BPR CASE STUDY

STATE BANK OF INDIA

HISTORY
18TH CENTURY BANK
BANK OF CALCATTA-BANK OF BENGAL
BANK OF BAMBAY
BANK OF MADRAS
1921 AMALGATION IMPERIAL BANK OF INDIA
IT PERFORMED THE ROLES OF
1. BANKER TO BANKS
2. BANKER TO GOVT AND
3. AS ACOMMERCIAL BANK

 1935 RBI CAME AND THUS ROLE AS

A CENTRAL BANK GOT OVER
NOW IT WAS WORKING ONLY AS A
COMMERCIAL BANK

At the time of independence

It had a capital base of Rs.118.5 mn,
deposits of Rs. 2.7514 bn and
advances of Rs. 729.4 mn. It had a
network of 172 branches and over
200 sub-offices spread all over India.
When the first Five Year Plan was
launched in 1951, the rural sector
was given top priority.

Liberalization of the Indian

Banking Industry
Private sector banks - January 1993.
During that period, PSBs accounted : threefourths of total banking industry assets.
BUT THEY WERE WEIGHED DOWN WITH

huge NPAs(Non-Performing Assets),

falling revenues,
lack of modern technology and
a massive and highly unionized workforce.

New entrants-Increased competition

the market share nationalized banks
began to erode (The PSBs found it
increasingly difficult to compete with the
new private sector banks and the foreign
banks.)
These banks also employed state-of-theart technology, which helped them to
save on manpower costs and concentrate
on providing better service...

Restructuring- A Major
Organizational Restructuring Planned
The key aspects involved
redesigning of branches,
providing alternate channels;
focus on a lean structure and
technological upgradation.

BPR team was

constituted in June
2003:
McKinsey & Company
as consultants

THE BPR'S BASIC GOAL

To create an
operating
architecture that
would facilitate
service delivery of

PROJECT
OBJECTIVES

RESTRUCTURING
Increasing customer satisfaction and
convenience
Freeing up time for branch manager and
branch staff to focus on sales and marketing
Simplifying process for employees
Enhancing SBI's competitiveness in the
market
Increasing the profitability through higher
market share and improved process efficiency

NEW VALUE ADDED PRODUCTS AND

SERVICES

TELEBANKING
REMOTE LOGIN
TRADE FINANCE SOLUTION-EXIMBILL
CUSTOMISED LOAN PROGRAMS
CBS ETC.
THIS TO CHANGE THE IMAGECUSTOMER FRIENDLY

ALLIANCES AND TIE UPS

AUTOMOBILE (AUTO FINANCEEgMARUTI)
INSURANCE
MUTUAL FUND
PROJECT FINANCE
MEDICAL EQUIPMENT COMPANIES

MARKETTING INITIAVES TO
ENHANCE REACH

Segregating and targeting existing high value customers,

Cross sales of other products,
Setting up call centers
Outbound sales force to secure new customers
Database marketing to pursue large and medium sized
corporate, government and trade finance customers (to
draw increased revenue from cross selling, lower costs
and increased customer loyalty)
Also it extended of hours of work
Aggressive marketing through print and television media.
SBI increased daily working hours by two hours
Sunday banking was introduced

OUTCOMES OF
REENGINEERING
An increase in profits for the fiscal 2003-04. Net profits
stood at Rs 36.81 bn for the fiscal ended 2003-04 as
against Rs 31.05 bn the previous fiscal, an increase of
18.55 per cent.
Operating profits stood at Rs 95.535 bn compared to Rs
77.754 bn in the fiscal 2002-03.
In spite of SBI's efforts to reduce workforce, staff costs
rose by 13.3 per cent, mainly due to additional
contribution to pension fund and provision for leave
encashment.
The net NPA level came down from 4.5 per cent in the
fiscal 2002-03 to 3.5 per cent in 2003-04. SBI aimed at
2 per cent NPA by 2004-05