SBI not only helps small and medium size industries , it finances big coperations like TATAwith US$ 7billion to expand its base oversea and within India. In spite of showing a 12. 3 per cent year-on-year growth in September quarter’s net profit, higher slippages in non-performing assets (NPA) led to the SBI stock slide down. SBI has slashed its interest rates in order to increase the lending ( from 13. 75% to 12. 70%). Post rate cuts ,SBI sees demand for home and auto loans triple. Banking sector in India is in good health and as a public sector bank SBI’s market share is growing but still needs to catch up with Private sector in long run.
Social Analysis : As integral members of society, companies owe their own? existence to the very existence of society. Consequently, no company can function concern without contributing to the sustained development of society. The SBI Group has a strong awareness of the “social nature” of companies and the need to be a “strong and respected company. ” With this in mind, the Group is aggressively conducting many corporate social responsibility (CSR) programs. RBI’s gudielines mandate every bank in India to spend the 1% of their bottomline on CSR activities.
Though SBI has not used all its funds last year,it is actively engaging its branches to spend all the avaiable funds . Banks most important role to help society at large is by its lending capacity , SBI is a pioneer as a lending instituaion, it’s vast network all across India helps it to penetrate deep into rural India where agricultural loan , education loan ,ect can not be provided by any other private sector banks. SBI also launched different customized loan programs to cater to various sections of society depending on income levels and repayment capabilities.
Interest rates and repayment periods were tailor-made to suit the customer groups. As a Public sector bank, SBI is maintaining its reputation and working towards development of society at large and also keeping pace with private sector in making profits. Technological Analysis: Technological developments would render flow of information and data faster leading to faster appraisal and decision-making. This would enable banks to make credit management more effective,besides leading to anappreciable reduction in transaction cost.
With the liberalization of the Indian banking industry in the mid-1990s, SBI faced stiff competition from the private sector and foreign banks which resulted in significant loss of its market share. To remain competitive with its private-sector counterparts, in 2002, SBI began the largest implementation of a centralized core system ever undertaken in the banking industry. The State Bank of India selected Tata Consultancy Services to customize the software,implement the new core system, and provide ongoing operational support for its centralized information technology.
IBM, TCS, Hewlett-Packard, Australia-based Financial Network Services (FNS), and China Systems have worked and are still catering their services to improve the services of the bank. The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. The bank recently reported that business per employee increased by 250% over the last five years. The bank has achieved its goal of offering its full range of products and services to its rural branches.
It delivers economic growth to the rural areas and offers financial inclusion for all of India’s citizens. Even though SBI went through moderinisation , it is failing to keep up with the international norms and standardes . This is giving private banks leverage over SBI. Recently SBI has cousulted McKinsey’s for some turn arounds. In past SBI has taken up the challenge of making system more technologically advanced. SBI intends to keep its market share up and remain a premieum bank of India.