The State Bank of India (SBI), headquartered in Mumbai, Maharashtra, stands as a prominent Indian multinational public sector bank and a financial services statutory body. Globally, it ranks as the 48th largest bank by total assets and held the 221st position in the Fortune Global 500 list of 2020, making it the sole Indian bank on that prestigious roster. As the largest bank in India, SBI commands a formidable 23% market share in terms of assets and a significant 25% share in the total loan and deposits market. With nearly 250,000 employees, it also claims the spot as the tenth largest employer in India.
A notable milestone was reached on September 14, 2022, when the State Bank of India became the third lender and the seventh Indian company to surpass ₹5 trillion in market capitalization on the Indian stock exchanges, joining the ranks of HDFC Bank and ICICI Bank.
SBI’s rich history dates back to 1806 with the establishment of the Bank of Calcutta, eventually evolving into the Imperial Bank of India. The merger of the presidency banks, including the Bank of Madras, Bank of Calcutta, and Bank of Bombay, led to the formation of the Imperial Bank of India. In 1955, under the control of the Government of India and with the Reserve Bank of India holding a 60% stake, it was renamed the State Bank of India.
In a strategic move to bolster India’s start-up ecosystem, SBI announced the inauguration of its first “state-of-the-art” dedicated branch for start-ups in Bengaluru on August 16, 2022. This initiative reflects SBI’s commitment to supporting and facilitating the growth of the country’s entrepreneurial ventures.
Compani Journey
The State Bank of India (SBI) traces its origins to the early 19th century when the Bank of Calcutta, later known as the Bank of Bengal, was established in 1806. It was one of the three Presidency banks, along with the Bank of Bombay (1840) and the Bank of Madras (1843). These banks were incorporated as joint-stock companies under royal charters and held the exclusive right to issue paper currency until 1861 when the Paper Currency Act transferred this authority to the Government of India. The Presidency banks amalgamated in 1921, forming the Imperial Bank of India, which retained its joint-stock structure without government participation.
The State Bank of India Act in 1955 marked a pivotal moment. The Reserve Bank of India (RBI), India’s central bank, acquired a controlling interest in the Imperial Bank of India. Consequently, on July 1, 1955, the Imperial Bank became the State Bank of India. In 2008, the government took over the RBI’s stake in SBI to eliminate any conflicts of interest, given the RBI’s role as the country’s banking regulatory authority.
In 1959, the State Bank of India (Subsidiary Banks) Act was enacted, turning eight banks from princely states into SBI subsidiaries. Aligned with the First Five Year Plan’s focus on rural development, these banks were integrated into the SBI system to enhance rural outreach. In 1963, SBI merged the State Bank of Jaipur (est. 1943) and the State Bank of Bikaner (est. 1944).
SBI has a history of acquiring local banks to facilitate rescues. Notable acquisitions include the Bank of Bihar in 1969, National Bank of Lahore in 1970, Krishnaram Baldeo Bank in 1975, and the Bank of Cochin in 1985. The SBI logo, designed by the National Institute of Design in 1971, symbolizes the institution’s identity.
The proposal to merge all associate banks into SBI to create a single large bank had been on the horizon. The initial step in this direction occurred on August 13, 2008, with the merger of the State Bank of Saurashtra, reducing the number of associate state banks from seven to six. Subsequently, on June 19, 2009, the SBI board approved the absorption of the State Bank of Indore, in which SBI held a 98.3% stake. The acquisition added 470 branches to SBI’s network, and the total assets of SBI and the State Bank of Indore approached ₹10 trillion. The merger process was completed by April 2010, and the SBIndore branches began operating as SBI branches on August 26, 2010.
A historic milestone was achieved on October 7, 2013, when Arundhati Bhattacharya became the first woman appointed Chairperson of SBI. Her tenure included overseeing the merger of the five remaining associate banks, further consolidating SBI’s presence in the Indian banking landscape.
Business Network
SBI offers a variety of banking products, both in India and internationally, catering to a diverse clientele, including non-resident Indians (NRIs). In managing its domestic banking operations, SBI operates through 17 regional hubs, referred to as local head offices (LHOs). These LHOs oversee 57 administrative offices (AOs) situated in key cities across India. Below the AOs are additional administrative sub-offices called regional business offices (RBOs). Each RBO directly administers around 40 to 50 branches, ensuring effective and streamlined banking services throughout the extensive SBI network.
SBI boasts a widespread presence with over 24,000 branches across India. In the fiscal year 2012–13, the bank generated a revenue of ₹2.005 trillion (US$25 billion), with 95.35% coming from domestic operations. Domestic activities also contributed significantly to the total profits, accounting for 88.37% in the same financial year. Aligning with the government’s financial inclusion initiative, the Pradhan Mantri Jan Dhan Yojana launched in August 2014, SBI conducted 11,300 camps and successfully opened over 3 million accounts by September. This initiative included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas, reflecting SBI’s commitment to expanding financial access across diverse communities.
As of 2014–15, State Bank of India (SBI) maintained a robust international presence with 191 overseas offices across 36 countries, making it the Indian bank with the largest global footprint.
- SBI Australia: Operating in Australia.
- SBI Bangladesh: Serving customers in Bangladesh.
- SBI Bahrain: Providing banking services in Bahrain.
- SBI Botswana: Although it once had a subsidiary in Botswana, it closed operations in the country.
- SBI Canada Bank: Established in 1982 as a subsidiary of SBI, listed under the Bank Act in Canada and a member of Canada Deposit Insurance Corporation.
- SBI China: Offering banking services in China.
- SBI (Mauritius) Ltd: Established an offshore bank in 1989, with 14 branches in Mauritius.
- Nepal SBI Bank Limited: In Nepal, SBI owns 55% of shares, with branches throughout the country.
- SBI Sri Lanka: Operating with three branches in Colombo, Kandy, and Jaffna, being the oldest bank in Sri Lanka, founded in 1864.
- INMB Bank (Nigeria): Operating in Nigeria, starting as Indo–Nigerian Merchant Bank in 1981 and expanding to retail banking in 2002.
- Commercial Bank of India (Moscow): SBI owns 60% of this bank, with Canara Bank owning the rest.
- PT Bank Indo Monex (Indonesia): SBI owns 76% of this bank.
- Giro Commercial Bank (Kenya): SBI owns 76% of Giro Commercial Bank in Kenya, acquired for US$8 million in October 2005.
- SBI South Korea: Opened its first branch in Seoul in January 2016.
- SBI South Africa: Operating in South Africa.
- SBI UK Ltd: In the United Kingdom.
- SBI USA: Established in 1982 as a subsidiary with ten branches in the U.S., including locations in California and Washington, D.C.
Other Information
In 1960, State Bank of India (SBI) gained control of seven regional banks from former Indian princely states, renaming them by adding ‘State Bank of’ as a prefix. These banks included State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Indore (SBN), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Saurashtra (SBS), and State Bank of Travancore (SBT), all adopting the same logo as SBI. The process of making SBI a single large bank by merging its associate banks began in 2008, with SBS merging in 2008 and SBN in the following year.
The merger journey continued, and in June 2016, the Union Cabinet gave in-principle approval for the merger of the remaining five associate banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore), along with Bharatiya Mahila Bank, with SBI. This decision followed the SBI board’s approval in May 2016. On 15 February 2017, the Union Cabinet officially approved the merger, despite initial concerns about varying pension liabilities and accounting policies for bad loans. The merger took effect from 1 April 2017, solidifying SBI’s position as a unified and formidable banking entity.
SBI has several non-banking subsidiaries
SBI’s non-banking subsidiaries, excluding the five associate banks merged since April 1, 2017, consist of:
- SBI Capital Markets Ltd
- SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
- SBI Life Insurance Company Limited
- SBI Mutual Fund
In March 2001, SBI, holding 74% of the total capital, partnered with BNP Paribas, contributing the remaining 26% of the capital, to establish a joint venture life insurance company known as SBI Life Insurance Company Ltd.
Shareholding
As of March 31, 2017, the Government of India holds approximately 61.23% of equity shares in SBI. The Life Insurance Corporation of India, also a state-owned entity, is the largest non-promoter shareholder with a 8.82% stake.
- Promoters: Government of India – 56.92%
- FIIs/GDRs/OCBs/NRIs – 10.94%
- Banks & Insurance Companies – 10.63%
- Mutual Funds & UTI – 13.72%
- Others – 07.79%
Total Shareholding: 100.0%
Listing
SBI’s equity shares are listed on the Bombay Stock Exchange (BSE) as part of the BSE SENSEX index and on the National Stock Exchange of India (NSE) as part of the CNX Nifty. Additionally, its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.
