SBI announces expansion plans

The largest public sector lender in the country State Bank of India has announced major expansion plans for the year 2011-12, according to which it aims to open 800 branches during the time duration. After the addition of these 800 braches the total branch count of the bank would cross the mark of 14,000.

The Managing Director and Chief Financial Officer of SBI, Mr. Diwakar Gupta said “We are planning to open 700-800 branches in the current financial year against 650 set up during the last fiscal.”

Not only in the country but the bank is also looking to expand its overseas network also.

Finally, SBI hikes lending rates

The largest lender in the country, State Bank of India finally had to hike the lending rates. Along with the lending rates it has also hike the deposit rates by a maximum of 225 basis points. It has hiked both BPLR and Base rates by 75 basis points, now they stand at 14 percent and 9.25 percent.

It is most likely that a lot more banks will follow what SBI has done, it is also important t mention that despite hike in the policy rates several times by RBI it kept its lending rates unmoved and due to which the lending rates of the bank were much lower than the other players.

The Chairman of Bank of Baroda Mr. M D Mallya said "Last couple of times SBI had not increased rates, so they are now aligning with other banks."

SBI teams up with Hindustan Unilever

To implement the Financial Inclusion Plan effectively and efficiently the banks are pairing up with the corporate players. In a similar effort the largest lender in the country State Bank of India has formed an association with Hindustan Unilever (HUL).

The lender will levy the huge network created by the company under the ‘Shakti Ammas’ , a group of self help groups that distribute HUL products in the remote villages. The service is launched on pilot basis in Maharashtra. Now the self help groups along with distributing the HUL products will also open bank accounts.

The Executive Director, sales & customer development, HUL Mr. Hemant Bakshi said "The objective is to bring about financial inclusion in rural areas. By doing this, we strengthen the Shakti network and also provide villagers with the opportunity to access capital."

A HUK spokesman said "In most villages where we have started the project, we have achieved 20% penetration-i.e. almost a fifth of the households in the villages are participating in the financial inclusion project. Interestingly, almost 80% of the participants are women who find this a friendly and accessible way of reaching the formal financial system."

SBI dissatisfied with RBI's views on teaser loans

The Chairman of State Bank of India the largest lender in the country Mr. O P Bhatt expressed his views regarding the reluctance shown by the Reserve Bank of India towards the teaser home loan scheme from SBI.

“The RBI hasn’t understood our product. SBI does its homework properly and gives loans to eligible borrowers who can pay back the loans whereas in US, banks had given home loans to people who even didn’t have incomes and jobs,” he said.

The teaser loan scheme has gained a lot of popularity amongst the masses and has attracted a lot of first time borrowers primarily due to the flexible nature of the scheme. However, the recent hike in the lending rates has definitely brought a dip in the demand.

Mr. Bhatt made it clear that the lender has always followed the guidelines very diligently. “We might have committed mistakes sometimes but it has never happened where we haven’t complied with the local regulations anywhere we operate,” he said.

SBI firm about keeping teaser loans

State Bank of India made it clear that it is not going to step down from the teaser rate home loans scheme.

In teaser loans scheme, initially the borrower pays EMI at very low interest rate that increases eventually after a few years.

The head of the largest lender of the country State Bank of India, Mr Om Prakash Bhatt said "Every quarter we look at the data. It is data-based. If it's good, then I would extend it. The NPAs on my loans are the lowest and I also have the collateral of the customer's house."

Mr Bhatt believes that the teaser loan scheme has primarily benefited the common middle class families of the country. He said "About 2.92 lakh people have got loans. Where is the tease in the product? There is no risk and there is no opacity. There is no dilution of loan appraisal norms or documentation. Every Indian is eligible."

10 days vigilance leave for SBI employees

Some of the employees of State Bank of India might find it as very refreshing news but for some it is going to be as bad as a bad dream. The State Bank of India has instructed all the employees of the bank to go for a 10 day compulsive leave during a year that would also be known as preventive vigilance leave, a very common trend followed by MNCs.

During a study it was found that a lot of the employees that have established a very good reputation for their regularity and sincerity for work were found to be indulged in some kind of fraud. Such employees tend to use their good reputation and good relationship with the customers to commit a well planned fraud.

The employees that do not utilize the leaves earned by them are probable suspects as they want to keep their wrongdoings a secret and in due course of time such employees converts the fraud money into real money by corrupting the record.

The State Bank of India took this step in order to strengthen their internal processes and to keep check on scams.Some of the State Bank employees might find it as very refreshing news but for some it is going to be as bad as a bad dream. The State Bank of India has instructed all the employees of the bank to go for a 10 day compulsive leave during a year that would also be known as preventive vigilance leave, a very common trend followed by MNC Banks.

During a study it was found that a lot of the employees that have established a very good reputation for their regularity and sincerity for work were found to be indulged in some kind of fraud. Such employees tend to use their good reputation and good relationship with the customers to commit a well planned fraud.

The employees that do not utilize the leaves earned by them are probable suspects as they want to keep their wrongdoings a secret and in due course of time such employees converts the fraud money into real money by corrupting the record.

The State Bank of India took this step in order to strengthen their internal processes and to keep check on scams.

“Bank on Bike”: another creative move from SBI

State Bank of India has come up with another creative move to make the Financial Inclusion Plan a success . The bank has launched a new project known as “ Bank on Bike” at Cheriyal in Medak on pilot basis for a period of one month.

Through this service the bank plans to benefit the customers in the unbanked areas of the district. If the project proves to be a success then the bank has planned to expand this service further to 400 villages by March this year.

For the purpose the bank has appointed Business Correspondents, these correspondents would carry laptops and a data card to access the SBI site. It is based on biometric system to avoid any kind of fraud and due to this, even illiterate people will be able to access their bank account safely.

According to the official this project aims at providing the banking facilities to the people that are in unbanked areas with less cost and within short time span.

SBI working on next overseas venture

In a bid to expand globally State Bank of India has announced that it is in final stage of dealings to open a bank office in Doha. State bank of India is the largest bank in India and is ranked 8^th in Asia.

A senior official informed that "The talks and procedures for setting up of a wholesale banking unit in Doha are in the final stages,”

Opening a branch in Doha is very critical step to tap business opportunities in the gulf region. The bank further plans to expand the network in the country as well as in the Gulf region.

The bank officials believes strongly that the country has a lot of potential and the bank expects that the Doha branch will start registering profits by the end of the first year of operations.

The bank is presently ranked 62^nd globally. The overseas profit earned by the bank is around 16 percent of the total business by the bank. The bank aims to increase the overseas business share in the total profit to 25 percent.

The services would include collecting large commercial deposits and making big loans to high net worth corporates and individuals, offering bank guarantees, counter-guarantees, Lines of Credit among others. The bank also plans to offer investment and retail banking services to tap into the presence of a large number of Indian and Asian business entities and expatriates in Qatar.

The bank presently have 152 branches in 32 countries and plans to increase the total number of overseas offices of the banks to 1,000 in next couple of years.