STATE BANK OF INDIA Project Financing . Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).

Reserve Bank of Indiawas vested with extensive powers for the supervision of banking in India as the CentralBanking System.During those days public has lesser confidence in the banks. As an aftermath depositmobilisation was slow. Abreast of it the savings bank facility provided by the Postaldepartment was comparatively safer. Moreover, funds were largely given to traders. Phase II Government took major steps in this Indian Banking Sector Reform after independence.In 1955, it nationalised Imperial Bank of India with extensive banking facilities on alarge scale specially in rural and semi-urban areas. It formed State Bank of India to actas the principal agent of RBI and to handle banking transactions of the Union and stategovernment all over the country.Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19 th July 1969, major process of nationalisation was carried out. It was the effort of the thenPrime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the countrywere nationalized.Second phase of nationalisation Indian Banking Sector Reform wascarried out in 1980 w ith s even more banks . This s tep brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate BankingInstitutions in the Country: 1.194 9: En actment of Bankin g Regula tio n A ct. 2.195 5: N at ionalis ati on of S tate Bank of Indi a. 3.195 9: N at ion alis ati on of S B I s u bs i dia ries . 4.196 1: Ins ura nce cover extended to depo s its . KLESs Institute of ManagementStudies and Research12

STATE BANK OF INDIA Project Financing . 5.196 9: N a tionalis a tio n of 14 m ajo r banks . 6.197 1: Crea tio n of credi t guara ntee corporation. 7.197 5: Cr eati on o f region al rural ban ks . 8.1980: Nationalisation of seven banks with deposits over 200 crores.After the nationalization of banks, the branches of the public sector bank India raised toapproximately 800% in deposits and advances took a huge jump by 11000%. Bankingin the sunshine of Government ownership gave the public implicit faith and immenseconfidence about the sustainability of these institutions. Phase III

This phase has introduced many more products and facilities in the banking sector inits reforms measure. In 1991, under the chairmanship of M Narasimham, a committeewas set up by his name, which worked for the Liberalization of Banking Practices.The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a s atis factory s ervice to cus tomers . P hone banking and net banking is introduced. The entire system became more convenient and swift. Time is given moreimportance than money.The financial system of India has shown a great deal of resilience. It is sheltered fromany cris is trigger ed by any extern al macroecon omics s h ock as oth er Eas t As ian Countries s uffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.Banking in India originated in the first decade of 18 th century with The General Bank Of India coming into existence in 1786. This was followed by Bank of Hindustan. Boththese banks are now defunct. The oldest bank in existence in India is the State Bank Of KLESs Institute of ManagementStudies and Research13 STATE BANK OF INDIA Project Financing . India being established as The Bank Of Calcutta in Calcutta in June 1806. Couple of Decades later, foreign Banks like HSBC and Credit Lyonnais Started their Calcuttaoperations in 1850s. At that point of time, Calcutta was the most active trading port,mainly due to the trade of British Empire and due to which banking actively took rootsthere and prospered. The first fully Indian owned bank was the Allahabad Bank set upin 1865.By 1900, the market expanded with the establishment of banks like Punjab NationalBank in 1895 in Lahore; Bank of India in 1906 in Mumbai-both of which were foundedunder private ownership. Indian Banking Sector was formally regulated by ReserveBank Of India from 1935. After Indias independence in 1947, the Reserve Bank wasnationalised and given broader powers.

HISTORY OF STATE BANK OF INDIA

The roots of the S tate Bank of India res t in the firs t decade of 19thcen tur y, whe n the B a n k o f C a l c u t t a , l a t e r r e n a m e d t h e B a n k o f Bengal, was established on 2 June 1806. The Bank of Bengal and twoother Presidency banks, namely, theBank of Bombay (incorporatedon 15 April

1840) and the Bank of Madras (incorporated on 1 July1843). All three Presidency banks were incorporated as joint stock companies, a n d w e r e t h e r e s u l t o f t h e royal charters . T h e s e t h r e e banks received the exclus ive right to is s ue paper currency in 1861 with the Paper Currency Act, a right they retained until the formationof theReserve Bank of India. The Presidency banks amalgamated on27 January 1921, and the reorganized banking entity took as its nameImperial Bank of India . T h e I m p e r i a l B a n k o f I n d i a c o n t i n u e d t o remain a joint stock company.Pursuant to the provisions of the State Bank of India Act (1955), theR e s e r v e B a n k o f I n d i a , w h i c h i s In dia ' s central bank , a c q u i r e d a controlling interest in the Imperial Bank of India. On 30 April 1955the Imperial Bank of India became the State Bank of India. TheGovt. of Indiarecently acquired the Reserve Bank of India's stake in SBI soas to remove any conflict of interest because the RBI is the country's banking regulatory authority.Offices of the Bank of BengalIn 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. OnS ept 13 , 2008,

Bank of Saurashtra , one of its As s ociate Banks , merged w ith S tate Bank of India. S BI has acquired local banks in res cues . F or ins tance, in 1985, it acquired Bank of Cochin in Kerala, which had 120 branches. SBI wasthe acquirer as its affiliate,State Bank of Travancore, already had anextensive network in Kerala.

ASSOCIATE BANKS OF STATE BANK OF INDIA

There are six associate banks that fall under SBI, and together these six banks constitute the State Bank Group. All use the same logo of a blue keyhole and all the ass ociates us e the "S tate Bank of" namefol low ed by the region al hea dqu art ers ' name. Origin ally, the the n s even banks that became the as s ociate banks belonged to princely statesuntil the government nationalized them between October, 1959and May, 1960. In tune with the first Five Year Plan, emphasizing thedevelopment of rural India, the government integrated these banksinto State Bank of India to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega b a n k " a n d s t r e a m l i n e o p e r a t i o n s . T h e f i r s t s t e p a l o n g t h e s e l i n e s occurred on 13 August 2008 whenState Bank of Saurashtramergedwith State Bank of India, which reduced the number of state banks f r o m s e v e n t o s i x . F u r t h e r m o r e o n 1 9 t h J u n e 2 0 0 9 t h e S B I b o a r d approved the merger of its s ubs idiary, S tate Bank of Indore , w i t h itself. SBI holds 98.3% in the bank, and the balance 1.77% is owned b y i n d i v i d u a l s , w h o h e l d t h e s h a r e s p r i o r t o i t s t a k e o v e r b y t h e government.T h e a c q u i s i t i o n o f S t a t e B a n k o f I n d o r e w i l l h e l p S B I a d d 4 7 0 branches to its existing network of 11,448 . A l s o , f o l l o w i n g t h e acquisition, SBIs total assets will inch very close to the Rs 10-lakhcrore mark. Total assets of SBI and theState Bank of Indorestood atRs 998,119 crore as on March 2009.

GROWTH OF STATE BANK OF INDIA

S t a t e B a n k o f I n d i a h a s o f t e n a c t e d a s g u a r a n t o r t o t h e India n Government, most notably duringChandra Shekhar 's tenure asPrime Minister of India. With 11,448 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of Indiahas electronically networked all of its branches under Core BankingSystem (CBS). The bank has one of the largestATMnetworks in theregion. More than 8500 ATMs across India. The State Bank of Indiahas had steady growth over its history, though it was marred by theHarshad Mehtascam in 1992. In recent years, the bank has sought toexpand its overseas operations by buying foreign banks. It is the onlyI n d i a n b a n k t o f e a t u r e i n t h e t o p 1 0 0 w o r l d b a n k s i n t h e Fortune Global 500rating and various other rankings INTERNATIONAL PRESANCE OF SBI The bank has 92 branches, agencies or offices in 32 countries. It has branches of the parent in Colombo,Dhaka,Frankfurt,Hong Kong ,Johannesburg,Londonand env ir ons ,Los A ng ele s ,Malei n t h e Maldives, Muscat, N ew Y ork ,Osaka,Sydney, a n d Tokyo. I t h a s offshore banking units in theBahamas,Bahrain, and Singapore, and representative offices inBhutanandCape Town.S B I o p e r a t e s s e v e r a l f o r e i g n s u b s i d i a r i e s o r a f f i l i a t e s . I n 1 9 9 0 i t established an offshore bank, State Bank of India (Mauritius). It hastwo subsidiaries in North America, State Bank of India (California),and State Bank of India (Canada). In 1982, the bank established its California subsidiary, named State Bank of India (California), whichnow has eight branches seven branches in the state of California ando n e i n W a s h i n g t o n D C w h i c h w a s r e c e n t l y o p e n e d o n 2 3 r d N ovember, 2009. The s even branches in the s tate of

C alifornia are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, SanD iego and Bakers field. The Canadian s ubs idiary too dates to 1982 and has seven branches, four in the greater Torontoarea, and three inBritish Columbia.In Nigeria, SBI operates as INMB Bank. This bank began in 1981 asthe Indo-Nigerian Merchant Bank and received permission in 2002 tocommence retail banking. It now has five branches in Nigeria.I n N e p a l S B I o w n s 5 0 % o f N e p a l S B I B a n k , w h i c h h a s b r a n c h e s throughout the country. In M os cow SBI ow ns 60% of Commercial Bank of India , w i t h Canara Bank ow ning the res t. In Indonesiaitowns 76% of PT Bank Indo Monex.S tate B ank of India already has a branch in Shanghaiand plans to open one up inTianjin.[1]

JOURNEY AND VISION OF SBI The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalizationand profits is today going through a momentous phase of Change andTransformation the two hundred year old Public sector behemoth istoday s tirring out of its P ublic S ector legacy and moving w ith an agility to give the Private and Foreign Banks a run for their money.The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity,M o b i l e B a n k i n g , P o i n t o f S a l e M e r c h a n t A c q u i s i t i o n , A d v i s o r y Services, structured products etc each one of these initiatives havinga huge potential for

growth.T h e B a n k i s f o r g i n g a h e a d w i t h c u t t i n g e d g e t e c h n o l o g y a n d innovative new banking models, to expand its Rural Banking base,looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years.It is also focusing at the top end of the market, on whole sale bankingcapabilities to provide Indias growing mid / large Corporate with acomplete array of products and services. It is consolidating its globalt r e a s u r y o p e r a t i o n s a n d e n t e r i n g i n t o s t r u c t u r e d p r o d u c t s a n d derivativ e ins truments . Today, the Bank is the larges t provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in theFortune 500 list.T h e B a n k i s c h a n g i n g o u t d a t e d f r o n t a n d b a c k e n d p r o c e s s e s tom o d e r n c u s t o m e r f r i e n d l y p r o c e s s es t o h e l p i m p r o v e t h e t o t a l customer experience. With about 8500 of its own 10000 branches andano ther 5100 branches of it s A ss oci ate Ban ks alr ead y netw orked, t oday it offers the larges t banking netw ork to the Indian cus tomer. T h e B a n k i s a l s o i n t h e p r o c e s s o f p r o v i d i n g c o m p l e t e p a y m e n t solution to its clientele with its over 8500 ATMs, and other electronicchannels such as Internet banking, debit cards, mobile banking, et With four national level A pex Training Colleges and 54 learning Centres spread all over the country the Bank is continuously engagedi n s k i l l e n h a n c e m e n t o f i t s e m p l o y e e s . S o m e o f t h e t r a i n i n g programmes are attended by bankers from banks in other countries.The bank is also looking at opportunities to grow in size in

India asw e l l a s I n t e r n a t i o n a l l y . I t p r e s e n t l y h a s 8 2 f o r e i g n o f f i c e s i n 3 2 countries across the globe. It has also 7 Subsidiaries in India SBICapital M arkets , S BICA P S ecurities , S BI D FH I, S BI F actors , SBIL i f e a n d S B I C a r d s - f o r m i n g a f o r m i d a b l e g r o u p i n t h e I n d i a n Banking scenario. It is in the process of raising capital for its growthand also consolidating its various holdings.Throughout all this change, the Bank is also attempting to change oldmindsets, attitudes and take all employees together on this excitingr o a d t o T r a n s f o r m a t i o n . I n a r e c e n t l y c o n c l u d e d m a s s i n t e r n a l communication programme termed Parivartan the Bank rolled outover 3300 two day workshops across the country and covered over 130,000 employees in a period of 100 days using about 400 Trainers,t o d r i v e h o m e t h e m e s s a g e o f C h a n g e a n d i n c l u s i v e n e s s . T h e workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking toemulate the programme.T h e d t his CN N IB N, N etw o rk 1 8 r e co g ni ze

m o m e n t o u s transformation journey, the State Bank of

India is undertaking, andh a s a w a r d e d t h e p r e s t i g i o u s I n d i a n o f t h e Y e a r B u s i n e s s , t o i t s Chairman, Mr. O. P. Bhatt in January 2008

EVOLUTION OF SBI The origin of the State Bank of India goes back to the first decade o f t h e nineteenth century with the establishment of the Bank

of Calcutta in Calcutta on 2 June 1806. Three years later the b a n k received its charter and was re-designed as the Bank of Bengal (2January 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)follow ed the Bank of Bengal. Thes e three banks remained at the a p e x o f m o d e r n b a n k i n g i n I n d i a t i l l t h e i r a m a l g a m a t i o n a s t h e Imperial Bank of India on 27 January 1921.Primarily Anglo-Indian creations, the three presidency banks camei n t o e x i s t e n c e e i t h e r a s a r e s u l t o f t h e c o m p u l s i o n s o f i m p e r i a l finance or by the felt needs of local European commerce and weren o t i m p o s e d f r o m o u t s i d e i n a n a r b i t r a r y m a n n e r t o m o d e r n i s e India' s economy. Their evolution w as , how ever, s haped by ideas culled from similar developments in Europe and England, and wasinfluenced by changes occurring in the structure of both the localt r a d i n g e n v i r o n m e n t a n d t h o s e i n t h e r e l a t i o n s o f t h e I ndianeconomy to the economy of Europe and the global ec o n o m i c framework

ESTABLISHMENT The establishment of the Bank of Bengal marked the advent of

limited liability, joint-stock banking in India. So was the associatedinnovation in banking, viz. the decision to allow the Bank of Bengalt o i s s u e n o t e s , w h i c h w o u l d b e a c c e p t e d f o r p a y m e n t o f p u b l i c revenues w ithin a res tricted geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also itst w o s i b l i n g s , t h e B a n k s o f B o m b a y a n d M a d r a s . I t m eant anaccretion to the capital of the banks, a capital o n w h i c h t h e proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of acceptingm o n e y f o r s a f e k e e p i n g ( a n d i n s o m e c a s e s , e v e n i n v e s t m e n t o n behalf of the clients) by the indigenous bankers had not spread as ag e n e r a l h a b i t i n m o s t p a r t s o f I n d i a . B u t , f o r a l o n g t i m e , a n d especially upto the time that the three presidency banks had a rightof note issue, bank notes and government balances made up the bulk of the investible resources of the banks.T h e t h r e e b a n k s w e r e g o v e r n e d b y r o y a l c h a r t e r s , w h i c h w e r e revised from time to time. Each charter provided for a share capital,four-fifth of which were privately subscribed and the rest owned bythe provincial government. The members of the board of directors,which managed the affairs of each bank, were mostly proprietarydirectors representing the large European

managing agency housesi n I n d i a . T h e r e s t w e r e g o v e r n m e n t n o m i n e e s , i n v a r i a b l y c i v i l servants, one of whom was elected as the president of the board. BUSINESS The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cashaccounts and receiving depos its and iss uing and circulat ing

cas h n o t e s . L o a n s w e r e r e s t r i c t e d t o R s . o n e l a k h a n d t h e p e r i o d o f accommodation confined to three months only. The security for

suchloa ns w as public s ec uri tie s , common ly cal led Compan y' s P ap er, b ullion, 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 suchfinance by w ay of cas h credits gained momentum only from the third decade of the nineteenth century. All commodities, includingtea, s ugar and jute, w hich began to be financed later, w ere

either pl edged or hyp oth eca ted to the ban k. D emand pro mis s ory not e s 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 Europeansand their partnership firms. But the main function of the three banks,as far as the government was concerned, was to help

the latter raiseloans from time to time and also provide a degree of stability to the prices of government securities.

ASSOCIATE BANKS OF SBI AND IT ,S BUSINESSState Bank of India has the following six Associate Banks (ABs)with controlling interest ranging from 75% to 100%.1. State Bank of Bikaner and Jaipur (SBBJ)

2. State Bank of Hyderabad (SBH)3. State Bank of Indore (SBIr)4. State Bank of Mys ore (SBM)5. State Bank of Patiala (SBP)6. State Bank of Travancore (SBT)The s ix A B s have a combined netw ork of 4502 branches in India which are fully computerized and 2410 ATMs networked with SBIATMs, providing value added services to clientele.The combined net profit of these banks increased by 12% over the previous year to reach Rs .2277.69 crores . D epos its and advances grew by 19% and 22%, respectively, during the year. The combined Net NPA ratio of all ABs was at 0.61% as on 31st March 2008.Thehighlights of performance of the six ABs for the year 2007-08 are asfollows: (Rs. In crores) D 1 e 7 p o 8 s i 3 t 7 s 2 6 3 4 1 6 8 L o a n s

I n v e s t m e n t s 7 5 1 4 7 Total o n Assets0.86% N o .

Assets268285R e t u r n o f Branches4502

SBICI Bank Ltd (Banking Subsidiary, fully owned by SBI) SBICI Bank Ltd has two branches, fully computerised, operating inMumbai. The Bank recorded a net profit of Rs.12.85 crores during 2007-08. Deposits, Loans and Investments were at Rs.522.01 crores,R s . 3 5 4 . 9 9 c r o r e s a n d R s . 1 4 3 . 5 9 c r o r e s , r e s p e c t i v e l y , a s a t 31stM a r c h 2 0 0 8 . R e t u r n o n A s s e t s w a s a t 1 . 1 2 % w h i l e C a p i t a l Adequacy Ratio stood at 27.36% as on 31.3.2008.

FOREIGN SUBSIDIARIES

SBIInternational(Mauritius)Ltd.,OffshoreBank (A subsidiary of State Bank of India)State bank of India International (Mauritius) Ltdi s o n e o f t h e f i r s t offshore banks to be established in Mauritius in 1990, with a paid upcapital of USD 10 Million. The Bank has had a consistent record of having earned profits since its very first year of operations.S B I I M L , w i t h t h e e x p e r t i s e o f i t s m a n a g e m e n t a n d p e r s o n n e l , i s customer focussed, and offers to all its clients, all over the world, highquality, cost effective professional services and innovative products. The Bank lays emphasis on technology, which is an integral part of itsoperations having a significant impact on services rendered. It has, presently, clients spread over 40 countries.The principal activities include: Acceptance of deposits in foreign currencies mainly US Dollar,Pound Sterling, Euro and also other currencies. Attractive ratesof interest are offered.

International remittances in all major currencies throughS WIFT, quickly and effectively. L o a n s / s y n d i c a t i o n s n c i e s , Trade Services, including issuance of/negotiations under documentary letters of credits and issuance of bank guarantees. Hedging of exchange and interest rate risks on behalf of c ustomers. Sales and Purchases of foreign currencies in the Spot and Forward Market. R en der ing cus tod ial s er vices for off sho re fun ds reg is tered in Mauritius. Products tailored to suit the requirements of customers. i n m a j o r c u r r e

l i k e Euro/Dollar/Japanese Yen.

The Bank adopts the best Corporate Governance practices, and comprehensive risk management policies and systems ensu r e effective control of risks. A strong capital base, and near zero non- p e r f o r m i n g a s s e t s f u r t h e r a d d t o t h e s t r e n g t h a n d s t a b i l i t y o f t h e Bank.

STATE BANK OF INDIA (CALIFORNIA) S tate Bank of India (California), a wholly ow ned s ubs idiary in California is a California State Chartered Bank and a member of theF e d e r a l D e p o s i t I n s u r a n c e C o r p o r a t i o n . W i t h e i g h t f u l l s e r v i c e branches , the Bank caters to the Banking needs of the community, e t h n i c a n d n o n - e t h n i c a l i k e , t h r o u g h v a r i o u s d e p o s i t a n d l o a n schemes. SBIC takes prides in providing state-of-theart remittancefacility to its customers. The Bank also provides Internet Banking,Tele-Banking, ATM service and Credit Cards.

STATE BANK OF INDIA (CANADA) State Bank of India (Canada) - a wholly owned subsidiary of StateB a n k o f I n d i a - h a s b e e n o p e r a t i n g i n C a n a d a a t f o u r l o c a t i o n s Tor onto ,V a ncouve r, S ur rey and M is s is s auga , extending va rious facilities to the Indians settled in Canada such as remittance of fundsthrough a netw ork of over 9000 offices of S tate Bank of India, thelarges t commerc ial bank in India and through the branches of its Associate Banks. SBI(C) has also been instrumental in fostering tradeties between India and Canada by extending financial, advisory andlogistic support to Canadian and Indian corporate. SBI Life Insurance Company Ltd (SBI LIFE)SBI Life Insurance , Indias largest private life insurance, is a joint venture between State Bank of India and BNP Paribas Assurance SBIo w n s 7 4 % o f t h e t o t a l c a p i t a l a n d B N P P a r i b a s A s s u r a n c e t h e remaining 26%. SBI Life Insurance has an authorized capital of

Rs.2,000 crore and a paid up capital of Rs 1,000 crores.BNP Paribas Assurance is the insurance arm of BNP Paribas - EuroZones leading Bank. BNP Paribas, part of the worlds top 10 groupso f b a n k s b y m a r k e t v a l u e a n d p a r t o f E u r o p e t o p 3 b a n k i n g companies, is one of the oldest foreign banks with a presence in Indiadating back to 1860. BNP Paribas Assurance is the fourth largest lifeins urance company in F rance, and a w orldw ide leader in Creditor insurance products offering protection to over 50 million clients. BNPParibas Assurance operates in 41 countries mainly through the banc assurance and partnership model.S BI Life Ins urances mis s ion is to emerge as the leading company o f f e r i n g a c o m p r e h e n s i v e r a n g e o f L i f e I n s u r a n c e a n d p e n s i o n products at competitive prices, ensuring high standards of customer service and world class operating efficiency.SBI Life has a unique multi-distribution model encompassing Bancass ura nce, A ge ncy and Cor por ate S oluti ons . S BI Life extens ivel y leverages the SBI Group relationship as a platform for crosssellinginsurance products along with its numerous banking product packagess u c h a s h o u s i n g l o a n s a n d p e r s o n a l l o a n s .

A ge ncy Cha nnel, compris ing of the mos t productive force of over 68,000 Ins urance Advisors, offers door to door insurance solutions to customers.SBI Lifes Key Accomplishments Bagged the coveted personal finance awardO u t l o o k M o n e y N D T V Profit best Life Insurer 2008. G l o b a l l y t o p p e d a t t h e p r e s t i g i o u s M D R T 0 9 , i n

t e r m s o f n u m b e r o f Million Dollar Round Table (MDRT) members. F i r s t l i f e i n s u r e r t o r e c e i v e C R I S I L s h i g h e s t f i n a n c i a l r a t i n g AAA/Stable. ICRA too has assi g n e d i A A A r a t i n g i n d i c a t i n g highest claims paying ability to SBI Life Insurance. R e t a i n s I S O 9 0 0 1 : 2 0 0 0 c e r t i f i c a t e f o r s u p e r i o r c l a i m s e t t l e m e n t process Non banking subsidiary The Bank has the following Non-Banking Subsidiaries in India :1.S BI Cap ital M ark ets Ltd 2.S BI F unds M anagement P vt Ltd 3.SBI Factors & Commercial Services Pvt Ltd4 . S B I D F H I L t d SBI Capital Markets Ltd (SBICAP) SBICAP undertakes merchant banking activities, advisory services, project appraisal, credit syndication and securities broking.SBICAPs current focus is on infrastructure project advisory andsyndication mandates, particularly in sectors, such as, urbaninfrastructure and power, which are reckoned as the growth drivers.The other focus areas are public issues of equity, book-buildingissues, debt placements, broking, and sales and distribution.During the year, SBICAPs forged ahead in issue management, projectadvisory and structured finance, sales & distribution. It focused oninfrastructure project advisory and syndication mandates, particularlyin the energy sector, which is reckoned as the critical growth driver inthe growth of the economy.On the international front SBICAPs bagged an infrastructure (water)advisory assignment from the Ministry of National Economy, Oman

and was an integral part of the team effort for SBIs first acquisitionof a bank overseas. It was also associated with SBI for providingadvisory in respect of participation of Societe Generale AssetManagement, France in SBI Mutual Funds.It handled seven public issues out of the thirty four issues, which hitthe primary market during the period. The Company recorded animproved financial performance during the year with gross incomeamounting to Rs.175.06 crore as against Rs.142.75 crore in the previous year, a y-o-y growth of approx. 23%. PAT of Rs.88.12 croreas against Rs. 63.23 crore in the last year shows a y-o-y growth of approx.40%. SBI Funds Management Pvt Ltd (SBI FUNDS) SBI FUNDS is the Asset Management Company (AMC) set upfor managing the affairs of SBI Mutual Fund.During 2003-04, SBI FUNDS reported a total inflow of Rs.12,450crore in the open-ended funds. Total redemption amounted toRs.10,523 crore, leaving a net inflow of Rs.1,927 crore for the year asagainst a net inflow of Rs.686 crore in the previous year. The total netassets of domestic funds under management stood at Rs.5,340 croreas on the 31st March 2004 as against Rs.3,312 crores as on the 31stMarch 2003.SBI FUNDS recorded a profit after tax of Rs.10.09

crore in 2003-2004, as against Rs.6.21 crore in the preceding year and paid adividend of 10%. The Bank holds 100% equity of the Company. SBI DFHI Ltd (SBI DFHI SBI DFHI, a Primary Dealer (PD), undertakes trading in Governmentand NonGovernment securities, in the Debt Markets.S B I D F H I L t d c a m e i n t o e x i s t e n c e i n A p r i l 2 0 0 4 w i t h t h e amalga mation of D is count and F inance H ous e of India (DF H I), a subsidiary of RBI & SBI Gilts Ltd, a subsidiary of SBI. It is a major participant in the wholes ale Debt M arket both in the P rimary and Secondary Market segment with an outright turnover of GovernmentSecurities and Treasury Bills in 2007-08 at Rs.54, 919.39 crores andRs.5, 428 crores respectively.S BI D FH I Ltd is als o active in retailing of G overnment s ecurities , including small lots, and are the distributors of Mutual Fund productsof all leading funds, actively participating in the domestic interest ratederivatives and equities/equity futures markets.S BI D FH I pos ted a pos t- tax profit of Rs .85.68 crores for the year 2007-08 and paid a dividend of 10%. The S tate Bank G roup holds 67% of the companys share capital.I t p o s t e d a n i m p r e s s i v e t u r n o v e r o f G o v e r n m e n t S e c u r i t i e s a n d Treasury Bills in 2007-08 at Rs.54,919.39 crores and Rs.5,428 croresrespectively. SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)

SBI Factors, a subsidiary of State bank of India (SBI) is one of theleading factoring companies in India with an asset base of Rs. 700.10crores as on 30.09.2005. It was established in February 1991 with the primary objective to provide domestic factoring services to Small andMedium Enterprises (SMEs). Factoring is a Collection and financeservice designed to improve the cash flow position of SMEs byturning their credit invoices into ready cash. The major strength of thecompany is that it has put in place a technology driven platform for offering integrated receivables management. SBI and its AssociatesBanks hold 70% stake in SBI Factors.SBIF offers Domestic Factoring With Recourse and WithoutRecourse. Purchase Bill Factoring, Factoring of Usance Bills Under LC, Channel Financing of Dealers / Distributors and Export FactoringFacilities. All its products have been well received by its clients.SBIF has ten branches all over the country and it has plans to openthree more branches during the year. It has achieved a turnover of Rs.1489.54 Crores with Prepayment Outstanding of Rs. 459.35 crores for the year ended 31.03.2005. The profit before tax was Rs. 9.64 croresand PAT Rs. 6.12 Crores for the year 2004-05. It has recorded a NIL NPA position as at 31.03.2005. It has declared a dividend of 8%during the year 2005. It has a market share of 40.30% as on30.09.2005. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) 1. Launch of SBI Delhi, SBI Hyderabad and SBI Bangalore cityaffinity cards.

2. Launch of Flexi pay, an instalment loan programme.3. Market leadership in VISA petrol spends in India.4. Launch of e-bill payment of SBI Credit Card for SBI accountholders.5. Launch of Elite card which is offered by invitation only.6. Ten per cent maiden dividend declared

Credit Risk Management in State Bank Of India Daily limit of US $ 1000 or equivalent at the ATM and US $ 1000 or equivalentat Point of Sale (POS) terminal for debit transaction P urchas e P rotection*up to Rs . 5000/- and P ers onal Accident cover*up to Rs . 2,00,000/ Charges for usage abroad: Rs. 150+ Service Tax per cash withdrawal Rs. 15 +Service Tax per enquiry. State Bank ATM-cum-Debit (State Bank Cash plus) Card :Indias largest bank is proud to offer you unparalleled convenience viz. State Bank ATM-cum-Debit(Cash Plus) card. With this card, there is no need to carry cash in your wallet.You can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit Card.Get an ATM-cum-Debit card with which you can transact for FREE at any of over 8000ATMs of State Bank Group within our country. SBI GOLD INTERNATIONAL DEBIT CARDS KLEs Institute of Management Studies and Research, Hubli 36

Credit Risk Management in State Bank Of India E-PAY Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone, Mobile,Electricity, Insurance and Credit Card bills electronically over our Online SBI website E-RAIL Book your Railways Ticket Online. The facility has been launched wef Ist September 2003 in association with IRCTC.The scheme facilitates Booking of Railways Ticket Online. The salient features of the scheme are as under: All Internet banking customers can use the facility. On giving payment option as SBI, the user will be redirected to onlinesbi.com.After logging on to the site you will be displayed payment amount, TID No. andRailway reference no. . The ticket can be delivered or collected by the customer.

 The user can collect the ticket personally at New Delhi reservation counter . The Payment amount will include ticket fare including reservation charges,courier charges and Bank Service fee of Rs 10/. The Bank service fee has beenwaived unto 31st July 2006. KLEs Institute of Management Studies and Research, Hubli 37

Credit Risk Management in State Bank Of India SAFE DEPOSIT LOCKER For the safety of your valuables we offer our customers safe deposit vault or locker facilities at a large number of our branches. There is a nominal annual charge, whichdepends on the size of the locker and the centre in which the branch is located. NRI HOME LOAN SALIENT FEATURESPurpose of Loan Loans to NRIs & PIOs can be extended for the following purposes. To purchase/construct a new house / flat To repair, renovate or extend an existing house/flat To purchase an existing house/flat To purchase a plot for construction of a dwelling unit. To purchase furnishings and consumer durables, as a part of the project cost AGRICULTURE / RURAL State Bank of India Caters to the needs of agriculturists and landless agriculturallabourers through a network of 6600 rural and semi-urban branches. here are 972specialized branches which have been set up in different parts of the country exclusivelyfor the development of agriculture through credit deployment. These branches include427 Agricultural Development Branches (ADBs) and 547 branches with DevelopmentBanking Department (DBDs) which cater to agriculturists and 2 Agricultural BusinessBranches at Chennai and Hyderabad catering to the needs of hitech commercialagricultural projects.