Structure and Change at State Bank of India
Mishra was perturbed. As an AGM of the prestigious State Bank of India Staff College at Hyderabad, he was scheduled to take a session with the young probationers on the benefits of the restructuring as suggested in the Mckinsey Report. He was perturbed, not only because the report was something that was not easy to understand, but the portions of the report that he had read and understood, he was not convinced about.
Much had changed since the time when he himself had started his career as a probationer in 1976. Branch expansion had been phenomenal, turnover had increased substantially, the very nature of competition itself had changed. Nevertheless, the nature of decision making had remained the same: banking after all was a serious subject.
Surprisingly, the SBI was not a nationalized bank./ It had been created by an Act of Parliament in 1955, a logical successor to the Imperial Bank of India, which in turn had been created merging the four Presidency Banks in the 1930s. Their immediate objective in 1955 was to create within the next ten years a network of over 500 branches within the length and breadth of the country! As the only large state sponsored bank in those days, it was given the privileged status of being the treasury bank, and in the places where the RBI did not have any branches, SBI would step in for carrying on the functions, like “presiding over the clearing”. Mishra wistfully recalled the stories of yore when in the absence of the Collector in the District, the next officer that could give the order for firing, was none other than the Agent of the State Bank of India. By the time the 1969 nationalization had come around, all pretensions towards these grandiose existence had fallen by the wayside.
In 1971, SBI was the uncrowned market leader, but the top management had realized that in the increasingly competitive environment, the position that had been assumed as given, was no longer something that could be taken for granted. Other
Much had changed since the time when he himself had started his career as a probationer in 1976. Branch expansion had been phenomenal, turnover had increased substantially, the very nature of competition itself had changed. Nevertheless, the nature of decision making had remained the same: banking after all was a serious subject.
Surprisingly, the SBI was not a nationalized bank./ It had been created by an Act of Parliament in 1955, a logical successor to the Imperial Bank of India, which in turn had been created merging the four Presidency Banks in the 1930s. Their immediate objective in 1955 was to create within the next ten years a network of over 500 branches within the length and breadth of the country! As the only large state sponsored bank in those days, it was given the privileged status of being the treasury bank, and in the places where the RBI did not have any branches, SBI would step in for carrying on the functions, like “presiding over the clearing”. Mishra wistfully recalled the stories of yore when in the absence of the Collector in the District, the next officer that could give the order for firing, was none other than the Agent of the State Bank of India. By the time the 1969 nationalization had come around, all pretensions towards these grandiose existence had fallen by the wayside.
In 1971, SBI was the uncrowned market leader, but the top management had realized that in the increasingly competitive environment, the position that had been assumed as given, was no longer something that could be taken for granted. Other