The Peoples’ Bank - State Bank of India

On Jul'1, 1955 the Imperial Bank of India was reconstituted by an Act of Parliament to create State Bank of India (SBI) to perform the functions of a commercial bank. SBI is in the top 50 banks in the world. It outshines all others in serving the economically weaker sections of society and providing equal opportunity with its vast branch network and latest technology platform. It has 42 crore customers with a balance sheet over Rs 30 lakh crore across 36 countries. SBI has served the interest of the common man by opening over 24,000 branches and 59,000 ATMs. Its designed products and various services cater to all customers’ needs.

Good customer service is the heart of banking service delivery. The effective strategy of delivering quality service has now shifted to technology (app based) driven orientation for superior services. The emergence of private / foreign banks enhanced the expectations of customers. Data revolution is crucial today as customers want swift / high speed transactions due to time constraints. Newly launched lifestyle and banking app YONO has everything in one app “food at your doorstep and entertainment at your fingertips”. SbiINTOUCH is a commendable feat for digital India. Also BHIM, Buddy, SBI Pay, SBI Anywhere, Online SBI are successful applications. After SBI merger in April 2017, Government now considers merging of leftover 20 PSUs into five big lenders (PNB, Canara, Union, BOB and BOI) to overcome the pressure of globalization of regulation and improve ranking.

Due to high amount in NPAs, there is crisis in Banks, resulting in less credit flow. At the same time capital adequacy for piling bad loans must be conserved and utilized efficiently. Our country needs sound banking system for the healthy growth of the economy. The big corporate defaulters escaped easily from regulator’s scanner despite clarion call by lenders. They have diverted loans taken for specific purposes by using regulatory backlash. And the plight of small farmers due to massive crop failure and farmers’ suicide afflict the low rainfall region. India’s agriculture sector contributes a lot to GDP but its products are sold below MSP. Rural distress often prompts states to offer relief to waiver of loans. The subsidy culture is not sustainable in the long term.

Wilful default by large corporates has nearly wrecked the banking system. There are 12 companies that constitute 25% of total NPAs amounting to more than 1 lakh crore. They are from Bhushan steel/power, Lanco, Essar Steel, Alok Ind, Amtek Auto, Monnet Ispat, Electrosteel, Era Infra, Jaypee, ABG Shipment and Jyoti. Vijay Mallya owes Rs 9,000 crore to 17 banks. Nirav Modi, Mehul Cholsi did the same by cheating banks of $2 billion vide the Punjab National Bank. Now extradition has been sought by Enforcement Directorate from the UK, Belgium etc. India’s stress assets have risen to $146 billion. To cover up, the government plans to infuse Rs 2.11 lakh crore recapitalisation for PSU banks. To crack down on loan defaulters, new ordinance to speed up the NPA resolution process for time bound winding up of companies and recovery of secured loans is required. All scheduled commercial banks have written off 2.4 lakh crore. Banks have argued that write off is a regular exercise to clean up the balance sheet and continue to retain the right to recovery. But it could recover only a tiny fraction due to long protracted process. SBI reported a whopping loss of Rs 7,718 crore in Q4 as NPA provisions doubled to Rs 22,096 crore from Rs 11,740 crore.

The banking industry is Facing the bad loan trouble. Tools of recovery like Debt Recovery Tribunals and SARFAESI Act, 2002, have become blunt in the face of huge corporate accounts. Newer mechanisms are needed today. India cannot afford a soft approach as banks are dealing with public money. 14.5 crore accounts opened under PMJDY scheme is another success story of financial mainstream of Indian Banking industry. Priority sector lending to the most needy and the most alienated of the borrowers is another area of concern. Bank has a dual role of earning a profit and expanding banking services to the population throughout India. After demonetization, there has been significant outflow of CASA (Current Account Savings Account) deposits. Revision in saving bank rates would enable the bank to maintain MCLR (marginal cost of fund based lending rate) at the existing rates, benefitting a large segment of retail borrowers, agriculture and affordable housing segments.

SBI gives importance to Micro-Small and Medium enterprises (MSMEs) for promoting entrepreneurial ambitions and profound impact on banks’ financing. The success of MUDRA Yojana stories goes to SBI only which places faith on the skills and strength of Indian citizens.

The SBI is owned by the people of India. The Bank is a corporate citizen, where resources and benefits derive from operating in a society and therefore owe a solemn duty to the less fortunate and under-privileged members of the same society. SBI Foundation is a non-profit subsidiary of SBI launched to undertake CSR activities of SBI. It is spending 100 crore every year on CSR. Besides this, banks have to nurture a healthier balance sheet to carry out the responsibility of supporting economic growth of India.

On SBI Foundation day, three flagship programs are launched namely Centre for Excellence for Persons with Disabilities, SBI Gram Seva and SBI Youth for India. SBI has been conferred the National Award for their valuable child welfare services thrice by the Govt of India under SBI CSR Activity. It launched Senior Citizen Facilitation Centre for CDM, GCC, Swayam passbook printing machine. As long as the SBI is on the digital platform, customers can transact safe digital banking experience through app based revolution such as BHIM, Buddy, YONO, SBI Pay, SBI Anywhere, Online SBI at 24×7. Ref. : http://www.theshillongtimes.com/2018/07/03/sbi-the-peoples-bank/ --- Dated: Jul'03,2018.