Description
From Past to Present: Discover the fascinating history of the State Bank of India (SBI), a financial institution with over two centuries of legacy. Let’s rewind the clock and explore key milestones that shaped SBI into the powerhouse it is today.
Success Story
State Bank of India. On hearing this name, perhaps the first thing that comes to our mind would be the bad service and bad behavior of the employees because they disappear for hours on the pretext of lunch time.
Sending people to different windows for small tasks is the daily work of many branches of SBI. But despite this, show a medical report. While the net profit of Reliance in the first quarter of the financial year 2014 was 16 thousand ₹ 11 crore, the net profit of SBI was 18 thousand 500 ₹ 37 crore. That means SBI has left behind the reign of Asia’s richest man Mukesh Ambani. But how did this happen? How did State Bank of India become India’s largest bank? How 218 years ago it was started by the British to fight against us.
In today’s Blog we are going to discuss everything in detail. SBI Yes, this is the same bank from which Vijay Mallya had absconded with 9000 ₹90 crores. But despite this it is the largest bank of India. Although most of us have an account in this bank. Do you know its beginning? Why was it done? Actually this. The bank was started by the British so that they could kill the Indians who stood against them. This bank was started on 2 June 1806 i.e. about 218 years ago and at that time it was named Bank of Kolkata.
Actually, in 1798, Richard Wellesley was sent from Britain to India as the Governor of India and as soon as he arrived, he started irritating the people. A year after his arrival, i.e. in 1799, Richard captured Mysore by defeating Tipu Sultan and then four years later, a huge war took place between the British and the Marathas, which we know today as the Second Anglo Maratha War. To support Richard Wellesley in this war, the British used to send money to him through a banking system so that with the help of this money Wellesley could make his side even stronger in the war.
Now till that time there was no official name for this banking system, but later it was named Bank of Calcutta. After this, on January 2, 1809, the name of this bank was changed once again and this time it came to be called Bank of Bengal. After this, another phase came when the East India Company started two Presidency Banks, the first of which was Bank of Bombay and the second was Bank of Madras. Actually, Presidency Bank includes those banks which have the right to issue currency notes.
Now seeing these banks some Indians have There was also the thought of forming a private bank but no one could achieve much success. The most famous among these private banks was Union Bank, which was started in 1828 by Rabindranath Tagore’s grandfather and Dwarkanath Tagore, who was counted among the big businessmen of that time. After this, in 1862, branches of Bank of Bengal were also established in Patna, Mirzapur and Banaras so that the voices raised for independence from that particular place could be suppressed.
The Paper Currency Act was implemented during 1861 itself and Bank of Bengal was the only bank which got the right to issue notes during the British era. Now, although this bank was created to benefit the British, it also had many Indian customers, some of whom are famous names like Scientist Jagadish Chandra Bose. India’s first President Rajendra Prasad, politician Dadabhai Naoroji and Nobel Prize winner Rabindranath Tagore. And friends, even today State Bank of India is very proud to count the names of these people among its customers.
So friends, till now we have learned how this bank was started 218 years ago, but how did it officially become State Bank of India? Let us now know the story behind this. So friends, on 27 January 1921, along with Bank of Bengal, two more banks, Bank of Bombay and Bank of Madras, were merged to form a new bank which was named Imperial Bank of India. Then came 1947 when India got independence from the British and even after this the Imperial Bank of India continued to provide its services as before.
In fact, it remained the Imperial Bank of India for eight years after independence. But in 1955, Reserve Bank of India took control of its 60 percent stake and then on 30 April 1955, the name of this bank was changed to State Bank of India. Later, from 1969 to 1985, SBI acquired Bank of Bihar, National Bank of Lahore, Krishna Ram Baldev Bank and Bank of Kochi. Along with this, those seven regional banks which were once started by the kings of those states were also merged into SBI.
In this way, SBI is today the largest bank in India with 30% market share and not only this, it is also counted as one of the largest employer because this bank alone provides employment to 2.5 lakh people. Now friends, as we are seeing the reviews of SBI on the screen, the entire internet is full of such negative reviews and often different types of memes on SBI also become famous. But despite this, you will be surprised to know that SBI is a most trusted bank which has more than 48 crore customers.
Despite being troubled with service, people still go to SBI Why choose only? Let us know the reason behind this also. First of all, SBI has opened more than 22 thousand 405 branches to provide convenience to its customers. Besides, 65 thousand 627 ATMs and 72 thousand CSPs i.e. Customer Service Points take this bank to every village. Not only this, its big presence can be seen in foreign markets also, because SBI is available in 36 countries.
Apart from this, as you must be aware that there are a large number of people in India who are not able to maintain the average monthly balance of private banks and for them too, SBI emerges as the best option. Because while in private banks you need a minimum average monthly balance of Rs 10 to 15,000 to keep your account active, in SBI it is only Rs 1,000. Apart from this, as you must have seen that SBI has so many branches that you can get their services in every corner of the country. In such a situation, everyone, whether poor or rich, can take equal advantage of their services.
Whereas most private banks are interested in serving only premium customers. Therefore, they do not open their branches in those areas where their target cannot be achieved. At many places, SBI has also opened its special agriculture branches, with the help of which it provides benefits of various schemes to the farmers ranging from crop insurance to animal husbandry. Apart from this, as it is a government bank, SBI does the maximum work of making people aware about whatever scheme is implemented by the government and making it available to as many people as possible.
So when customers are getting so many benefits from a bank and where private banks charge expensive services, free maintenance and many other types of charges, it is obvious that people will have faith in SBI. But friends, not only account holders trust this bank but investors also like it very much. Because if we do not go back too far and look at the returns of its shares only in the last three years, it is around 180 percent. But the main question that arises is how SBI is making such huge profits. It left Ambani also behind.
So actually friends, SBI has always been not profitable since when private banks started establishing their footing. So this will impact many government banks. But started getting affected, one of which was SBI. In the third quarter of 2017, it was Rs. 2400 crores and in the first quarter of 2018, it was Rs. 20400 crores. There was a loss of 7,700 ₹18 crore in the quarter, which was the second largest loss in the banking history of India.
Now you might be wondering why the second one? So friends, let us tell you that in terms of loss, Punjab National Bank is at number one, which was defrauded of more than Rs 13 thousand crore by diamond merchant Nirav Modi just a few years ago. And before PNB and Reserve Bank of India came to know about it, he had absconded abroad. Well, the only reason for these losses of SBI cannot be attributed to the increasing number of private banks, rather the major reason behind this was bad loans.
And friends, it is the result of these bad loans that Vijay Mallya has left the country in 2016 after taking SBI’s money. Actually SBI was the largest lender of the country. But the problem started when the premium customers stopped repaying the loan. When they did not return the loan amount even after a long wait, the bank started giving more loans to these defaulting customers so that they could clear their old loans. But everything happened exactly the opposite and SBI went into loss.
After which RBI came into action and started investigating everything closely. Asset quality started being reviewed in Government Bank. Accounting practices were corrected. Also, some banks were recapitalized and some were merged. After taking all these steps, like other government banks, SBI also started generating profit again and in this way it has left behind India’s most profit making company Reliance Industries. Technology has also played a very important role in taking SBI to where it is today.
To make its services smoother and data more secure, SBI has also invested in many advanced technologies. Such as Blockchain, Artificial Intelligence and Big Data Analytics etc. With the help of these technologies, SBI has made the transaction process secure. Has brought improvement in customer service and has also achieved considerable success in managing complaints effectively. Now some of you might be thinking that all this is just talk because when we visit the bank, no employee even listens to our complaint.
So friends, you are absolutely right in your place and earlier I also considered them useless. But when I started looking at things from their angle, everything became clear. That’s why if you look at the sites of those employees, you will get an idea of the real reason behind their rude behaviour. So as we saw that SBI has more than 2,00,050 thousand employees but despite this the system of this bank is considered to be the most overloaded. To manage these, the bank does not have as many employees as are required to run their operations smoothly. That is why many customers complain that the service of SBI is very poor.
Actually, the reason behind all these problems is that an SBI employee handles around 1700 to 1800 zero people every day, which is a big challenge in itself. Now for a few moments, put yourself in their place. If you have to handle only 500 people in a day, then what will be your mental condition and for those employees, if it was just a matter of one or two days, then they would have handled it somehow. But they have to go through the same experience every day. And friends, SBI is also aware of this, so to reduce the number of customers coming to the bank, it had launched its mobile app which was named YONO.
Through this app, account holders can apply for credit card, debit card, passbook and check book without visiting the branch. Apart from this, SBI also provides many facilities to the customers like opening home loan, KYC and saving account with the help of the app while sitting at home. In this way, the fastest growing bank in India’s banking sector is SBI, more than half of whose profit goes to the government. And the good thing is that that money is invested back in the development of the country, which benefits everyone.
In this way we can say that SBI is like a cash out for the government also. But friends, many great people have had a hand in making this cash. For example, today SBI is the third largest mutual fund house in asset management, in which former chairman D N Ghosh has played a big role. Also, in 2017, when SBI was going through very bad times and its losses were continuously increasing, the first woman chairman of SBI, Arundhati Bhattacharya, did a lot of work to make it profitable again.
Similarly, former Chairman Rajneesh Kumar also took a very futuristic step by creating YONO, with the help of which the functionality of the bank branches not only improved but the customer base also increased significantly. And friends, to take SBI to this level, not only the senior officials but also the hard work of every employee who works more than their capacity has been done. That is why next time while criticizing the service of SBI, you must think about these aspects also. By the way, what has been your experience with SBI, please tell us by commenting.
Anyway, see you again with the powerful explanation of the Success Story.
