Customer Satisfaction of SBI

CHAPTER I
Introduction
State Bank of India is the largest and one of the oldest commercial bank in India, in existence
for more than 200 years. The bank provides a full range of corporate, commercial and retail
banking services in India. Indian central bank namely Reserve Bank of India (RBI) is the
major share holder of the bank with 59.7% stake. The bank is capitalized to the extent of
Rs.646bn with the public holding (other than promoters) at 40.3%. SBI has the largest branch
and ATM network spread across every corner of India. The bank has a branch network of
over 14,000 branches (including subsidiaries). Apart from Indian network it also has a
network of 73 overseas offices in 30 countries in all time zones, correspondent relationship
with 520 International banks in 123 countries. In recent past, SBI has acquired banks in
Mauritius, Kenya and Indonesia. The bank had total staff strength of 198,774 as on 31st
March, 2006. Of this, 29.51% are officers, 45.19% clerical staff and the remaining 25.30%
were sub-staff. The bank is listed on the Bombay Stock Exchange, National Stock Exchange,
Kolkata Stock Exchange, Chennai Stock Exchange and Ahmedabad Stock Exchange while its
GDRs are listed on the London Stock Exchange. SBI group accounts for around 25% of the
total business of the banking industry while it accounts for 35% of the total foreign exchange
in India. With this type of strong base, SBI has displayed a continued performance in the last
few years in scaling up its efficiency levels. Net Interest Income of the bank has witnessed a
CAGR of 13.3% during the last five years. During the same period, net interest margin (NIM)
of the bank has gone up from as low as 2.9% in FY02 to 3.40% in FY06 and currently is at
3.32%.

Management
The bank has 14 directors on the Board and is responsible for the management of the
Banks business. The board in addition to monitoring corporate performance also carries out
functions such as approving the business plan, reviewing and approving the annual budgets
and borrowing limits and fixing exposure limits. Mr. O. P. Bhatt is the Chairman of the bank.
The five-year term of Mr. Bhatt will expire in March 2011. Prior to this appointment, Mr.
Bhatt was Managing Director at State Bank of Travancore. Mr. Bhatt has more than 30 years
of experience in the Indian banking industry and is seen as futuristic leader in his approach
towards technology and customer service. Mr. Bhatt has had the best of foreign exposure in
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SBI. We believe that the appointment of Mr. Bhatt would be a key to SBIs future growth
momentum. Mr. T S Bhattacharya is the Managing Director of the bank and known for his
vast experience in the banking industry. Recently, the senior management of the bank has
been broadened considerably. The positions of CFO and the head of treasury have been
segregated, and new heads for rural banking and for corporate development and new business
banking have been appointed. The managements thrust on growth of the bank in terms of
network and size would also ensure encouraging prospects in time to come.
Shareholding & Liquidity (Till 30th Sept. 2007)
Reserve Bank of India is the largest shareholder in the bank with 59.7% stake followed by
overseas investors including GDRs with 19.78% stake as on September 06. Indian financial
institutions held 12.3% while Indian public held just 8.2% of the stock. RBI is the monetary
authority and having majority shareholding reflects conflict of interest. Now the government
is rectifying the above error by transferring RBIs holding to itself. Post this, SBI will have a
further headroom to dilute the GOIs stake from 59.7% to 51.0%, which will further improve
its CAR and Tier I ratio.
Key Areas of Operations
The business operations of SBI can be broadly classified into the key income generating areas
such as National Banking, International Banking, Corporate Banking, & Treasury operations.

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HISTORY
The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three
years later the bank received its charter and was re-designed as the Bank of Bengal (2
January 1809). A unique 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 as a
result 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.

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Group Photograph of Central Board (1921)

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
twist and 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.Indians were the principal borrowers against deposit of Company's paper, while
the business of 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
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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 (later named Associates). The State Bank of India was thus born with a new
sense of social purpose aided by the 480 offices 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 and lenders 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 into the exciting
field of national development.

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Customer Satisfaction of SBI

COMPETITORS
Competitors and other players in the field:Top Performing Public Sector Banks
Andhra Bank
Allahabad Bank
Punjab National Bank
Dena Bank
Vijaya Bank
Top Performing Private Sector Banks
HDFC Bank
ICICI Bank
AXIS Bank
Kotak Mahindra Bank
Centurion Bank of Punjab

Top Performing Foreign Banks

Citibank
Standard Chartered
HSBC Bank
ABN AMRO Bank
American Express

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Strength/ Opportunities:
The growth for SBI in the coming years is likely to be fuelled by the following factors:
Continued effort to increase low cost deposit would ensure improvement in NIMs and hence
earnings.
Growing retail & SMEs thrust would lead to higher business growth.
Strong economic growth would generate higher demand for funds pursuant to higher
corporate demand for credit on account of capacity expansion.
Weakness/ Threats:
The risks that could ensue to SBI in time to come are as under:
SBI is currently operating at a lowest CAR. Insufficient capital may restrict the growth
prospects of the bank going forward.
Stiff competition, especially in the retail segment, could impact retail growth of SBI and
hence slowdown in earnings growth.
Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing
retail book poses higher credit risk to the bank.
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.
Slow down in domestic economy would pose a concern over credit off-take thereby
impacting earnings growth.

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DIFFERENT PRODUCTS OF SBI:
DEPOSIT

LOANS

CARDS

DIFFERENT
CREDIT CARDS

Savings

Home Loans

Consumer Cards

Account

SBI
International
cards

Life Plus Senior

Loan

Citizens

Against

Savings

Property

Credit Card

SBI Gold cards

Travel Card

SBI

Account

Fixed

Deposits

Loans

Personal

Car Loan

Gold

Master cards

Debit Cards

Security

Your City Your

Cards

Deposits

Recurring

Deposits

Loans

against

Commercial
Cards

Securities

Tax-Saver Fixed

Deposit

Two

Corporate Cards

Wheeler

Salary Account

Pre-

Partnership
Cards

Prepaid Card

Purchase Card

approved
Loans

Advantage

Retail Asset

Woman
Account
Rural
Account

SBI Employee
Cards

Savings

Savings

Farmer

Finance

Distribution
Cards

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Customer Satisfaction of SBI

People's

Business

Savings

Installment

Account

Loans

Freedom

Flexi Cash

Business Card

SBI Advantage
Cards

Savings

Merchant
Services

Account

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Customer Satisfaction of SBI

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Advance Product
Now a day not all the people have the capacity to fulfill their requirement by their own
earning, thats why they need help from others. For this so many government & private sector
bank provide them money to fulfill their requirement, thats call the Advance Product (loan
product) of the bank. All the banks have so many different types of advance product as per
the requirement of the people or customers. In Bhubaneswar also there are so many banks
those provide loan to the people for different causes.
Types of Advance Product

Home Loan
Educational Loan
Car Loan
Personal Loan
Property Loan
Loan Against Shares\Debentures
Etc.

Now a day a large no. of people are taking loan form different banks. It helps people to fulfill
their need and it really easy to repayment the loan amount with a longer repayment period.

SBI Advance Product

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SBI Home Loans: Purpose
Purchase/ Construction of House/ Flat
Purchase of a plot of land for construction of House
Extension/ repair/ renovation/ alteration of an existing House/ Flat
Purchase of Furnishings and Consumer Durables as a part of the project cost.
Takeover of an existing loan from other Banks/ Housing Finance Companies.
Eligibility
Minimum age 18 years as on the date of sanction
Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the
loan should be fully repaid.
Availability of sufficient, regular and continuous source of income for servicing the loan
repayment.
Loan Amount
40 to 60 times of NMI, depending on repayment capacity as % of NMI as under

Net Annual Income

EMI/NMI Ratio

Upto Rs.2 lacs

40%

Above Rs.2 lac to Rs. 5 lacs

50%

Above Rs. 5 lacs

55%

To enhance loan eligibility you have option to add:

1. Income of your spouse/ your son/ daughter living with you, provided they have a steady
income and his/ her salary account is maintained with SBI.
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Customer Satisfaction of SBI

2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is
proposed to be rented out.
3. Depreciation, subject to some conditions.
4. Regular income from all sources
Margin (Special Festival Season Offer)

Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1

cr., 20% for loans above Rs. 1 cr.

Repairs/ Renovation of an existing House/ Flat: 15%

Interest Rates w.e.f 27.2.2008

Floating interest rates
(linked to State Bank Advance Rate - SBAR)
(SBAR: 12.25% p.a.)

Loan
->
Upto
Lacs

Tenor

Upto 5 years

Rs.30 2.25%
SBAR, 10.00% p.a.

Above Rs.30 2.00%

Lacs

SBAR, 10.25% p.a.

Above

years

and upto 15 years

below 2.00%
SBAR, 10.25% p.a.
below 1.75%
SBAR, 10.50% p.a.

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Above 15 years and

upto 25 years

below 1.75%

below

SBAR, 10.50% p.a.

below 1.50%
SBAR, 10.75% p.a.

below

Customer Satisfaction of SBI

Fixed interest rates
Tenure
(p.a.)*Upto 10 years

Rate of Interest
12.75%

* Fixed rate loans will be subject to: 'force majeure' clause and interest reset at the end of
every two years on the basis of fixed interest rates prevailing then.
CAR LOAN:
Purpose
You can take finance for:
A new car, jeep or Multi Utility Vehicles (MUVs)
A used car / jeep (not more than 5 years old). (Any make or model).
Take over of existing loan from other Bank/Financial institution (Conditions apply)
Eligibility
To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age.

A Permanent employee of State / Central Government, Public Sector Undertaking,

Private company or a reputed establishment or

A Professionals or self-employed individual who is an income tax assessee or

A Person engaged in agriculture and allied activities.

Net Annual Income Rs. 100,000/- and above.

Salient Features Loan Amount

There is no upper limit for the amount of a car loan. A maximum loan amount of 2.5 times
the net annual income can be sanctioned. If married, your spouse's income could also be
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Customer Satisfaction of SBI

considered provided the spouse becomes a co-borrower in the loan. The loan amount includes
finance for one-time road tax, registration and insurance!
No ceiling on the loan amount for new cars.
Loan amount for used car is subject to a maximum limit of Rs. 15 lacs.
Type of Loan
1. Term Loan 2. Overdraft - a) For New vehicles only b) Minimum loan amount: Rs. 3 lacs.
Documents required you would need to submit the following documents along with the
completed application form if you are an existing SBI account holder:
1. Statement of Bank account of the borrower for last 12 months.
2. 2 passport size photographs of borrower(s).
3. Signature identification from bankers of borrower(s).
4. A copy of passport /voters ID card/PAN card.
5. Proof of residence.
6. Latest salary-slip showing all deductions
7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for professional/selfemployed/businessmen duly accepted by the ITO wherever applicable to be
submitted.
8. Proof of official address for non-salaried individuals.
If you are not an account holder with SBI you would also need to furnish documents that
establish your identity and give proof of residence.
Margin
New / Used vehicles: 15% of the on the road price.
Repayment
You

enjoy

the

longest

repayment

period

Repayment period:

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in

the

industry

with

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Customer Satisfaction of SBI

For Salaried: Maximum of 84 months For Self-employed & Professionals: Maximum 60
months
Repayment period for used vehicles :Up to 84 months from the date of original purchase of
the vehicle (subject to maximum tenure as above).
Prepayment Penalty:
Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain
conditions
FLOATING RATES:
A. for Term Loans
1. New Vehicles (Term Loan) Floating only W.E.F. February 27, 2008
Repayment Period

All Centers (SBAR - 12.25%)

Upto 3 years (for loans Rs. 7.5 lac & above)

0.75% below SBAR i.e. 11.50% p.a.

Upto 3 years (for loans below Rs. 7.5 lac)

0.50% below SBAR i.e. 11.75%p.a.

Above 3 yrs up to 5 yrs (for all loans)

0.50% below SBAR i.e. 11.75% p.a.

Above 5 yrs up to 7 yrs (for all loans)

0.25% below SBAR i.e. 12.00% p.a.

2. Used Vehicles: Floating only W.E.F. February 27, 2008

Repayment Period

All Centers (SBAR-12.25%)

Upto 3 years

3.00% above SBAR i.e. 15.25% p.a.

Above 3 yrs up to 7 yrs

3.25% above SBAR i.e. 15.50% p.a.

B. For Overdrafts: For New Vehicles only W.E.F. February 27, 2008
Repayment Period

All Centres (SBAR 12.25%)

Upto 3 years (for loans Rs. 7.5 lac & above)

0.25% below SBAR i.e. 12.00% p.a.

Upto 3 years (for loans below Rs. 7.5 lac)

At SBAR i.e. 12.25% p.a.

Above 3 yrs up to 5 yrs (for all loans)

At SBAR i.e. 12.25% p.a.

Above 5 yrs up to 7 yrs (for all loans)

0.25% above SBAR i.e. 12.50% p.a.

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Customer Satisfaction of SBI

EDUCATION LOAN:
A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.
Eligible Courses
All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees for

the entire course)

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.
Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

Interest Rates (with effect from 1st June 2008)

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Customer Satisfaction of SBI

For loans up to Rs.4 lacs - 11.75 % p.a. Floating
For loans above Rs. 4 lacs and upto Rs.7.50 lacs - 13.25 % Floating
For loans above Rs.7.50 lacs - 12.25% p.a. Floating

Processing Fees

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in
the margin money

Repayment Tenure
Repayment will commence one year after completion of course or 6 months after securing a
job, whichever is earlier.

Place of Study

Loan Amount

Repayment in Period
Years

Studies in India
Studies Abroad

Rs. 10.0 lacs

5-7

Rs. 20.0 lacs

5-7

Security
Amount

For loans upto Rs. 10.00 lacs for Studies in

India and upto Rs. 20.00 lacs for studies abroad

Upto Rs. 4 lacs

No Security

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Customer Satisfaction of SBI

Collateral security in the form of suitable third party
Guarantee. The bank may, at its discretion, in
exceptional cases, weive third party guarantee if
satisfied with the net-worth/means of parent/s who
would be executing the documents as "joint
borrower"
Tangible collateral security of suitable value, along
with the assignment of future income of the student
For payment of installments.

All loans should be secured by parent(s)/guardian of the student borrower. In case of

married person, co-obligator can be either spouse or the parent(s)/ parents-in-law
Margin

For loans up to Rs.4.0 lacs : No Margin

For loans above Rs.4.0 lacs:

o

Studies in India: 5%

Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

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Customer Satisfaction of SBI

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

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SBI SARAL PERSONAL LOAN:
Purpose
The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for domestic or
foreign travel, medical treatment of self or a family member, meeting any financial liability,
such as marriage of son/daughter, defraying educational expenses of wards, meeting margins
for purchase of assets etc.)
Eligibility
You are eligible if you are a Salaried individual of good quality corporate, self employed
engineer, doctor, architect, chartered accountant, MBA with minimum 2 years standing.
Salient Features
Loan Amount
Your personal loan limit would be determined by your income and repayment capacity.
Minimum: Rs.24,000/- in metro and urban centres
Rs.10, 000/- in rural/semi-urban centres
Maximum: 12 times Net Monthly Income for salaried individuals and pensioners subject to a
ceiling of Rs.10 lacs in all centres
Documents Required
Important documents to be furnished while opening a Personal Loan Account:
For existing bank customers
Passport size photograph
From salaried individuals
Latest salary slip and Form 16
Margin
We do not insist on any margin amount.
Interest Rates
3.25% above SBAR floating i.e. 15.50% p.a.
Repayment
The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish to,
without attracting any prepayment penalty.
Security
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Customer Satisfaction of SBI

NIL
Processing Fee
Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in the
industry. Processing fees have to be paid upfront. There are no hidden costs or other
administrative charges.
PROPERTY LOAN:
Purpose
This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If
amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified
along with an undertaking that loan will not be used for any speculative purpose whatever
including speculation on real estate and equity shares.

Eligibility
You are eligible if you are:
A. An individual who is;
a. An Employee or
b. A Professional, self-employed or an income tax assesse or
c. Engaged in agricultural and allied activities.
B. Your Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual Income
(others) is in excess of Rs.1,50,000/-.
The income of the spouse may be added if he/she is a co-borrower or a guarantor.
C. Maximum age limit: 60 years.

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Customer Satisfaction of SBI

Salient Features
Loan Amount
Minimum: Rs.25, 000/- Maximum: Rs.1 crore. The amount is decided by the following
calculation:

24 times the net monthly income of salaried persons (Net of all deductions including
TDS) OR

2 times the net annual income of others (income as per latest IT return less taxes
payable)

Margin
We will finance upto 75% of the market value of your property.

Interest
Term

Loan

0.75%

above

SBAR.

i.e.13.00%

p.a.

Floating

Repayment
Maximum of 60 equated monthly installments, upto 120 months for salaried individuals with
check-off facility. You could opt to divert any surplus funds towards prepayment of the loan
without attracting any penalty.
Security
As per banks extant instructions.

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Customer Satisfaction of SBI

LOAN AGAINST SHARES \ DEBENTURES:

Eligibility
This facility is available to our existing individual customers enjoying a strong relationship
with SBI. This loan could be availed either singly or as a joint account with spouse in 'Either
or Survivor'/ 'Former or Survivor' mode. It is offered as an Overdraft or Demand Loan.
The facility is available at 50 select centers.

Salient Features: Purpose

For meeting contingencies and needs of personal nature. Loan will be permitted for
subscribing to rights or new issue of shares / debentures against the security of existing shares
/ debentures. Loan will not be sanctioned for (i) speculative purposes (ii) inter-corporate
investments

or

(iii)

acquiring

controlling

interest

in

company

companies.

Loan Amount You can avail of loans up to Rs 20.00 lacs against your shares/debentures.

Documents Required
You will be required to submit a declaration indicating:

Details of loans availed from other banks/ branches for acquiring shares/ debentures.

Details of loans availed from other banks/ branches against security of shares/
debentures

Margin
You will need to provide a margin amount of 50% of the prevailing market prices of the
shares/ non-convertible debentures being offered as security. (The market prices refer to the
prices in the Stock Exchanges as reported in the Economic Times.)

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Customer Satisfaction of SBI

Interest
At SBAR Floating i.e. 12.25% p.a.
Repayment Schedule To be liquidated in maximum period of 30 months through a suitable
reducing DP programme. In case of a default or if the outstanding is over Rs.20.00 lacs, the
shares/debentures will be transferred in the name of the Bank.
Security:
Pledge of the demat shares/debentures against which overdraft is granted.

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CHAPTER II
Literature Review

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