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FACULTY OF MANAGEMENT STUDIES
INSTITUTE OF RURAL MANAGEMENT, JAIPUR
Regaining its Lost Glory -State Bank of India (SBI)
FACULTY GUIDE SUBMITTED BY
MRS.RUCHI SISODIA AASHISH VARGHESE GEORGE

INTRODUCTION
State Bank of India (SBI), with roots tracing back to 1806, was an opinion and market leader in the economic sphere
especially in the rural heartlands. In the 2000s, with the advent of private and foreign banks even in the rural sector
of India, the country’s oldest bank with over 200,000 employees and 16,000 branches started losing its supremacy
and customers.
The SBI branch in the Bihar University in Muzaffarpur felt its unquestioned supremacy threatened. It was due to
lack of customer orientation, outdated technology and inefficient business processes. These problems were
compounded with the employee pool that had become an ageing group and lacked customer focus. In the early
2000s, the private sector banks endowed with younger workforce, laced with superior technological capabilities
provided higher quality of customer service which surpassed the public sector banks. Suddenly, SBI figured low on
the list of the rising segment of young salaried or self-employed folks in the town. The frontline staff’s motivation
suffered as the number of customers dwindled every passing month. SBI carried the legacy of being state owned
along with outdated technology and low customer responsiveness.
Overall SBI, once a force to reckon with, was languishing in inertia especially in the rural sector. The branch
manager, Mr. Diwakar Singh at the small bank inside the Bihar university campus was perplexed with the declining
number of customers.
SWOT analysis of
State Bank of India
Strengths
• A network of the bank: The bank around 198 offices in 37 countries; 301 correspondents in 72 countries, 278,000
employees, 420 million customers, and around 24,000 branches and 59,000 ATMs making it the owner of one of the
largest banking networks in the world.
• Goodwill: The bank is one of the oldest in the region and has been having a steady inflow of customers from all
income brackets. They have also had good relationships with stakeholders which have created a goodwill amongst
customers.
• Special privileges: Being one of the most popular nationalized banks, the bank has a lot of special privileges including
a special act for itself.
• Strong backing from the government: SBI is one of the first initiatives in the government in the banking sector and
since then has always been its top priority. The bank is also a partner in the e-governance project of the government.
• A wide variety of services: The State Bank of India has a wide variety of services like investment banking, online
banking, stockbroking, rural banking and loans amongst others.
• Strong brand: The bank has a very strong image amongst customers, visibility and there have been numerous instances
of strong word of mouth advertising about the bank.
Weaknesses
• Limited market share growth: Earlier when banking was not privatized SBI had
undoubted leadership. But with the privatization of banking, there has been a
surge in the competition which has resulted in a drop in market share.
• Bad debts: State Bank of India has been facing a problem of being unable to
resolve bad debts which have resulted from the non-repayment of loans.
• Huge size: After the merger with five of its associate banks, SBI has become the
largest banker in India and the network in huge with branches even in remote
locations. This huge size can create serious challenges in management.
• Loan issues: There have been issues in loan repayment, bad loan, non-performing
assets and loan restructuring especially in the case of the associate banks.
• Customer service: Due to many salary accounts and government accounts with
SBI, the branches are overpopulated creating too much dissatisfaction and
frustration for users. Thur customer service is known to be bad from SBI
Opportunities
• Restructuring: The banking industry in India was restructured by the government
helping the sector to cope up with the challenges of the new financial environment.
• Growing income brackets: There is a steady growth of per capita income in India
which in turn indicates a growing economy. These signals are positive for the growth
of the banking business.
• Increase in borrowing capacity: The society has undergone a change in the structure of
double income households with high disposable income. This has created a resultant
change which is an increase in borrowing capacity of the customer.
• Increased use of technology: The urban Indian is very comfortable with all latest
technologies such as mobile, internet and computers. This shows a lot of promise for
services such as online banking. This is also backed by a growth in internet shopping
behavior which makes credit cards a must.
• Digitisation: Banks have become more relevant with digitization and demonetization
and this will see an increase in the number of bank accounts as well as for credit card
usage.
Threats
• Bad Loans and Non-performing assets: India has a history of
bad loans and amounts to a total of Rs 10 lakh crores. Non-
performing assets in India are estimated at 10.2% by March
2018, from 9.6% in March 2017 in comparison to the statistics
last year September 2016, gross NPAs were at 9.2%.
• Cyber threats: There has been a lot of issues lately on
information theft and security. These cyber threats from a
headache for the banks which can affect the image of the bank
if not managed well.
Learning
• 1. A customer responsive culture is essential to thrive in today’s

competitive landscape even in the rural markets.
• 2. Communication, employee engagement, and a strong leadership are

three two key pillars of driving a successful organizational change.
• 3. The success of SBI’s cultural transformation is not only an

inspiration for ageing businesses but a recipe to excel in the face of
change and competition.
Q/A
1:)What are the ways in which organization can engage the employees as advocates of change?
I. PROPER COMMUNICATION WITH THE EMPLOYEES.

II. EMPLOYEES ENGAGEMENT WERE INCREASED.
III. BETTER PAY SCALE TO EMPLOYESS.
IV. MOTIVATING EMPLOYEES TO WORK.
V. ALING ALL EMPLOYEES TOWARDS COMMON GOAL.
2:) Why and how should organizations adopt a customer responsive culture?
I. INORDER TO UPBRING THE DECLINING SHARES OF SBI IN MARKET.

II. IMPROVE THE WORKING CULTURE IN SBI.
III. CUSTOMER SATISFICATION IN PIRORITY.
IV. TECHNOLOGICAL UPGRADTION.
V. SBI DIARY AND SBI CALENDAR WERE GIVEN TO THE CUSTOMERS.
3:) What is the role of leadership in implementing a successful organizational change?
I. Commitment from leaders

II. Communication for trust and motivation
III. Persuade, engage and drive change
IV. Stay connected, stay committed
V. Participayion from all the emploees

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FACULTY OF MANAGEMENT STUDIES

INSTITUTE OF RURAL MANAGEMENT, JAIPUR

Regaining its Lost Glory -State Bank of India (SBI)

FACULTY GUIDE SUBMITTED BY

MRS.RUCHI SISODIA AASHISH VARGHESE GEORGE

• 1. A customer responsive culture is essential to thrive in today’s

• 2. Communication, employee engagement, and a strong leadership are

• 3. The success of SBI’s cultural transformation is not only an

I. PROPER COMMUNICATION WITH THE EMPLOYEES.

I. INORDER TO UPBRING THE DECLINING SHARES OF SBI IN MARKET.

I. Commitment from leaders

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