employees, It has segregated its core business operations as

Tressury operations. Corporate Banking Group , National Banking Group, International Banking

Group, Associates and Subsidiaries, Asset Quality and Information Technology.

SBI plays a vital role in providing working capital and term finance to the Indianindustry. Due to its large network of branches ,SBI has been able to garner a large chunk of

deposits from the rural sector. It is also a leader in the international banking business.

The state Bank Group includes a network of seven banks, and several non-banking

subsidiaries offering merchant banking services, fund management, factoring services, primary

dealership in government securities, credit cards and insurance.

SBI GROUP

1.State Bank of India2. State Bank of Mysore

3. State Bank of Indore

4. State Bank of Patiala

5.State Bank of Travancore

6.State Bank of Bikaner and Jaipur

7. State Bank of Hyderabad

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HISTORY

The origin of theState Bank of India goes back to the first decade of the nineteenth

centurywith the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years

laterthe bank received its charter and was re-designed as the Bank of Bengal (2 January 1809).

Aunique institution, it was the first joint-stock bank of British India sponsored by the

Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July

1843) followed the Bank of Bengal. These three banks remained at the apex of modern

banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either

asresult of the compulsions of imperial finance or by the felt needs of local European commerce

and were not imposed from outside in an arbitrary manner to modernise India's economy.

Their evolution was, however, shaped by ideas culled from similar developments in Europe and

England, and was influenced by changes occurring in the structure of both the local trading

environment and those in the relations of the Indian economy to the economy of Europe and the

global economic framework.

The three banks were governed by royal charters, which were revised from time to time.

Each charter provided for a share capital, four-fifth of which were privately subscribed and the

rest owned by the provincial government. The members of the board of directors, which

managed the affairs of each bank, were mostly proprietary directors representing the large

European managing agency houses in India. The rest were government nominees, invariably

civil servants, one of whom was elected as the president of the board.

BUSINESS

The business of the banks was initially confined to discounting of bills of exchange or

other negotiable private securities, keeping cash accounts and receiving deposits and issuing and

circulating cash notes. Loans were restricted to Rs.one Lakh and the period of accommodation

confined to three months only. The security for such loans was public

securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not

of a perishable nature' and no interest could be charged beyond a rate of twelve per cent.

Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twistand silk goods were also granted but such finance by way of cash credits gained momentum

only from the third decade of the nineteenth century. All commodities, including tea, sugar

and jute, which began to be financed later, were either pledged or hypothecated to the bank.

Demand promissory notes were signed by the borrower in favour of the guarantor, which was

in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of

houses, land or other real property was, however, forbidden.

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Indians were the principal borrowers against deposit of Company's paper, while the

businessof discounts on private as well as salary bills was almost the exclusive monopoly of

individuals Europeans and their partnership firms. But the main function of the three banks,

as far as the government was concerned, was to help the latter raise loans from time to time

and also provide a degree of stability to the prices of government securities.

FIRST FIVE YEAR PLAN

In 1951, when the First Five Year Plan was launched, the development of rural India was

given the highest priority. The commercial banks of the country including the Imperial Bank of

India had till then confined their operations to the urban sector and were not equipped to

respond to the emergent needs of economic regeneration of the rural areas. In order,

therefore, to serve the economy in general and the rural sector in particular, the All India

Rural Credit Survey Committee recommended the creation of a state-partnered and state-

sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former

state-owned or state-associate banks. An act was accordingly passed in Parliament in May

1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the

resources of the Indian banking system thus passed under the direct control of the State.

Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State

Bank of India to take over eight former State-associated banks as its subsidiaries (laternamed

Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the

480offices comprising branches, sub offices and three Local Head Offices inherited from the

Imperial Bank. The concept of banking as mere repositories of the community's savings andlenders to creditworthy parties was soon to give way to the concept of purposeful banking

subserving the growing and diversified financial needs of planned economic development.

The State Bank of India was destined to act as the pacesetter in this respect and lead the indian

banking system.

PROJECT METHODOLOGY

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AREA OF STUDY

We visited State Bank of India Bikaner, cot gate branch where we met to branch manager

Mr. K.P. Sharma, and get information of management function of SBI.

COLLECTION OF DATA

PRIMRY DATA

We collected information of management function from branch manager.

SECONDARY DATA

We collected information of management function from branch internet.

SWOT ANALYSIS

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STRENGTHS:

Brand name: SBI Bank has earned a reputation in the market over the period of time (Being

the oldest bank in India tracing history back to 1806)

Market Leader: SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008

Forbes Global 2000. With an asset base of $126 billion and its reach, it is a regional banking

behemoth.

Wide Distribution Network: Excellent penetration in the country with more than 10000 core

branches and more than 5100 branches of associate banks (subsidiaries).

Diversified Portfolio: SBI Bank has all the products under its belt, which help it to extend the

relationship with existing customer¶s Bank has umbrella of products to offer their customers, if

once customer has relationship with the bank. Some Products, which SBI Bank is offering are:

Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal

loans & Car loans Insurance Housing Loans

Government Owned: Government owns 60% stake in SBI. This gives SBI an edge over

private banks in terms of customer security.

Low Transition Costs-SBI offers very low transition costs which attracts small customers.

Continued effort to increase low cost deposit would ensure improvement in NIMs and hence

earnings.

WEAKNESSES:

The existing hierarchical management structure of the bank although strength in some

respects, is a barrier to change. Though SBI cards are the 2nd largest player in the credit card industry, it has the highest non

performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007).

Modernisation: SBI lags with respect to private players in terms of modernisation of its

processes, infrastructure, centralisation, etc.

SBI is currently operating at a lowest CAR(8%). Insufficient capital may restrict the growth

prospects of the bank going forward.

Delay in technology up gradation could result in loss of market shares.

Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn.

Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing

retail book poses higher credit risk to the bank.

OPPORTUNITIES:

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Merger of associate banks with SBI: Merger of all the associate banks (like SBH, SBM, etc)

into SBI will create a mega bank which streamlines operations and unlocks value.

Planning to add 2000 branches and 3000 ATMs in 2008- 2009. This will further increase its

reach.

Increasing trade and business relations and a large number of expatriate populations offers agreat opportunity to expand on foreign soil.

Global expansion: SBI already has expanded globally and start its operations internationally

in 32 countries like Australia, Bangladesh, etc.... and has more plans of expansion in other

global markets.

Growing retail & SMEs thrust would lead to higher business growth.

Micro Finance: there is a lot of growth opportunity in the area of micro finance.

Strong economic growth would generate higher demand for funds pursuant to higher orporate

demand for credit on account of capacity expansion.

THREATS:

Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market

due to the friendly policies adopted by the government. This can increase the level of

competition and prove a potential threat for the market share of SBI bank.

Consumer expectations have increased many folds in last few years and the bank has not been

responsive enough to meet them on time.

Private banks have started venturing into the rural and semiurban sector, which used to be the

bastion of the State Bank and other PSU banks

Employee Strike: There was an employee strike in the year 2006 which disrupted SBI¶s

activities. This can be repeated in the future.

Stiff competition, especially in the retail segment, could impact retail growth of SBI and

Hence slowdown in earnings growth.

Slow down in domestic economy would pose a concern over credit off-take thereby Impacting

earnings growth.

The changing interest rates and the changing policies of RBI.

MANAGEMENT FUNCTION

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Scenario Planning

Scenario planning is SBI's tool of choice for developing corporate and other high-level

strategies. Why scenario planning? Because the future is inherently uncertain! In the face of an

uncertain future, the best one can do is:

1. Consider a wide range of possible developments.

2. Consider many strategic alternatives.

3. Decide on a course of action.

4. Monitor actual developments.

5. Make the inevitable strategic adjustments sooner rather than later.

SBI's approach to scenario planning covers items 1, 2, and 3 above. Roadmapping service sets

the stage for items 4 and 5.

SBI's Approach

SBI began developing its scenario planning more than 25 years ago and remains a leader

in helping clients apply the approach to their businesses. Our multidisciplinary consulting team

works with clients to identify and focus critical strategic issues, create relevant scenarios that

capture the important uncertainties in the external environment, and then develop the best

strategy on the basis of an evaluation of competing alternatives.

Client engagements ideally follow the illustration below. Creating scenarios is a

disciplined process that surfaces critical dynamics in the external environment that are highly

uncertain and may have a significant impact on the outcome of strategic decisions. The result is a

set of several entirely disparate scenarios that describe how the future will unfold and what

important events will take place. Once constructed, scenarios are best used for developing

strategy by identifying, testing, and modifying various alternatives in order to select the best

strategy to carry forward.

The country's largest lender, State Bank of India has plans of increasing the staff intake in

its branches across the country. The bank has raised the target of hiring 11,000 employees for its

clerical post to 25,000 so as to take care of the retirements as well as the positions at its new

branches.

Currently the hiring process is in progress and the bank is seeking approval to hire 25,000

candidates instead of 11,000 in this recruitment season itself , a senior SBI official quoted.

The official further added that this step by the bank would save both time and cost as the

bank will not have to go in for fresh recruitment drive next year. The estimated cost for the

clerical recruitment in 2010 is pegged at Rs 50 crore, he said.

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While the written examination has already been conducted for which 27 lakh candidates

appeared, the interview sessions are scheduled in the upcoming 2-3 months. The induction

process is expected to be over by March 2011.

The bank has already hired 33,000 people for clerical post since 2007. With the addition

of 25,000 more employees the total intake would exceed 50,000 by March 2011.

"Our assessment of manpower needs factors in the needs of banking entities within

group. With consolidation underway, bank would group approach is becoming more relevant,"

another official said.

SBI plans to improve its branch network to 50,000 from 17,075 by the end of this

decade.Currently, SBI has 12,207 domestic and 141 overseas branches while the remaining

belong to its six associate banks.The bank currently has 250 million accounts. It further plans to

merge its associate banks to itself in the upcoming few years.

This year alone, SBI has opened 975 branches and it intends to add another 1,000

branches during 2010-11. It had around 9,100 branches at the start of year 2000.

ORGANIZING

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Organizational setup whereby the authority to make important decisions is retained by

anagers at the top of the hierarchy.

An organizational setup whereby the authority to make important decisions about

organizational resources and to initiate new projects is delegated to managers at all levels

in hierarchy .

There is a well defined system in the Bank regarding the decision making process.

Financial decisions are taken at various levels by different officials depending upon their

positions and also through committee approach

Centralized credit processing cells are being formed at certain centre for sanction of

personal segment loans and loans under SIB segment.

Branches source the applications and forward them to the respective credit processing

cells, for their consideration

Regarding sanction of loans, each officer of the Bank will consider loan proposals and

take a decision in terms of the scheme of delegation of powers, on the merits of the

proposals. If bank need to purchase any kind of equipment like computers or software branch

managers are required to take permission from the high authority

So in term of decision making centralization is high and low decentralization, managers

have some power to take decision but it is very limited

There are 12 employee in SBI cot gate branch Bikaner.

1 Branch manager, 1 accountant, 1 Field officer, 5 Senior special assistant, 1 assistant of manager, 1 guard and 2 messanger.

ORGANIZATION STRUCTURE

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STAFFING

RECRUITMENT AND SELECTION PROCEDURE

The recruitment and selection process aims to appoint the most suitable person for the

job. The implementation of this policy will not discriminate directly or indirectly on the grounds

of gender, ethnic or national origin, disability, age, religion, culture, sexual orientation, marital

status or caring responsibility or trade union membership. This procedure should be read in

conjunction with the recruitment guide to good practice.

VACANCY REVIEW

When a vacancy arises, the work of the Division/Directorate examine to determine

whether it is necessary to fill the vacancy. If a decision is taken to fill the vacancy, each

Division/Directorate should ensure compliance with its respective recruitment protocol.

RECRUITMENT AND SELECTION- RECRUITMENT PREPARATIONQUESTIONS

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The appointing manager will have to complete the Recruitment Preparation Questions

and send the advert, job description and person specification to the Recruitment Department

electronically.

Job Description (Outline of Tasks and Responsibility)

If the job description is redrafted it must be re-evaluated beforebeing advertised. All

recruitment decisions will be made usingjob descriptions and person specifications based on

objectivejob related criteria.

Person specification (Skills, Experience, Behaviours,Knowledge Required to Undertake the

Post)

A person specification will be drafted, with assistance fromthe HR Department if necessary. Guidance notes are availablein the Recruitment Guide to Good Practice.

Advertisement

An advertisement is submitted to the RecruitmentDepartment. The advertising budget is

held by theHR Manager and the decision where to place the advertisementrests with the HR

Department in consultation with the manager.Advertisements cannot be accepted without a job

descriptionand person specification.Copy adverts, job descriptions, preparation questions ±

available in the Recruitment Guide to Good Practice, personspecifications and application forms

will be issued and returnedto the Recruitment Department to be held until the closing date.TheRecruitment Department will also undertake EqualOpportunities monitoring.Informal enquiries

from applicants will be directed to theappropriate manager.All vacancies will be advertised

widely to ensure opencompetition and not in such a way as to exclude minority ordisadvantaged

groups through the use of discriminatorylanguage, age limits or listing non-essential selection

criteria.

ENTRANCE EXAMS

The third step of the selection process is a written aptitude test, which measures the

ability of the candidate to acquire further knowledge and skills. This test comprises of properly

administered and relevant exercises, which ensure fair treatment of all candidates.

SHORTLISTING

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From the figure it¶s clear that for attaining high profitability the banks should try to have

customer satisfaction which can only be attained if the employees are satisfied and they work

wholly and solely for the banks.

The scheme aims at rewarding the performers. The following officers are eligible under

this scheme. Indirect workers, such as supervisors, foremen, charge hands, helpers, crane

operators, canteen staff, store keepers and clerical staff are also be covered in the incentive

scheme.

Bank strive to create a proper climate by adopting sound policies of recruitment,

promotion, trading etc., right from the inception. Unless there is mutual understanding and

concern for improvingproductivity, even a well-conceived incentive scheme may not yield the

optimumresults. Therefore, the management also concentrate on creating a proper relations

climate before introducing incentive schemes.

CONTROLLING

Inspection and Supervision

The Inspection Department at Head Officeco-ordinates the Audit and Inspection

activities of the Bank. In addition to theregular internal inspection, IS Audit,Compliance Audit,

Surprise Inspection,System Audit of Zonal Offices and HeadOffice departments, etc. are

conducted bythe Inspection Department.

The Bank has put in place an effectiveinstitutional mechanism for Risk BasedSupervision

through RBS Cell in InspectionDepartment. As envisaged by the regulator,the Bank introduced

Risk Focused InternalAudit (RFIA) under RBS w .e. f. 1st April2003, where business parameters

havebeen de-linked from the Risk Parameters

CREDIT AUDIT

The audit of loan appraisal andadministration for high value credit accountswith the aim

of improving the asset qualityof the Bank is undertaken by the CreditAudit Department.

INTER-OFFICE RECONCILIATION

As per RBI guidelines, all the high value debitentries of value Rs.1 lac and above

and99.99% of debit amount need to bereconciled within a period of six monthsfrom the date of

their origin. As againstthis stipulation, the Bank had completedreconciliation of Inter-branch

accounts upto December 2009 achieving 100%reconciliation of debit entries by end-March2010.

The Bank has also reconciled all creditentries of value Rs.50,000/- and above forthe quarter

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CONCLUSION

Banking sector in India has gone through a metamorphosis change in its concept

perception and outlook quantitative expansion with quality has been a phenomenon in the

operations of the banking system bank being a service selling show has to meet the need of the

customers which vary from place to place, time to time and purpose to purpose and also at the

same time it has to sustain the tough competition coming from all the four ends.

An increase in the income and saving of the urban population has raised hopes for

banking institutions to fill up the gaps by catering to the need of the potential customers and also

penetrate into new target markets like rural sectors through its innovative financial products like

micro finance and SBI is doing the same and this has been proved by so many awards it has

achieved in the recent past, A few of them being most preferred bank as declared by CNBC in

Aug 2007.

State bank of India earlier known as Imperial Bank has proved its existence through

introducing various innovative schemes and that also are considered as competitive in present

market.

In this span of time, they have also come up with new strategies so as to compete in this

fiercely competitive market where every next day a new scheme is introduced so as to grab the

market share.

It follows a centralized system, so as to bring synchronization in the decision making

process which helps the organization to create better strategies so as to focus on the overallfunctioning and growth prospects of the bank.

At the same time it can be concluded that they need to focus on the human resources in

order to achieve the maximum market share.

Documents

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