STATE BANK OF INDIA

State Bank of India

State Bank of India

Introduction

State of India is a corporation which is owned by the State and it's headquarter is in Mumbai. It is the largest bank of India in terms of financial services. In March 2012, the state bank of India had assets of 360 billion dollars, 14,119 branches all over the world and it operates in 37 countries globally. By including the branches of associated banks it has 21,500 branches. The State Bank of India has its ancestry from British India. It was first established in 1806 as Bank of Calcutta and it was the oldest bank of Indian Subcontinent. In 955, Government of India nationalized the Imperial Bank of India by buying out 60% of the shares and then renamed it as State Bank of India (Arena, et al 2006).

According to the Fortune Global Ranking for world's biggest corporation, the State Bank of India is on the 285th position. State Bank of India offers a wide variety of products with the help of its strong network of branches in India and in overseas. The State bank of India is on 29th position as most reputed company of the world according to Forbes. It has the largest market share in India in terms of deposits and loans (Galindo & Schiantarelli 2003).

The organizational structure of State Bank of India shows three hierarchical levels. One if officers who are around 35%, clerical who are around 4% and subordinate staff is around 21%. Decisions are taken at the senior levels collectively. The central management committee of State Bank of India includes Chairman, Deputy managing Directors and Manager Directors. The meeting of this committee takes place twice a month in order to monitor the progress and take major decisions. This committee is established to report the Board of Directors (Frankel, et al 2004).

Internal and External Influence of State Bank of India

When Om Prakash Bhatt became the Chairman of State Bank of India at that time the bank was passing through the critical stage. State Bank of India has impact of internal as well as external factors. The external factors affecting the State Bank of India includes the market share of the bank, the economic conditions of the country, the economic conditions of the world, the banking industry of India and the Government circles. The factor which was affecting the State Bank of India was the market share. In the early years of 1970s the State Bank of India had around 35% of the market share (Demirguc-Kunt & Detragiache 1998).

In the early years of the current century the market shares of State Bank of India started to fall very badly and it had reached up till 15% of the market Share and was continuously decreasing. Another worst thing was that the State Bank of India was losing its voice and its influence. In 1990, a large account was deficit due to which it had a huge impact of the balance of ...