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State Bank of India

BSE: 500112|NSE: SBIN|ISIN: INE062A01020|SECTOR: Banks - Public Sector
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Directors Report Year End : Mar '17    Mar 16

I SUPPORT AND CONTROL OPERATION

1. HUMAN RESOURCE AND TRAINING

1.1 PEOPLE ARE THE MOST VALUABLE ASSET

Your Bank witnessed various challenges during the year but remained on a growth path by transforming itself. This was made possible by the entire bank being guided by a common vision, shared values, and following high standards of integrity and governance. The powerful performance of your Bank is the outcome of a talented and hardworking set of employees, constantly motivated towards driving your Bank’s success. The HR policy of your Bank is constantly being synchronised to meet business goals, and increase employee empowerment. Your Bank is committed to provide an enabling workplace, ensuring employee welfare and offering opportunities to develop and grow.

The Summarised HR Profile of the Bank is as under:

Your Bank’s HR vision has been built around principles of inclusiveness, empowerment and development. Its people are its strength and your Bank is proud of its performance oriented and meritocratic culture. Your Bank’s Career Development System (CDS) has been highly successful in ensuring a credible, data backed and performance evaluation process. The system ensures strong accountability, performance visibility, and greater alignment between individual and organisation goals. Besides bringing fair and transparent assessment, CDS also drives employee development through a thorough competency assessment every year.

For a bank with a large footprint and diversified set of roles, specialisation of skills becomes very important to drive success. To foster optimum expertise and ensure deep domain knowledge, your bank has defined career paths for its Scale II-V officers along with 7 Job Families- Credit & Risk, Sales, Marketing & Operations, HR, Finance & Accounts, Treasury & Forex, IT and Analytics.

Based on officer’s interest and expertise, they specialise and rotate within roles of any of these job families. To ensure optimum exposure and ‘Right person for the Right job’, your Bank is in the process of deploying a scientific postings allocation process through the use of our automated tool ‘PROSPER’.

A strong and eminent leadership team, coupled with an engaged and enthusiastic young talent group has been a strong force in driving your Bank’s success. Your Bank is focused on developing processes to attract the best talent within the country. It has revamped the recruitment process and developed a stronger employee value proposition to attract better talent. Opportunities of overseas exposures at junior levels has been introduced for attracting newer talents to come on board. The recruitment strategy is strongly being supported by campus re-branding activities, greater engagement through recruitment portals and digital marketing plans.

In FY2017, Your bank added 13,097 young tech savvy and customer friendly employees. The list includes over 2000 POs, 160 Management Trainees, over 100 domain experts in wealth management, Digital and e-Commerce and clerical employees.

The total staff strength of the Bank is as under:

Category

As on 31st March 2016

As on 31st March 2017

Officers

80,818

81,041

Associates

88,606

92,979

Subordinate Staff & Others

38,315

35,547

Total

207,739

209,567

Inclusiveness and diversity: With the growing scale, your Bank ensures adherence to the core principles of inclusiveness and gender equality. Your Bank employs over 46,676 women employees across geographies and at different levels of hierarchy. Nearly 2,000 branches are being headed by women officers. Your bank has laid utmost emphasis to ensure a healthy and conducive work environment for its women employees.

Your Bank maintains a zero tolerance policy against sexual harassment at workplace and has put in place an appropriate mechanism for prevention as well as redressal of complaints. The affirmative action as directed by GoI is taken care of during the recruitment as well as promotion process. Out of 21 cases of sexual harassment reported during the year, 15 have been disposed off.

Furthermore, your Bank provides reservations, as per GoI directives, for Scheduled Castes, Scheduled Tribes and Other Backward Classes in its workforce. It therefore, has a share of SC, ST, OBC and differently-abled persons, amongst all cadres in the work force. Apart from the corporate center, Liaison officers have been designated at all 14 circles to effectively redress grievances of SC/ST employees.

It has been the constant endeavor of your Bank to adopt best in-class industry practices and processes in people management. Few key recent interventions undertaken by your Bank are mentioned below:

- Performance Linked Incentive (PLI) scheme has been re-designed to make it more broad-based and in-line with Career Development System grade as benchmark. Separate ‘Reward and Recognition’ scheme was introduced to appreciate achievements beyond normal course of business.

- Leveraging advanced technologies, a ‘Work from Home’ policy has been introduced in your Bank. This is an employee friendly measure to help them balance personal and professional aspirations.

- For attracting and retaining talent and making SBI the first choice amongst young generation, your Bank is also in the process of restructuring its compensation package. Your Bank is in the process of introducing ‘Smart Compensation Package’ for officers up to Scale III from FY2018 onwards.

- Compensations in the form of leased housing, medical reimbursements, cashless treatment at over 100 hospitals, and other employee friendly policies like sabbatical, flexitime scheme and medical insurance for retired employees has been formulated to attract young talent.

- With the focus of promoting ethics in the organisational fabric, an Ethics and Business Conduct department has been set-up, and is headed by the Chief Ethics Officer of your bank.

A Learning Culture

People development is at the heart of your Bank’s agenda. It offers a slew of learning interventions not only at each stage of the employee lifecycle, but also specialist programs according to the nature and role of the employee’s function. Such focused learning interventions, aimed at enhancing the technical and managerial competencies, have not only helped groom managers in their current role, but are also focused on their evolution as future leaders and visionaries of your Bank. Furthermore, your Bank is in the process of designing individual development plans for each of its potential leaders to empower and enable them in their growth path.

Industry Relations

Your Bank has a strong focus on industrial relations. It holds consultative meetings with Associations and Unions as a part of having a constructive dialogue for understanding and addressing grievances of various employees. These consultations are regularly carried out at Corporate Centre, as well as the Circles. Various issues raised by federations are examined and necessary action is undertaken.

1.2 STRATEGIC TRAINING UNIT

Towards the objective of maintaining the brand of an enduring value creator and a great place to work, your Bank continues a planned, proactive training process for individual growth and organisational effectiveness. New techniques and methodologies are adopted and imported on a regular basis from across the globe to establish a virtuous circle of teach and learn to enhance quality of training and transform employees into knowledge workers so that they can carry forward our initiatives towards creating customer delight. The training system functions under the overall supervision and guidance of the STU. The training apparatus at present consists of five Apex Training Institutes (ATIs) and 43 State Bank Learning Centres. Your Bank has been able to create a virtual Knowledge university within the institution, with a capacity of classroom training of 3,400 employees per day in all areas of Banking, Economy, Leadership, Ethics, Marketing, Administration and Soft Skills, in addition to a robust digital learning platform. It is creating links and providing training support to neighbouring countries and in the Middle East

Other Training Initiatives:

Agradoot : A specially designed mass-communication programme named ‘Agradoot’ was organised country wide for subordinate staff including Bank guards to focus on the relevance and importance of their role in your Bank; and motivating them towards enhanced customer service. Around 32,000 members of subordinate staff were trained and many of them expressed it was for the first time in their careers that they felt highly cared for.

Certification Programme on Credit: It was launched to develop adequate credit skills and to keep the officials updated at all times. It focuses on the commercial credit skills required to handle the entire loan life cycle of Advances.

Certification Programme for Branch Managers (CPBM): It has been developed for officers placed in operations and marketing mainly for the first time/prospective Branch Managers.

Mentoring of Branches: The initiative of Branch Mentoring by Top Executives has a renewed focus on inclusive mentoring with qualitative impact on the branches which are facing issues like customer complaints, NPA and IR etc. Each mentor is engaged with only two branches identified by the Circle.

Quizzing Culture: Promotion of Quizzing Culture continued with holding of regular products/processes quiz contest by business verticals/departments. A ‘Mega Quiz’ spread over four levels is also organised at the corporate level.

Sweating of Assets: Your Bank’s training footprint is getting inclusive and global. Your Bank has opened up its training system to other outside institutions including Public and Private Sector Bank officers and other Government Departments.

Contribution to Nation Building: Your Bank’s training system contributes in many ways towards nation building. SBLCs have contributed extensively to financial Literacy/ financial inclusion by conducting classes in various schools/engineering colleges and in villages. During the demonetisation period, your Bank conducted several onsite/offsite awareness workshops/seminars for the masses on digital transactions. Your Bank also trained personnel for various payment Banks, which are recent additions to India’s financial landscape.

Digital Initiatives:

Mobile App for POs &TOs: An Application has been created to serve as a dashboard for tracking and monitoring the progress of newly joined PO’s and TO’s. This can be used for broadcasting inspiring quotes and videos, announcements, lesson completion status, trainings attended and various other requirements for the entire period of probation.

Video Lab: A state-of-the-art video lab has been established, wherein video lessons of your Bank’s faculty on various subjects will be recorded. The lab will also be used for digital storage of photographs and videos of important training events across the country, with the aim of creating in-house audiovisual content for training.

STU Website: The website of the Strategic Training Unit has been completely revamped. It is now the epicenter, where all learning materials are accessible by all Apex Training Institutes and SBLCs at one place via the Intranet.

Feedback for External Trainings: A web based application for providing feedback by officials attending external trainings has been developed and rolled out.

Training Dash Board: An in-house tool ‘Training Dash Board’ has been developed and made available to all the HR functionaries to arrive at data of trained/untrained staff for easy follow-up.

Inclusion Centre:

An Inclusion Centre for differently-abled employees is operational with an objective to enable financial inclusion, training, empowerment and upgradation of skills of people with different abilities in a systematic way. Some of the activities / initiatives undertaken by your Bank are mentioned below.

- Specially designed programmes have been conducted for differently-abled employees like training for visually and hearing impaired employees of your Bank.

- Employees have been sensitised for inclusion and mainstreaming of employees with different abilities during post training - field implementation.

- Grievance redressal for differently abled employees has been entrusted to Inclusion Centre located at Corporate Centre.

- Provided Talking software and OCR Readers/Scanners to VI employees.

- Created three Specialised Communities in SBI Aspirations for Differently Abled Employees (VI /HI / OH).

- Identified four SBLCs on pilot basis to promote complete barrier free accessibility for persons with different ability.

Training Challenge of Merger:

On the face of stiff challenge to train large number of employees of five Associate Banks and Bhartiya Mahila Bank on the products and processes of SBI within the quickest possible time, your Bank has geared up the training machinery with various special programmes designed and scheduled. Further, with a view towards easing the transition of these employees into the Bank, a ready reckoner on popular asset products of P-segment, SME segment, Agri segment, REH&HD and Tech products has been distributed. Twelve Training establishments of Associate Banks will come into the fold of SBI from day one of merger.

State Bank Institute of Management (SBIM) Kolkata:

The new ‘Centre of Excellence’ will become operational in the second quarter of FY2018.

Awards:

Your Bank is the humble recipient of the following awards for its training initiatives:

- Golden Peacock National Training Award: As a mark of outstanding performance in the area of training to its employees ‘State Bank of India’ has been declared as the Winner of ‘Golden Peacock National Training Award’ for the year 2017 in the sector of financial services (Banking).

- National Award 2016: Awarded for Empowerment of Persons with Different Abilities in the sub-category Best Employer-2016 by Government of India, Ministry of Social Justice and Empowerment.

- Helen Keller Award 2016: It was presented by National Centre for Promotion of Employment for Disabled People (NCPEDP) for the second successive year in the category Role Model Company/NGO/Institution for its commitment towards promoting equal employment opportunities for Differently Abled Persons.

ISO Certification:

Your Bank constantly strives to achieve quality standards for its Learning Centres in terms of training resources, infrastructure and academic activities. All the five Apex Training Institutes (ATIs) and 40 SBLCs out of 43 are accredited with certification, of which 13 SBLCs were accredited during FY2017.

2. INFORMATION TECHNOLOGY

State Bank of India is a strong proponent of leveraging information technology to deliver convenience to its customers. Your Bank has been offering innovative and cutting-edge products to its customers with the objective of enabling banking transactions at anytime and from anywhere. Your Bank’s technology strategy has evolved in tune with the current consumer trends of social collaboration, mobility, cloud-based platforms and big data analytics.

Digitisation and excellence in operations has been core to your Bank’s strategy in providing convenience to customers. It has resulted in a reduction in turnaround time and extended benefits to your Bank’s customers.

1. Internet Banking

Internet Banking solutions cater to the various payments, fund-transfers, e-Tendering, e-Auction and bulk payments related requirements of the Government/ PSUs/Large and Medium Corporate as well as for Retail Internet Banking (RINB) customers. The Corporate Internet Banking (CINB) is well suited to Small, Medium and Large Corporate. It has also been immensely successful in establishing traction with Government Treasury & Accounts Departments. Online collection of fees/funds for institutions, corporate and government departments is being facilitated through Multi Option Payment System (MOPS) and State Bank Collect. Merchant-acquisition is facilitated through aggregators.

This cost-effective channel has enabled more than 140 crore transactions during FY2017, achieving 12.9% growth over the previous year. Your Bank’s robust Retail Internet Banking (RINB) platform has also been optimised for visually impaired customers following WCAG (Web Content Accessibility Guidelines).

Internet Banking Users

(No. in lakh)

2013

2014

2015

2016

2017

130

177

220

263

327

During FY2017, your Bank has continued to be a major player in the e-Commerce space in the country. Over 50,027 merchant tie-ups were done, directly or via State Bank Collect/ e-Commerce aggregators. Your Bank has facilitated more than 37 crore e-Commerce transactions up to 31st March 2017.

Some of the new features launched in Net Banking during FY 2017 are as follows:

- Online PAN Updation

- Online OD for e-Commerce purchases (Flip kart)

- INB Infrastructure Transformation and database segregation to meet future growth

- Submission of stock statement through CINB

- Direct integration with 102 merchants/ government departments

- NPS Online account opening

- Personalised Image Based Gift Card Issuance Facility

- IMPS facility for SARAL Users

- Spend Analyser

- Facility to register for receiving account statement by email at periodic intervals

- Online locker enquiry

- Quick transfer for SARAL

- Mobile number registration in CBS through Contact Center

- Delivery of INB password through email to NRI

- Setting up Auto Sweep (transfer to MODs)

- NPS contribution and unfreezing

- Facility to download PPF account statement financial year wise

- Save Now Travel Later - Cox & Kings: Recurring Deposit

- SBI FLEXI RD

- Issuance of ATM PIN Pre Printed Kit through INB Branch Interface

- Direct integration with EPFO for contribution by corporate

2. Analytics

Your Bank is using analytics extensively to maximise operating efficiency. Predictive analytics and customer segmentation are used with the objective of enhancing customer revenues through cross-selling and up-selling. Risk Analytics is used both for appraisal of fresh applications and for ongoing monitoring of the loan portfolio. Analytics is also used to improve ATM, network availability and performance, to fine tune target setting for and performance tracking of the Bank’s employees, and to optimise deployment of capital against revenue opportunities. Analytics-driven, pre-qualified lending programs launched in 2016 have generated significant business, while reducing cost of acquisition. Improved and timely intelligence delivery to branches/ operating functionaries has also resulted in quantifiable growth in customer retention and wallet share.

3. TAB Banking

Digital Inspection Application (DIA)

Tab Apps for recording the pre-sanction and post-sanction inspections of the customers is available for seven products. DIA is integrated with LOS, CBS and HRMS where the customer data is pre-populated and field staff needs to capture the photographs of borrowers, collateral, factory, stock and others with date, time and geo-coordinates. The inspection reports are automatically mailed to the field staff in their EMS mail address. The Application also has auto reminders for upcoming post-sanction inspections, stock and insurance expiry dates.

DIA - Lite Version for Mobiles and Desktop

The Digital Inspection App Lite version for SME and Agri are available for mobile phones. Field officers can capture the photographs with date, time and geo-coordinates using the Mobile App and then continue the data entry for inspection in the desktop site. All features provided in the tab are available in the desktop site.

4. SBI Workspace Business Challenge

In order to prevent unauthorised access to data on mobile device, your Bank decided to set up an Enterprise Mobility Management (EMM) infrastructure to facilitate Bring Your Own Device (BYOD) through SBI Workspace.

This solution provides a cost efficient way of delivering applications on mobile devices, providing data security and flexibility of operations to the end users. It protects mobile devices such as smart phones and tablets used by Bank officials from malicious software, hackers, data leakage, and unauthorised access. It also provides secure and controlled access to Bank’s intranet websites, apps, e-mails and files, among others.

5. Core Banking Development

Project CBS Roopantar was implemented during the year to deliver faster customer service. It offers a unique user experience to your Bank’s over 1,60,000 tellers, thereby achieving an increase in their productivity through data entry reduction, maker checker process enhancements and enables various applications/tools as widgets on the CBS login screen.

6. IT Special Projects

During the year, e-wealth hubs were made operational at New Delhi and Mumbai centres for UHNI/HNI customers offering portfolio management, investment advisory through self service portal and video assist services.

‘Branch Infrastructure Management System (BIMS)’ - A web application has been developed and customised, to enable the Branch Officials and their Controllers to have a comprehensive view of the infrastructure/ physical assets of a branch / office.

7. Social Media

Your Bank’s social media presence was established in November 2013. In a short span of 3.5 years, your Bank’s social media strategy has come a long way. Your Bank has been consistently ranked number one globally among Top 100 Banks using Social Media by The Financial Brand in their list of ‘Power 100 Ranks’. We have adopted an aggressive social media strategy, which has strengthened our foothold in the social space not just in the Indian market but on a global scale as well. Your Bank boasts of having the highest fan-base on Facebook globally, among banks. It also leads the chart on LinkedIn and Pinterest among Indian banks.

SBI’s Facebook Page was launched on 7th November, 2013. Today it is the most popular page amongst all Indian Banks with more than 10 million followers. Your Bank has leveraged this platform to promote its latest products and services and provided responses to the innumerable comments received on this platform.

Keeping in view the young customers of the Bank, your Bank has also launched SBI Mingle - the Social Media Banking Platform which offers a host of banking services on Social Media. Services like account enquiries, cheque book request, SMS alert registration and fund transfer including P2P transfer is available through the platform.

Your Bank’s YouTube channel leads all Indian banks in terms of subscriber base. It uploaded more than 400 videos that have garnered over 40 million views and has over 44,000 subscribers, indicating appreciation by the digital users.

Your Banks has figured in Twitter advertising index for 6 weeks in a row. The Instagram handle also garnered more than 2.3 lakh followers. In the current financial year, your Bank also launched its presence on Quora.

8. Integrated Data Strategy,

Processing and Management (IDSPM)

After persistent efforts, IDSPM has achieved T 1 status (T 5 on month ends) of data. This is best of class in the industry. This has significantly reduced time taken for generation of reports and updating of dashboards.

IDSPM has provided more than 1 00 types of data/reports related to demonetisation at T 0 / daily/weekly/ monthly intervals to various government authorities and top management.

On the Big Data front, in order to cater to the ever-increasing volume and types of data, your Bank is in the process of setting up of a data lake. This will facilitate faster processing of large volume of structured and unstructured data and perform advanced analytics with a view to gain insights for business decision and development of new products.

9. Project Management Office

Your Banks has put in place a Project Management Office which created a seamless process through which business requirements came to IT in a standard and structured manner. Projects are planned in a standard manner considering elements such as Schedule management, RAID, stakeholder management and Interface Management. These customised processes are implemented through a workflow based toolset. All the project managers in GITC are given hands on training. A majority of business users are also given training on these tools. Senior management fully supported the uptake of these capabilities. A comprehensive set of dashboards are designed for business and IT leaders to provide insight into project performance.

10. Customer Relationship

Management Solution

Customer Relationship Management (CRM) as a concept has always been integral to the customer centric vision of your Bank. It has always been a pioneer in implementing new age solutions to enhance the customer experience and increase the moments of customer delight. Your Bank has also been a forerunner in catering to the need of the customers in this digital age.

In the context of the present ‘Always-on-Always-Connected’ day and age, your Bank’s customers demand and deserve a consistent, high quality service experience, across all interaction points - at the branch, online, over the phone or at any of the self-service stations. Customers expect a continuity of context/conversation across interactions that they have had with the bank over time. Towards that end, the Bank is implementing a robust full featured CRM system to deliver efficient and seamless high quality customer experience. The CRM system will leverage the Bank’s Data Warehouse and Analytics capabilities to proactively address customer’s needs and offer the right product/services at the right time. Apart from increased cross-sell and up-sell capabilities, reduced turn-around-time, Customer 3600 view, automated and streamlined processes, improved reporting and effective decision making would be some of the key benefits of the CRM system.

11. ATMs

In a constant endeavour to improve technology to enhance customer satisfaction and convenience, ATM channel during the year made several technology advancements which includes the following:

- ATM Switch Consolidation to handle approximately 90,000 ATM terminals.

- Debit Card Management system (DCMS) to Single DCMS for better performance and prompt dealing with various customer requests related with linking/delinking, blocking and unblocking of the Debit Card.

- Green Pin through channels viz. ATM, INB, IVRS, SMS.

- Disabling ATM receipt printing at customer’s option.

- Quick Cash facility enabling State Bank Customers to withdraw favourite cash in shortest time.

- Ping Module for quick fault identification by segregating connectivity issues from other local issues for quick resolution of the ATMs which are down.

- Tool on Internet with 24*7 monitoring of ATM, which resulted in high availability of ATMs.

- IMT (Instant Money Transfer) facility through which cardholder can send money instantly to any mobile number in India. The receiver can withdraw the money through an ATM without using a debit card.

- Deposit Transaction Limit increased from Rs.49,900 to Rs.2 lakh in all SBI CDM and Cash Point Machines.

- SBI Finder helped in real-time monitoring of ATM/CDM status especially during the demonetisation phase.

12. Payment System Group Prepaid Cards: Your Bank issues Prepaid Cards in both Indian and Foreign Currency. Different variants of INR Prepaid cards such as EzPay cards, Gift cards, Smart Payout cards, Quick Pay Cards, Imprest Cards and Achiever Cards, among others are issued to individual and corporate customers. State Bank Foreign Travel Cards are available in eight foreign currencies namely the Japanese yen, the Canadian dollar, the Australian dollar, the Saudi riyal, the Singapore dollar, the U.S. dollar, the Euro and the British pound to provide safety, security and convenience to overseas travellers. During FY2017, there has been a growth of 100% in INR prepaid cards. In FY 2017, your Bank issued over 32,200 foreign travel cards and 3,68,400 INR prepaid cards.

13. Funds Transfer and Settlement

Your Bank offers Real Time Gross Settlement (‘RTGS’), National Electronic Fund Transfer (‘NEFT’) and National Electronic Clearing Service (‘NECS’) fund transfer facilities for qualifying transactions at its branches as well as through internet banking. In addition, NEFT is offered through your Bank’s mobile banking services. NEFT and RTGS continue to be the most cost effective and time efficient modes for remittance. The volume (number) of outward fund transfers through NEFT during FY 2017 were 229.70 million. Bank has established itself as a leader in NEFT, with a market share of 13.45% as of 31st January, 2017 (as per latest data by RBI). In RTGS, Bank maintained a market share on 10.34% as on 28th February, 2017 (as per latest data by RBI). NEFT fund transfer transactions through your Bank’s mobile banking service have also increased significantly in recent years.

14. Lotus Project

Being the largest and the most trusted bank for over 300 million customers in India, your Bank continues to be a key driver with its bouquet of technology-driven solutions to spearhead banking and financial participation in India.

Your Bank continues to modernise its IT architecture; by optimising and modernising the IT landscape with a view to increase efficiency and improve control.

Technology driven channels through the digital transformation aims to bring about efficiencies in cost/income ratios as well as higher customer satisfaction scores. It also brings apart from a positive change in the working culture of the Bank and sets it at par with the most modern global banks. Your Bank’s capabilities are driven by a cutting edge cognitive infrastructure capable of understanding customer needs accurately and satisfying the same in the preferred manner. In the delivery of the digital transformation, for the first time in its history, your Bank has adopted agile methodology with a design thinking approach, to address the business needs through this initiative. Market recognition of these transformational aspects in technology has been recognised globally resulting in several rewards and accolades by prestigious industry bodies.

15. New Developments in FI&GS (Financial Inclusion & Government Schemes)

- Enabled inter-operable ATM Card based Transactions BC/CSP Outlet.

- Merchant Transactions menu for CSPs through Kiosk Application provided convenience of e-payment for goods/services purchased by customer from CSP outlet.

- Rolled out of SBI Aadhaar Pay Merchant App, facilitating less cash economy.

- OTP based refund facility under IMPS helped easy refund of failed IMPS transactions to the authentic customer.

- BUDDY integration with Kiosk Banking enabled cash deposit and withdrawal from Buddy at Kiosk Channel.

- Deployment of robust Direct Benefit Transfers solution to handle higher volumes and provide T 0 processing with complete accounts and funds reconciliation.

- New Solution for processing State Government subsidies offers DBT services to state level subsidy paying agencies.

List of IT - Awards received during FY 2017

Award

Category 1

IDRBT Banking Technology Excellence Awards for the year 2015-16.

(1) Innovative Use of Technology (in Large Bank category)

(2) Digital Banking (in Large Bank category)

CSI IT Innovation and Excellence Awards 2016

Best Bank in terms of Big Data Analytics implementation

SKOCH Award

EMI for e-Commerce, SBI Mingle

Finnoviti Awards 2017

EMI for e-commerce, Automation of Credit Risk related tranche

IBA Banking Technology Awards 2017

Best Technology Bank of the year,

Best Digital & Channels Technology (Runner-up), Best Use of Analytics (Runner-up),

Best Financial Inclusion Initiatives (Runner-up),

Best Financial Inclusion Initiatives (Runner-up)

Netapp Innovation Award 2017

Innovative Use of Data Storage, Green IT

NPCI - National Payments Excellence Award

Special Recognition Award for winning in all categories

List of Awards received for BEST CIO, FY2017

Award

Category

CIO 100 by IDG Media Pvt. Ltd.

Best CIO

BFSI IT Leadership Award 2016

Best CIO

CSI IT Innovation and Excellence

Best CIO

Awards 2016

Hosted by UBS Transformance

Life Time Achiever Award

3. RISK MANAGEMENT

A. RISK MANAGEMENT OVERVIEW

Risk Management at your Bank includes risk identification, risk assessment, risk measurement and risk mitigation and its main objective is to minimise negative impact on profitability and capital. Your Bank is exposed to various risks that are an inherent part of any banking business. The major risks are credit risk, market risk, liquidity risk and operational risk which includes IT risk.

Your Bank has policies and procedures in place to measure, assess, monitor and manage these risks systematically across all its portfolios. Your Bank is amongst the leaders to undertake implementation of the Advanced Approaches under Credit, Market and Operational risk. Your Bank has also undertaken the Enterprise and Group Risk Management Projects, which aim to adopt global best practices. The projects are being implemented with support from external consultants.

RBI Guidelines on Basel III Capital Regulations have been implemented and your Bank is adequately capitalised as per the current requirements under Basel III. An independent Risk Governance Structure, in line with international best practices, has been put in place, in the context of separation of duties and ensuring independence of Risk Measurement, Monitoring and Control functions. This framework visualises empowerment of Business Units at the operating level, with technology being the key driver, enabling identification and management of risk at the place of origination.The various risks across Bank and the SBI Group are monitored and reviewed through the Executive level committees and the Risk Management Committee of the Board (RMCB) which meets regularly. Risk Management Committees at Operational unit and Business unit level are also in place.

1. CREDIT RISK

Credit Risk is defined as the possibility of losses associated with the diminution in the credit quality of borrowers or counter-parties from outright default or from reduction in portfolio value. Credit Risk emanates from a bank’s dealings with an individual, non-corporate, corporate, Bank, financial institution or sovereign.

Mitigation Measures Your bank has put in strong credit appraisal and risk management frameworks in place for identification, measurement, monitoring and control of the risks in credit exposures. Industrial environment is scanned, researched and analysed in a structured manner by a dedicated team for deciding your Bank’s outlook and growth appetite for each of the identified 37 industries/sectors, which constitute about 70% of the Bank’s total domestic exposure. Risks in these sectors are monitored continuously and wherever warranted, the industries concerned are reviewed immediately. Impact of events like BREXIT, demonetisation, telecom tariff war, falling prices of power and the upheaval in commodity prices to name a few, were analysed and appropriate responses to these situations were strategised by your Bank to mitigate possible risks. Exposure to sensitive sectors like Real Estate are reviewed at regular intervals. Sectors like Power, Telecom, Iron & Steel, Textiles, which are going through a challenging phase, are watched continuously and analysis of new developments are shared with the business groups to enable them to make informed credit decisions. Knowledge sharing sessions are conducted for the benefit of the Top Executives and for the operating staff.

Credit rating thresholds for each industry are decided on the basis of the outlook.

Your Bank uses various internal Credit Risk Assessment Models and scorecards for assessing borrower wise credit risk. Models for internal credit ratings of the borrowers have been developed in-house. They are reviewed through cycles of comprehensive validation and back testing frameworks.

Your Bank has adopted an IT platform for credit appraisal processes through a Loan Originating Software/Loan Lifecycle Management system (LOS/LLMS). Models developed by the Bank are hosted on these platform which are interfaced with CIBIL and RBI defaulters lists.

In order to focus on capital conservation and maximisation of return on capital, your Bank has introduced Risk Based Budgeting (RBB). Reduction in risk and return on capital is measured based on Return on Credit Risk Capital (RoCrC). Achievement of the budgeted advances level are subject to scrutiny under the specified levers. Risk Adjusted Return on Capital (RAROC) framework has been implemented from FY2016. The Customer level RAROC calculation has also been digitised. Further behavioural models for monitoring and scoring the retail borrower performance have been developed and hosted on Credit Risk Data Mart.

Your Bank has put improved mechanism in place to manage Credit Concentration Risk, by way of introduction of risk sensitive Internal Prudential Exposure Limits framework for single as well as group borrowers. These limits are fixed on the basis of the internal risk rating of the borrower. This framework is one step ahead of the regulatory prescription of Prudential Exposure norms, which is ‘one size fits all’ in nature. These exposure norms are monitored regularly at a defined periodicity.

Your Bank conducts Stress Tests every halfyear on its Credit portfolio. Stress Scenarios are regularly updated in line with RBI guidelines, industry best practices and changes in macro economic variables.

RBI has allowed your Bank to participate in the parallel run process for Foundation Internal Ratings Based (FIRB) under the Advanced Approaches for Credit Risk. The data under parallel run of FIRB is being submitted to RBI. Models for estimation of Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD) are hosted in Credit Risk Data mart for computation of IRB capital. Independent Risk Advisory (IRA) is a new initiative launched by your Bank in its efforts to strengthen Credit Risk Management. Medium and High value credit proposals are examined by the Independent Risk Advisory department.

2. MARKET RISK

Market Risk is the possibility of loss that Bank may suffer on account of change in value of its trading portfolio, on account of market variables such as exchange rate, interest rate and equity price, among others.

Mitigation Measures

Your Bank’s market risk management consists of identification and measurement of risks, control measures, monitoring and reporting systems.

Market risks are controlled through various risk limits, such as Net Overnight Open Position, Modified Duration, PV01, Stop Loss, Upper Management Action Trigger, Lower Management Action Trigger, Concentration and Exposure Limits.

Your Bank has Asset class wise risk limits for its trading portfolio and monitors the same on an ongoing basis.

Currently, market risk capital is computed under the Standardized Measurement Method (SMM). Your Bank has submitted Letter of Intent to the Reserve Bank of India for migration to Internal Models Approach (IMA) under the Advanced Approaches for market risk.

Value at Risk (VaR) is a tool used for monitoring risk in your Bank’s trading portfolio. Enterprise level VaR of the bank is calculated on a daily basis and also back tested daily. The Stressed VaR for market risk is also computed on a daily basis. The VaR methodology is supplemented by conducting quarterly stress tests of the trading portfolio.

3. OPERATIONAL RISK

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

Mitigation Measures

Key elements of your Bank’s Operational Risk Management Policy, among others, include ongoing review of systems and controls, creation of awareness of operational risk throughout the Bank, timely incident reporting, enhancing operational risk awareness through Risk & Control Self- Assessment (RCSA) process, improving early warning information through implementation of Key Indicators (KIs) (comprising of Key Risk Indicators (KRIs), Key Control Indicators (KCIs) and Key Process Indicators (KPI)), the resolution of risk issues by effectively tracking and follow-up of outcomes of assessment, assigning risk ownership, aligning risk management activities with business strategy. All these policies ensure better capital management and improve quality of Bank’s services/ products/processes, besides ensuring compliance with regulatory requirements.

RBI has granted In-Principle approval to your Bank (on a solo basis) to migrate to AMA (Advanced Measurement Approach) for computation of operational risk capital charge on Parallel Run basis.

For FY 2017, Bank on a stand-alone basis, had assigned capital for Operational Risk as per Basic Indicator Approach (BIA). Capital charge as per AMA has also been calculated as part of Parallel Run.

Your Bank celebrated Risk Awareness Day on 1st September. Risk culture is being embedded through training staff at all levels through e-learning lessons.

4. ENTERPRISE RISK

Enterprise Risk Management aims to put in place a comprehensive framework to manage various risks and alignment of Risk with Strategy at the whole Bank level. It encompasses global best practices such as Risk Appetite, Material Risk Assessment and Risk Aggregation, among others.

Mitigation Measures

As part of your Bank’s vision to transform the role of Risk into a Strategic function, a Board approved Enterprise Risk Management (ERM) Policy is place.

Your Bank is currently implementing Material Risk Assessment by identifying risks material to the organisation, measuring the levels of risks and aggregating the same to provide an enterprise level risk profile.

Your Bank conducts a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) exercise on a yearly basis with respect to adequacy of Capital under normal and stressed conditions. The Pillar 2 risks, such as Liquidity Risk, Interest Rate Risk in Banking Book (IRRBB), Concentration Risk and others along with the Pillar 1 risks such as Credit, Market and Operational risks are covered inder ICAAP.

5. GROUP RISK

Group Risk Management aims to put in place standardised risk management processes in Group entities.

Mitigation Measures Policies relating to Group Risk Management, Group Liquidity and Contingency Funding Plan (CFP), Arms Length and Intra Group Transactions and Exposures are in place.

Monitoring of consolidated Prudential Exposures and Group Risk components is also being done regularly. A quarterly analysis of risk-based parameters for Credit Risk, Market Risk, Operational Risk and Liquidity Risk, among others, is presented to the Enterprise & Group Risk Management Committee (EGRMC)/Risk Management Committee of the Board (RMCB).

The Group Internal Capital Adequacy Assessment Process (Group ICAAP) document includes an assessment of identified risks by Group entities, internal controls and mitigation measures, and capital assessment, under normal and stressed conditions. All Group entities where SBI has 20% or more stake and management control , including Nonbanking entities, carry out the ICAAP exercise and a Group ICAAP Policy is in place to ensure uniformity.

6. BASEL IMPLEMENTATION

Your Bank has been identified as D-SIB by the Regulator and has to keep additional Common Equity Tier 1 (CET1) 0.60% of RWAs applicable from April 1, 2016 in a phased manner and it will become fully effective from April 1, 2019. Your Bank has also started maintaining CCB in a phased manner and will reach 2.5% by March 2019. Your Bank is fully equipped to comply with all regulatory norms with reasonable cushion over the minimum regulatory capital requirement.

B. INTERNAL CONTROLS

Your Banks’ internal audit function independently evaluates the adherence to internal processes and procedures. The internal audit function also undertakes a comprehensive risk based audit of all operating units of your Bank in line with regulatory guidelines relating to Risk Based Supervision. Keeping pace with the rapid digitization, your Bank has initiated technology driven intervention in conducting various audits and moving towards automation in your Bank’s audit processes. Some key initiatives include the following:

- Web based Concurrent Audit System covering the higher band of business exposures prescribed by the regulators

- Offsite Transaction Monitoring System(OTMS) to monitor exceptions observed in transactions

- Web based Early Review Mechanism to ensure early review of quality of loans of Rs.50 lakh and above

- Web based RFIA (Risk Focused Internal Audit) which is flexible, scalable and expandable with enhanced level of automation

- Loan product based modules in RFIA for audit of loans under different schemes / products

- Online self-audit by branches, for self assessment by branches and vetting by controllers.

- Audit findings are made available on MIS dash board on T 1 basis, ensuring monitoring of compliance by Management.

Your Bank has in-built internal control systems with well-defined responsibilities at each level. It conducts internal audit through its Inspection & Management Audit (I&MA) Department. Audit Committee of the Board (ACB) exercises supervision and control over the functioning of I&MA Department.

Your Bank carries out mainly two streams of audits - Risk Focused Internal Audit (RFIA) and Management Audit, covering different facets of Internal Audit requirement. Your Bank’s accounting units are subjected to RFIA. The Bank’s Management Audit covers administrative offices and examines policies and procedures, besides quality of execution thereof.

Besides, the I&MA department conducts Credit Audit, Information Systems Audit (Centralised IT establishments & Branches), Home Office Audit (audit of foreign offices), Concurrent Audit, FEMA Audit, Audit of Outsourced Activities of the Bank and Expenditure Audit. Also, to verify the level of rectification of irregularities by the branches, Compliance Audit is conducted at select branches.

Risk Focused Internal Audit (RFIA)

I&MA Department undertakes a critical review of the entire operations of audited units through RFIA, an adjunct to Risk Based Supervision, as per RBI directives. The domestic branches have been broadly segregated into three groups (Group I, II and III), on the basis of business profile and risk exposures. During FY 2017, I&MA has audited 10,349 domestic branches/BPR entities under RFIA.

FEMA Audit

FEMA Audit which was being done as part of RFIA, has been made a separate audit and is conducted by the officials who are well versed with Foreign Exchange business and FEMA/ RBI guidelines. During FY2017, 575 auditee units were covered, under FEMA Audit.

Management Audit

Management Audit encompasses Corporate Centre establishments/Circle Local Head Offices/Apex Training Institutions, Associate Banks and Regional Rural Banks (RRB) sponsored by the Bank. During FY2017, 35 establishments/administrative offices were audited under Management Audit.

Credit Audit

Credit Audit aims at achieving continuous improvement in the quality of Commercial Credit portfolio of the Bank, through critically examining individual large commercial loans with exposures of Rs.10 crore and above annually. High Risk Accounts with exposure of Rs.100 crore and above are reviewed at half-yearly intervals. The Credit Audit System also provides feedback to the Business Units, by way of warning signals, about the quality of advance portfolio in the unit and suggests remedial measures.

Loan Review Machanism (LRM)

Audit in high value credit areahas an off-site review machanism (Loan Review Mechanism) of all the pre-sanction and sanction process of individual advances Rs.5 crore and above, within 3-6 months of sanction/enhancement/ renewal. LRM has been integrated with LLMS for online review, submission of ATR and monitoring by controllers.

Early Sanction Review (ESR)

Early Sanction Review (ESR) was introduced to review sanctions of more than Rs.50 lakh up to Rs.5 crore, to capture the critical risks in the proposals sanctioned at an early stage and apprise the controllers of such risks, for mitigation thereof.

Information System Audit (IS Audit)

All Branches are subjected to Information System (IS) Audit to assess the IT related risks, as part of RFIA of the branch. IS Audit of centralised IT establishments is carried out by a team of qualified officials/outside experts. During the FY2017, IS Audits of 32 centralised IT establishments were conducted.

Foreign Offices Audit - Home Office Audit

During the year FY2017, Home Office Audit was carried out at 51 branches, Management Audit at four Representative offices, one Country Head Office and one Subsidiary / Joint Venture.

Concurrent Audit System Concurrent Audit system is essentially a control process, integral to the establishment of sound internal accounting functions and effective controls. Concurrent Audit covers your Bank’s Advances and other risk exposures as prescribed by the regulatory authority. Concurrent Audit System has been revamped by introducing a web-based solution and made more efficient.

Off-site Transaction Monitoring System (OTMS)

Off-Site Transaction Monitoring System (OTMS), a web based solution, was introduced, to further strengthen the transaction audit, to capture the deviations without much loss of time and take corrective actions, through continuous offsite monitoring. Exception data is being generated by Data Warehouse (DW), based on certain business rules and monitored continuously. At Present, 27 types of exceptions are being monitored and flagged to the branches for verification by them. The exceptions are periodically reviewed and enlarged, depending upon the need and certain triggers.

Legal Audit

Legal Audit was rolled out in all the Business Verticals in 2014, to cover all loan and Mortgage related documents of high value loans of Rs.5 crore and above. As on 31st March 2017, Legal Audit has been completed in 9,170 accounts.

Audit of Outsourced Activities

A full fledged Department has been set up under GM (CAU), to oversee the Audit of Outsourced Activities of your Bank.

C. COMPLIANCE RISK MANAGEMENT

Your Bank has been ascribing highest level of importance to Compliance risk management and has taken number of initiatives to strengthen compliance function keeping in view the scale and complexities of business operations. Some key initiatives are:

- All new products, process, policies are vetted from the regulatory perspective before they are approved and operationalised. The review of the existing policies/process/products are also subjected to Compliance vetting. This will help your Bank in improving the level of compliance;

- A Compliance Risk Management Committee (Comp RMC) has been constituted comprising of Senior Executives from Business Verticals and Support functions, to oversee all compliance related issues. The committee meets regularly and extends necessary guidance to the all concerned in smooth implementation of Risk Based Supervision (RBS). The committee has further formed Review and Validation Groups, comprising senior officials, to oversee quality and consistency of information / data points as per the prescribed process framework, and ensure timely submission under RBS Information System;

- Compliance Testing of RBI’s regulations and guidelines is regularly carried out to assure that the control mechanisms are in place, and adequate to comply with regulatory guidelines. Feedbacks are also given to various stakeholders to improve control mechanisms and also to design new ones wherever warranted.

D. AML-CFT MEASURES:

- Your Bank has a dedicated AML/CFT department for effective Transaction monitoring with a view to prevent misuse of banking channels. To address emerging complexities in AML/CFT space, your Bank in the process of upgrading its software in tune with that prevalent in major global banks;

- A number of initiatives has been undertaken to bring greater awareness amongst Bank staff about KYC and AML/CFT compliances. For creating awareness of KYC Compliance amongst all staff, e-lessons have been made mandatory for all Staff members. Online quiz is being conducted across your Bank to actively involve the Staff. AML-CFT Day is being observed on 2nd November every year. Pledge has been taken on that day at all branches / processing centres and Administrative Offices. Similarly 1st August is observed as KYC Compliance and Fraud Prevention day.

4. OFFICIAL LANGUAGE

Your bank made concerted efforts to promote Official Language Hindi and other Indian languages in the Bank. The key highlights are given below :

Learning of Regional Languages through Hindi

The Government of India expects that staff of the banks should have knowledge of local language so that they can connect with the customers in their language and provide them better customer service. In order to meet this expectation, Official Language Departments at Circles brought out following publications to make their staff conversant with local language through Hindi medium:

- Aaiyey Assamia Seekhein

- Aaiyey Seekhein Hindi se Odia

- Hindi-Punjabi Samvad-Sahayika

- Hindi bhasha ke madhyam se Kannad Seekhein - Kannada Kali

- Aaiyey Malyalam Seekhein

Observance of World Hindi Day

World Hindi Day was observed on 10th January 2017 in all the foreign offices of your Bank with the objective of creating favourable environment for the progressive use of Hindi and to motivate and encourage staff members to do their work in Hindi as required in Annual Programme. To mark the occasion, different competitions and activities were held on this day. A list of some of the competitions and activities conducted are given below:

- Hindi Crossword competition

- Hindi General Knowledge Quiz competition

- Competition on creating advertisements and slogans in Hindi

- Audio-visual display of popular Hindi stories and related questions-answers session

- Staging of popular dramas

- Singing of Hindi songs competition

- Hindi book reading competition

- Panel discussion on promotion and propagation of Hindi language abroad

All India Online Hindi Quiz Competition

An all India Online Hindi Quiz Competition for the staff of your Bank was conducted during the months of August and September. Over 13,000 staff members participated in the competition. This competition was organised on the newly developed website of OL Dept. During this period, number of hits made on it crossed 1,20,000 mark.

Rajbhasha Fortnight observed in all the 3 linguistic regions

During the year Rajbhasha Fortnight was celebrated in your Bank in all the three regions i.e. ‘A’, ‘B’ and ‘C A video message of Honorable Chairman Smt. Arundhati Bhattacharya was recorded on the eve of Hindi Day - 14th September 2016 and was broadcasted for to all the staff members.

Felicitation of Shri Prasoon Joshi

State Bank of India felicitates eminent personalities who have given valuable contribution to enrich Hindi language and literature. The Chairman of your Bank Smt. Arundhati Bhattacharya felicitated renowned Hindi writer, poet, lyricist and Ad Guru Shri Prasoon Joshi during FY2017.

Shields to circles for excellence in use of Hindi

Corporate Centre awarded shields and certificates to circles in linguistic region ‘A’, ‘B’ and ‘C’ East and South for excellence in implementation of Official Language Policy. During the year, New Delhi, Ahmedabad, Kolkata and Hyderabad circle bagged first place and Lucknow, Mumbai, Bhubaneswar and Bengaluru circle lifted the runners up shield respectively.

Inspection by Committee of Parliament on OL

The Committee of Parliament on Official Language inspected your Bank’s Corporate Centre, Sansad Bhavan branch and RBO, Udaipur during the year. Your Bank has been entrusted with the coordination work during the inspection/tour programme of the Committee. Your Bank efficiently coordinated with the Committee members and also ensured effective implementation of the recommendations. An appreciation letter from the Convener of the Committee addressing your Bank’s Honorable Chairman was received for excellence in arrangements made during the inspection.

A training programme for Rajbhasha Officers and officers associated with the work of implementation of Official Language Policy at LHOs and AOs in linguistic region ‘A’ & ’B’ was organised at SBLC, Panchkula on 18th June 2016 and for Region ‘C’ at SLC, SBT, Ernakulam on 18th March 2017. Topics like compilation of questionnaire for the Committee and related preparations/arrangements were covered during the training programme.

A bilingual Compendium of Important Guidelines for Top Executives for inspection of Committee of Parliament on Official Language was brought out during the year and uploaded on Rajbhasha Department Website on State Bank Times.

‘Prayas’ got Rajbhasha Kirti Award from the Honorable President of India

‘Prayas’ the quarterly Hindi house journal of your Bank got Rajbhasha Kirti Award from the Honorable President of India.

Bank’s Chairman felicitated with

‘Rajbhasha Ratna’ Award

Your Bank’s Chairman Smt. Arundhati Bhatacharya was conferred with Rajbhasha Ratna Award for the year 2016 by the renowned literary-social-cultural organisation ‘Aashirwad’.

TOLICs under Bank’s leadership got shields for best performance

Town level Official Language Implementation Committees were formulated under your Bank’s leadership got prizes for best performance. These shields were conferred by Honorable Governors of respective states. Your Bank’s Hindi in house journal ‘Prayas’ was also adjudged among best magazines by the Reserve Bank of India.

5. MARKETING AND COMMUNICATION

The Banking sector has, since the past three years witnessed radical disruptions led by fintech companies, and as a result, conventional Banks have had to modify / augment their business strategies, especially in the area of technology based customer value propositions. Besides, even conventional products have been put to test by way of smart and increased marketing initiatives by leading public and private sector banks.

With this intent your Bank’s management appointed a Chief Marketing Officer (CMO) in March 2016. The CMO heads the Marketing & Communications (M&C) department which has been set up at the Corporate Centre of your Bank. With the setting up of this department, the erstwhile Corporate Communications & Change department was subsumed into this department. The M&C department is responsible for your Bank’s initiatives for all brand and product marketing, public relations and corporate social responsibility. With the objective of optimising its efforts in promoting your Bank’s products and services adopting contemporary marketing approach and to give impetus to the bank’s digital initiatives to connect with the youth, the M&C department’s key responsibilities include developing and implementing integrated marketing strategies to address business challenges of different divisions of your Bank including Indian and overseas operations of the Bank.This department comprises of domain skilled professionals/ specialists drawn from various relevant fields -media, marketing communications, advertising and public relations.

The department has started work on all business groups and other functions of your Bank. Some key successful initiatives rolled out by the department during FY 2017 include the Hope Loans Campaign - a novel concept to support NGOs working in different areas of social work whilst promoting the Bank’s asset products viz Home, Auto and Personal Loans. Through this initiative, your Bank could give away Rs.3.88 crore to 5 NGOs working in the area of education, health/ shelter, clean energy and mobility solutions. Besides this, another major campaign was rolled out to address the opportunity on the back of demonetisation scenario the country witnessed in the 3rd quarter. The campaign titled #cashkiaadatbadlo has been received reasonably well, the success of which is evidenced in highest ever number of transactions of debit cards, downloads of e-wallet State Bank Buddy and SBI Pay, the UPI digital payments solution. Towards the end of March, the M&C department also developed the advertising campaign for the merger of SBI’s associate banks with your Bank. Besides these campaigns, it has been overwhelming for the Bank to receive positive feedback, especially from customers and staff about the fresh approach to its advertising execution. Going forward, besides working on other marketing initiatives, especially in the area of digital marketing, your Bank hopes to leverage the might of State Bank Group to strengthen its marketing thrust to stay relevant and competitive given the evolving and dynamic financial services industry landscape.

6. VIGILANCE MECHANISM

At your Bank, there are three aspects to the vigilance function - Preventive, Punitive and Participative. During this year, Vigilance Awareness Week was observed from 31st October 2016 to 5th November 2016, with the theme ‘Public participation in promoting integrity and eradicating corruption’. As a part of observance of Vigilance Awareness Week, ‘Integrity Pledge’ has been administered to staff and the public at large. Further, SBI as a Corporate has also undertaken the Integrity Pledge. To create awareness, Gram Sabhas have been organized and Integrity Pledge has been administered at these Sabhas also.

The concept of Whistleblower is another effective tool for Preventive Vigilance. To highlight any malpractices, under Whistle Blower Scheme, a portal has been launched by the Bank. Whistle Blower can lodge a complaint online and also monitor the progress made in this regard. There is already a well-defined Whistle Blower policy in your Bank, which acts as a deterrent for the employees to keep themselves away from malicious activities. We keep the secrecy of the whistleblower and give protection to them so that they continue to be an effective tool against wrongdoings without fear.

Branches, where certain lapses of grave nature are observed, are identified and Suo-motu investigations are conducted so that possible fraudulent activities could be checked and remedial measures are undertaken.

During FY2017, a total of 1163 cases (753 new cases) were taken up for examination, out of which 805 cases have since been concluded.

7. ASSET AND LIABILITY MANAGEMENT (ALM)

- Asset and Liability Management occupies the centre stage in the overall management of financial institutions. ALM practices require specialised knowledge and skill to efficiently handle dynamic and evolving challenges in the financial sector.

- Your Bank has effective ALM Management team in place with requisite skills to manage the Balance Sheet. While the ALM Management of your Bank is guided by Regulatory guidelines, your Bank is in the forefront in developing effective management models in the domain of ALM by bringing in the best global practices.

- The Asset Liability Management Committee (ALCO) of your Bank oversees the Interest Rate and Liquidity Risks, reviews the components of balance sheet and sets up benchmarks for efficient management of these risks. ALCO, inter alia, reviews the Interest Rate scenarios, pattern of growth of liability products, credit growth and liquidity management and approves appropriate pricing of Bank’s products. In terms of regulatory requirements, your Bank has moved to Marginal Cost of Funds based Lending Rates (MCLR) with effect from 1st April 2016.

- Studies are conducted to gauge the behavioural pattern of assets and liabilities, which do not have any definite contractual maturity, to assist the ALM teams. These behavioural studies encompass the embedded options available to customers, off-balance sheet exposures, impact of probable loan losses etc.

- Your Bank has put in place appropriate policies for conducting ‘Asset & Liability Management’, ‘Stress Testing’ the Balance Sheet components. In line with the regulatory requirements, the Liquidity Risk Management approach is built on the premise of ensuring optimal liquidity position and avoiding concentration of funding. As part of contingency planning for liquidity, appropriate ‘Contingency Funding Plan’ is in place.

- The guidelines of Basel Committee on Banking Supervision (BCBS) on Liquidity Risk to promote Short term resilience by maintaining mandated Liquidity Coverage Ratio (LCR) is strictly followed by the Bank. The levels of High Quality Liquid Assets (HQLA) are effectively monitored in a highly dynamic environment.

- Advanced approach of assessing the impact on Earnings at Risk (EaR) and Market Value of Equity (MVE) determines the likely erosion of Net Interest Income (NII) under the Interest Risk Management. Permissible limits are pre-defined and continuously monitored. Proactive steps are initiated whenever warranted.

- In line with the regulatory requirements, your Bank has evolved Internal Capital Adequacy Assessment Process (ICAAP) with robust methodology, responses and an effective framework in place.

ALM Department of your Bank, being the support group to ALCO is equipped with robust systems and processes and conducts the above functions in a professional way.

8. ETHICS & BUSINESS CONDUCT

Your Bank has ceaselessly been showing its unflinching commitment with the highest professional and ethical standards regardless of its growing size, scope and reach. It has also been providing visionary thought leadership to Indian Banking over the years. In spite of the large staff complement, vast network of branches and spread in all the time zones, our Vision, Mission and Values form the fabric that holds us together wherever we are and whatever we do.

Upholding the same ethos of more than 200 years, the Bank has taken one more seminal initiative by envisaging and creating the position of the Chief Ethics Officer in the Bank who will establish and oversee an independent Ethics and Business Conduct Function in the organisation. Idea is to anchor, promote, nurture and institutionalise a positive ethical culture in the organisation leading to enhanced brand equity and market reputation. The position of Chief Ethics Officer has been constituted for the first time in any Indian public sector organisation.

9. CORPORATE SOCIAL RESPONSIBILITY

Social Responsibility is deeply ingrained in the culture of your Bank. The Bank has been undertaking social welfare initiatives much before the formal CSR concept became common practice or an industry norm. Your Bank believes that it owes a solemn duty to the less fortunate and underprivileged members of the society to make sustainable social change in their lives. Your Bank has always placed the interest of the common man, especially the most marginalised, at its core. SBI has always been a caring and enabling organisation and sustainable business practices is at the heart of our business operations. Your Bank has been setting aside 1% of its net profit for CSR initiatives and its CSR initiatives have made a true difference in the lives of millions from underserved communities. Your Bank is committed to the economic and social wellbeing of the socially and economically impoverished.

Focus areas of SBI’s CSR activities

- Healthcare

- Education

- Skill Development and Livelihood Creation

- Environment Protection.

CSR spend during 2016-17

The CSR contribution of your Bank for FY 2017 was Rs.109.82 crore. The Bank’s local head offices (Circles) spent Rs.89.82 crore and the remaining Rs.20 crore was donated to SBI Foundation.

This is the fifth successive year, when your Bank’s CSR spend has crossed the milestone of Rs.1000 million. The sector wise spend is as mentioned hereunder:

Supporting Healthcare

More than 66% of India’s population still lives in rural area and has no or very limited access to medical care. Lack of proper healthcare infrastructure and high vulnerability of children are major concerns in rural India. Unaffordability, unavailability and lack of awareness are the major reasons behind low health care index in India.

The primary focus has always remained to provide the basic infrastructure to ameliorate the conditions of the common man. To deliver quality healthcare to those belonging to underprivileged and economically weaker sections of the society, your Bank has supported large number of hospitals. The major initiatives of the Bank in health care sector are as under:

Medical Vans: Your Bank donated Rs.6.87 crore to over 49 charitable organisations for acquiring ambulances and medical Vans.

Health Equipments and Surgeries: Your Bank donated Rs.7.52 crore to 23 charitable organisations/hospitals for acquiring various medical/surgical equipments like Stress Test Machine, Dialysis Machine, Eye Equipment, X-Ray Machine, ICU facility and New Born care unit. This has improved the capacity and potential of the hospitals to serve the deprived patients.

Old Age Homes and Mobility Solutions: Your Bank donated Rs.1.50 crore for supporting old age homes and providing relief to Divyangjan (PwDs).

Community Outreach Programmes: Your Bank organised camps to focus on curative and preventive healthcare for the under privileged rural population. The areas covered are given below:

- Eye Check-up

- Cancer detection

- Reproductive healthcare check-up

- Basic health check-up (Blood Pressure, HB etc.)

- Diabetes check up

Reputed local NGOs played a pivotal role in organising these camps.

Supporting Education

Education is the backbone of a country’s social and economic development. Several areas of the country lack basic schooling facilities, especially rural areas. Lack of infrastructure, transportation facilities and basic amenities are the key hindrances for education in rural India. Your Bank always strives to support education for economically weaker social groups in remote, unreachable and underdeveloped areas. The key contributions in the education sector are mentioned below:

Holistic Support: Your Bank contributed Rs.1.35 crore towards supporting infrastructure across several schools located in rural/remote areas.

Computers and Peripherals: Your Bank contributed Rs.1.15 crore towards setting up of computer labs/IT labs. Many NGOs were also supported for acquiring computers, soft boards and setting up digital classrooms.

Schools Buses/Vehicles: Your Bank donated Rs.3.99 crore for acquiring 35 school buses/vehicles to help schools in rural areas to provide transportation facility to underprivileged children.

Support to Persons with Disabilities (PwDs):

An amount of Rs.1.57 crore was donated to reputed NGOs for the following activities:

- Distribution of artificial limbs, callipers, crutches and wheel chairs among others

- Distribution of other aids and devices

- Community Based Rehabilitation project for mentally/physically challenged persons

- Braille Embosser System

- Special Vehicles for disabled

Environment and Sustainability

Your Bank is committed to environment protection and contributes positively to reduce the carbon footprint. Responsible interaction with environment to avoid depletion and degeneration of natural resources and maintain long term quality of the environment is a priority for your Bank. Your Bank has contributed Rs.3.57 crore in the following areas for:

- Acquiring solar power plant, solar lamp, solar water heater, solar street lamps.

- Purchase, commissioning and maintenance of a number of solar power plants.

Skill Development initiatives and Livelihood Creation

Rural Self Development Training

Institutes (RSETIs)

India is one of the youngest nations in the world with over 54% of its population below 25years of age. Employability of the growing young demography is one of the important factors in the economic development of the country. Your Bank has set up 116 Rural Self Employment Training Institutes (RSETIs) across the country as institution to help mitigate the unemployment and underemployment problem among youth in the country.

Your Bank has contributed Rs.12.84 crore for construction of 10 RSETI buildings and other infrastructure support. The Recurring expenditure for Skill development programs for youth was Rs.34.73 crore across 116 RSETIs of the Bank .

SBI Youth for India Fellowship program

SBI Youth for India is a Fellowship program initiated, funded and managed by your Bank in partnership with reputed NGOs. It entails the urban educated youth to voluntarily get involved in various developmental projects in rural areas. Under this initiative, your Bank partnered with seven reputed NGOs, and engaged in development work in rural areas to deploy the youth enrolling for the fellowship. The fourth batch of 61 fellows are working at 32 locations across nine states. They are working on various projects to understand the need of rural community and address them with innovative solutions. Most of these projects fall within the scope of Sustainable Development Goals (SDGs) which include No Poverty, Good Health and Well-Being, Quality Education, Affordable and Clean Energy, Reduce Inequality/Life on Land and Climate Action, among others.

SBI Children’s Welfare Fund

Your Bank constituted the SBI Children’s welfare Fund as a Trust in 1983. It extends grants to educational institutions engaged in the welfare of underprivileged children such as orphans, physically challenged and destitute. The corpus of the fund is made by staff members and matching contribution is provided by your Bank. During FY2017, your Bank donated Rs.71 lakh to various educational institutes.

Awards and accolades:

Your Bank won the prestigious Golden Peacock Award for Sustainability.

V. ASSOCIATES AND SUBSIDIARIES

INTRODUCTION AND PERFORMANCE HIGHLIGHTS

As a part of mission to provide the entire gamut of financial services across India, the State Bank Group, through its various subsidiaries, provides a whole range of financial services, including Life Insurance, Merchant Banking, Trustee Business, Mutual Funds, Credit Card, Factoring, Security Trading, Pension Fund Management, Custodial Services, General Insurance (Non Life Insurance) and Primary Dealership in the Money Market.

ASSOCIATE BANKS

The five Associate Banks of SBI had a Market share of around 5.02% in deposits and 4.41% in advances as on 31st March 2017. Associate Banks together had 6,847 branches and 9,075 number of ATMs.

The performance highlights of the Associate Banks as on 31st March 2017 (Rs. in crore)

S.

No

Name of the Bank

SBI Share of Ownership

Total Assets

Agg. Deposits

Total Advances

Op. Profit

Net Profit

CD Ratio

CAR %

Gross NPAs%

Net NPA %

Investment

%

1

State Bank of Bikaner & Jaipur

676.12

75.07

1,16,293

1,03,662

68,774

1,942.14

-1,368.33

66.34

9.25

15.52

10.53

2

State Bank of Hyderabad

367.55

100.00

1,63,190

1,42,955

87,715

2,909.86

-2,760.26

61.36

11.73

20.76

12.84

3

State Bank of Mysore

628.63

90.00

88,996

77,769

38,608

913.58

-2,006.26

49.64

12.41

25.68

16.90

4

State Bank of Patiala

4,859.10

100.00

1,22,829

1,00,507

77,100

1,454.83

-3,579.46

76.71

12.43

23.15

15.48

5

State Bank of Travancore

885.11

79.09

1,25,917

1,14,323

52,506

1,503.32

-2,152.46

45.93

12.19

16.79

10.22

State Bank of Bikaner and Jaipur

Awards and Accolades

Some of the awards and accolades received by the Bank during the current year are mentioned below:

- Awarded the ‘Rajbhasa Kirti Prize’ by Hon’ble President of India for best performance in Rajbhasa Niti during FY 2016.

- Best Performance Award (3rd prize amongst all PSBs) conferred by PFRDA for implementation of Atal Pension Yojna Phase-II.

- SME Excellence award 2016 in category of Micro Lending by ASSOCHAM.

- Second best performing public sector Bank for FY2016 by State Forum of Bankers Club, Kerala.

State Bank of Hyderabad (SBH)

Awards and Accolades

- Received Second Prize in Region ‘C’ under ‘Rajbhasha Kirti Puraskar’ from the Government of India, Ministry of Home Affairs, Dept of Official Language, New Delhi.

- Awarded by ‘Dun & Bradstreet’ as ‘India’s Top Bank’s & Banking Awards 2016’ for completing 75 years of operation.

- Awarded ‘IDRBT Banking Technology Excellence Award’ by Sri Raghuram Rajan, Ex-Governor of RBI.

State Bank of Mysore

Awards and Accolades

- Awarded with Eco-Technology Savvy Bank Award- Winner(Emerging Category)by CIMSME for the year 2016-17.

- MIPSED, Tumakuru, RSETI sponsored by State Bank of Mysore is awarded with ‘AA’Grading (the highest grading) for 2015-16 by MoRD. GOI.

State Bank Of Travancore

Awards and Accolades

- Skoch Award for segment leadership in MSME received on 8th June 2016.

- Skoch Award for Social Inclusion received on 8th June 2016.

- Skoch Order of merit to SBT RSETI’s for qualifying in SBT Rural Development Trust.

- National Award for Excellence in Lending to Micro Enterprises from Government of India, Ministry of Micro Small and Medium Enterprises (Special Award - amongst the Associates of SBI).

- SMEs Excellence Award 2016 - Best MSME Bank from Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Non- Banking Subsidiaries

(Rs. crore)

Sr. No

Name of the Subsidiary Company

Ownership (SBI interest)

% of Ownership

Net Profit (Losses) for FY 2017

1

SBI Capital Markets Ltd. (Consolidated)

58.03

100.00

251.80

2

SBI DFHI Ltd.

139.15

*63.78

176.44

3

SBI Mutual Fund Trustee Company Pvt Ltd.

0.10

100.00

2.42

4

SBI Global Factors Ltd.

137.79

86.18

1.01

5

SBI Pension Funds Pvt. Ltd.

18.00

*60.00

1.03

*Group holding of SBI is 100% in SBI Pension Funds Pvt. Ltd. (SBI 60%, SBI MF and SBI Capital 20% each) and in SBI DFHI State Bank holding is 72.17% (SBI 63.78%, ABs 5.27% and SBI Capital 3.12%).

Non- Banking Subsidiaries: Joint Ventures

(Rs. crore)

Sr.

No

Name of the Subsidiary Company

Ownership (SBI interest)

% of Ownership

Net Profit (Losses) for FY 2017

1

SBI Funds Management Pvt. Ltd.

31.50

63

224.32

2

SBI Cards & Payment Services Pvt. Ltd.

471.00

60

390.41

3

SBI Life Insurance Company Ltd.

701.00

70.10

955

4

SBI-SG Global Securities Services Pvt. Ltd.

52.00

65

11.74

5

SBI General Insurance Company Ltd.

159.47

74

153

6

GE Capital Business Process Mgt. Services Pvt. Ltd.

9.44

40

47

A. SBI CAPITAL MARKETS LIMITED (SBICAP)

SBICAPs is India’s leading investment banker, offering entire bouquet of investment banking and corporate advisory services to varied client base across three product groups - Infrastructure, Equity Capital Markets and Debt Capital Markets. These services include Project Advisory, Loan Syndication, Structured Debt Placement, Mergers & Acquisitions, Private Equity, Restructuring Advisory, Stressed Assets Resolution, IPO, FPO, Rights Issues, Debt and Hybrid Capital raising.

On a standalone basis, SBICAPs posted a PBT of Rs.312.57 crore during FY2017 as against Rs.425.29 crore during the FY2016 and a PAT of Rs.217.95 crore for FY2017 against Rs.283.39 crore in FY2016.

SBICAPS declared dividend at 200% during FY 2017 as against 320% in FY 2016.

1. SBICAP SECURITIES LIMITED (SSL)

SSL, a wholly owned subsidiary of SBI Capital Markets Limited, besides offering equity broking services to retail and institutional clients both in cash as well as in Futures and Options segments, is also engaged in sales and distribution of other financial products like Mutual Funds, Tax Free Bonds, Home Loan, Auto Loan, Tractor Loan, among others.

SSL has over 100 branches and offers Demat, e-broking, e-IPO and e-MF services to both retail and institutional clients. SSL currently has more than 12 lakh clients. The Company has booked gross revenue of Rs.250.35 crore during FY2017 as against Rs.160.82 crore in FY2016.

2. SBICAP VENTURES LIMITED (SVL)

SVL is a wholly owned subsidiary of SBI Capital Markets Limited. DFID (Department for International Development) has joined hands with the SBI group to set up the “Neev Fund” which is being managed by SBICAP Ventures Limited. SVL is acting as the Asset Management Company.

The Neev Fund had its Initial close on 10th April, 2015 and current corpus of the Fund is Rs.469.39 crore. Fund will be invested in Infrastructure sectors such as renewable energy, water and sanitation, agricultural supply chain in 8 identified states of India (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and West Bengal). SVL has started earning Management Fees.

3. SBICAP (UK) LIMITED (SUL)

SUL is a wholly owned subsidiary of SBI Capital Markets Limited. SUL is positioning itself as a relationship outfit for SBI Capital Markets Limited in UK and Europe. Relationships are being built with FIIs, Financial Institutions, Law Firms, Accounting Firms, etc. to market the business products of SBICAP.

4. SBICAP (SINGAPORE) LIMITED (SSGL)

SSGL, is a wholly owned subsidiary of SBI Capital Markets Limited. SSGL commenced business from December 2012. Relationships are being built with FIIs, Financial Institutions, Law Firms, Accounting Firms, etc. to market the business products of SBICAP. It has been specialising in marketing of Foreign Currency Bonds and securing clients for SBICAP SEC.

5. SBICAP TRUSTEE CO. LIMITED (STCL)

SBICAP Trustee Co Limited (STCL), is a wholly owned subsidiary of SBI Capital Markets Limited. STCL commenced security trustee business with effect from 1st August, 2008. STCL posted Net Profit of Rs.11.68 crore during FY2017 as against Rs.13.35 crore during FY2016. STCL successfully launched an Online Will Creation service for the individuals in the name of ‘My Will Service Online’. It also launched its ‘Trustee Enterprise Management System’ - an integrated system to address all the trustee related operations and thus has become the first and only Trustee Company in India to have full automation across all trustee related operations.

B. SBI DFHI LIMITED (SBI DFHI)

SBI DFHI Limited is one of the largest standalone Primary Dealers (PD) with a pan India presence. As a Primary Dealer (PD) it is mandated to support the book building process in primary auctions and provide depth and liquidity to secondary markets in G-Sec. Besides Government securities, it also deals in money market instruments, non G-Sec debt instruments, etc. As a PD, its business activities are regulated by RBI.

SBI group holds 72.17% share in the Company. The Company posted Net Profit of Rs.176.44 crore in the FY 2017 as against Rs.72.19 crore in the FY2016. Total balance sheet assets was Rs.3,187.70 crore as on 31st March 2017 as against Rs.5,836.20 crore as on 31st March 2016.

The market share of SBI DFHI was 2.97% amongst all market participants and 19.13% amongst Standalone PDs as on 31st March 2017.

C. SBI CARDS & PAYMENTS SERVICES PRIVATE LIMITED (SBICPSL)

SBICPSL is a stand-alone credit card issuing company in India. It is a joint venture between State Bank of India and GE Capital Corporation, wherein SBI holds 60% stake.

During the year ended 31st March 2017, SBI Card delivered a strong business performance. The Company’s Card base has grown by 26% Y-o-Y with total number of credit cards reaching to a level of Rs.45.69 lakh. Similarly, Company achieved card spends of Rs.43,436 crore with Y-o-Y growth rate of 51%. The Company has registered Profit after Tax of Rs.390 crore at a growth rate of 38% as compared to the previous year.

In terms of industry rankings SBI Card became 2nd both in Cards & Spends category during the current financial year.

- On Card base, it has moved from 3rd position to 2nd position with market share of 15%.

- On spends, it has moved from 4th position to 2nd position with market share of 13%.

The Company has launched five new products during the year to strengthen the bouquet of product offerings to cardholders:

- SBI Elite Card (Product refresh of erstwhile SBI Signature Card)

- SBI Unnati Card

- Co-branded Cards like Central SBI Select & Select Cards

- Co-branded banking cards such as SBI South Indian Bank Card and SBI Karnataka Bank Card

SBI Cards received the following awards during the current year:

- SBI Card bagged five awards at the 25th World HRD Congress in partnership with TIMES Ascent (Times of India group):

- CEO with HR Orientation

- Most Influential HR Leader in India

- Best workplace practices

- Award for Managing health at work

- Best advance in employee engagement

- Adjudged as the 14th best ‘Dream Company to work for, selected amongst the top 75 companies across the country

- Readers’ Digest Most Trusted Brand Award 2016

- ’Best Credit Card Program’ for SimplyCLICK at the MasterCard Innovation Awards 2016.

- The Compliance Register Platinum Awards: Runners up in two categories Best Compliance Team - Regulated Firms and Best Head of Compliance.

- Bronze Award for ‘Achievement in Audio Visual Film’ for SBI SimplySAVE Card at WOW Awards Asia 2016.

- At the Global Compliance Register Platinum Award Ceremony in London, SBI Card won the award for ‘Compliance Excellence’ and also bagged the Runner Up award in ‘Best Head of Regulatory Compliance’ category.

- Awarded ‘Excellent Compliance Performer-2016’ across Indian industries at the Annual Compliance 10/10 awards.

- SBI Card also won ‘Compliance Team of the Year-Overseas’ award at GRCI Annual Awards 2016 across Australia.

- Legal team has been awarded the ‘Best In-House Legal Team of the Year (Mid-Size)’ at the Indian Legal Awards organized by Legal Era Magazine.

- Awarded for Best Loyalty Program in Financial Sector: Non-Banking, during The Customer FEST Show at the 10th edition of Loyalty Summit.

- SBI Card team has been awarded “Best Data Quality” in NBFC Category for second time in the row at the recently concluded CIBIL conference awards.

D. SBI LIFE INSURANCE COMPANY LIMITED (SBILIFE)

SBI Life Insurance is a joint venture between State Bank of India (SBI) and BNP Paribas Cardif. SBI owns 70.1% of the total capital and BNP Paribas Cardif holds 26%, while Value Line Pte. Ltd. (an affiliate of KKR Asian Fund II L.P.) and MacRitchie Investments Pte. Ltd. (an indirect wholly owned subsidiary of Temasek Holdings Pvt. Ltd.) hold 1.95% each. SBI Life has a unique multi-distribution model encompassing vibrant Bancassurance, Retail Agency, Institutional Alliances and Corporate Solutions distribution channels.

The Company has proven its market leadership again in FY 2017 with a growth rate higher than the growth of the industry. The company witnessed a 43% growth in New Business Premium (NBP) vis-a-vis the private industry growth of 24%. The market share of SBI Life New Business Premium (NBP) among all private players as on March 31, 2017 is 20.0% vis-a-vis 17.3% last year. The Company has been ranked No. 1 in New Business Premium among the private industry. Further, the Company has achieved 38.9% growth in Individual Adjusted Premium Equivalent (APE) vis-a-vis 26.4% growth for private industry.

SBI Life witnessed a PAT of Rs.955 crore in FY 2017 against Rs.861 crore in FY 2016. Assets held as on 31st March 2017 recorded a Y-o-Y growth of 23% at Rs.102,240 crore.

Leveraging wider reach achieved through its network of 801 offices, SBI Life has systematically brought large rural areas under insurance. The Company has sold 24% of total policies in this segment in FY 2017. A total of 589,932 lives covered by the company are from the underprivileged social sector.

The Company’s primary commitment is to its customers and during the year, the Company has improved its Death Claim Settlement Ratio to 98% and further reduced complaints related to mis-selling to 0.20% of the policies sold, which is the best in the industry. The Company’s focus in the coming times will be on further enhancing its distribution efficiency, lowering operational cost, introducing innovative products and continue to be customer centric.

The various awards received are a testimony to SBI Life’s quality and commitment towards customer centricity and professional excellence. Awards and recognitions received during the year include:

1. ’Life Insurance Company of the Year’ and ‘Bancassurance Leader Life Insurance (Large Category)’ at the Indian Insurance Awards 2016 organised by Fintelekt.

2. Won LIMRA and LOMA Silver Bowl Award 2016 under “Best use of Social Media from a Company Operating outside of the U.S.’’ category.

3. Won in ‘CLO Chief Learning Officer Summit India - 2016’ in the following categories:

a) Induction Training Program

b) Mobile Learning Program

4. One of the ‘Most Trusted Brand, 2016’ for the Sixth consecutive year by The Economic Times Brand Equity - Nielsen survey

5. iCMG Global Awards for

a) IT Service Management -Architecture Excellence

b) Top 30 Global CIO Award

6. Plaque award for commended Annual Report from Institute of Chartered Accountants of India (ICAI) for Excellence in Financial Reporting for FY 2016

Adjudged the runner up of the ‘Outlook Money Awards 2016’ in the Life Insurance category.

E. SBI FUNDS MANAGEMENT PRIVATE LIMITED (SBIFMPL)

SBIFMPL, the Asset Management Company of SBI Mutual Fund, is the 5th largest Fund House in terms of Average “Assets Under Management’ and a leading player in the market with over 5.8 million investors. SBIFMPL posted a PAT of Rs.224.32 crore in FY2017 as against Rs.165.36 crore earned during FY2016. The average “Assets Under Management’ (AUM) of the Company during the quarter ended March 2017 were Rs.1,57,025 crore with a market share of 8.58% as against the average assets under management of Rs.1,06,781 crore with a market share of 7.89% during the quarter ended March, 2016. The Company has a fully owned foreign subsidiary namely SBI Funds Management (International) Private Limited, which is based at Mauritius and manages Offshore Fund.

F. SBI GLOBAL FACTORS LIMITED (SBIGFL)

SBIGFL is a leading provider of factoring services for domestic and international trade. SBI holds 86.18% share in the Company. The Company’s services are especially suitable for MSME clients for freeing up resources locked in book debts. By virtue of its membership of Factors Chain International (FCI), the Company is able to ameliorate credit risk from export receivables under the 2 factor model.

The Company sustained its profitability during FY2017 also, and has reported a PBT of Rs.3.25 crore (PY - PBT Rs.2.53 crore) & PAT of Rs.1.01 crore (PY - PAT Rs.0.86 crore). Turnover for FY2017 is Rs.3,047 crore as compared to turnover of Rs.2,532 crore in previous year (i.e. an increase of 20%). FIU as on 31st March 2017 is Rs.1,059 crore as compared to Rs.1,008 crs as on 31st March 2016. Turnover in EF under 2 Factor Model for FY2017 is equivalent to EUR 41.91 Mio (PY EUR 32.80 mio). In INR terms, the EF turnover touched Rs.306.58 crore for FY2017, as against Rs.237.52 crore in previous year.

The Company is adequately capitalized with AAA / A1 ratings from reputed rating agencies for its borrowing programmes.

G. SBI PENSION FUNDS PRIVATE LIMITED (SBIPFPL)

SBIPFPL has been appointed as Pension Fund Manager along with 6 others to manage the pension corpus under NPS. SBIPFPL is one of the three Pension Fund Managers (PFM) appointed by Pension Fund Regulatory & Development Authority (PFRDA) for management of Pension Funds under the National Pension System (NPS) for Central Government (except Armed Forces) and State Government employees. SBIPFPL, a wholly owned subsidiary of the State Bank Group, commenced its operations from April 2008. The total “Assets Under Management’ of the company as on 31st March 2017 was Rs.66,723 crore (YoY growth of 45%) against Rs.46,019 crore in March 2016.

The Company maintained lead position amongst Pension Fund Managers in terms of AUM in both Government and Private Sectors. The overall AUM market share in Private sector was 62%, while in the Government sector it was 35%.

The Company has a full-fledged dealing room adequately managed by experienced Bond and Equity markets specialists.

The Company was adjudged the “Best Pension Fund Manager’ under Pension Fund Manager category for the year 2016 by Outlook Money for the 2nd consecutive year.

H. SBI GENERAL INSURANCE COMPANY LIMITED (SBIGIC)

SBIGIC is a joint venture between State Bank of India and IAG Australia in which SBI holds 74% stake. The Company’s strong focus is on disciplined pricing and fair and transparent claims management practices. The cornerstone of the Company’s growth aspiration is focussed on the Banca channel whilst developing other channels and products that meet business objectives and drive profitable growth. The Company has entered in to strategic tie-ups with three large car manufactures to drive growth in the Motor portfolio.

Gross Written Premium (GWP) stood at Rs.2,607 crore for FY2017. In the seven years of operation, for the first time in FY2017 SBIG has achieved profit, to the tune of Rs.153 crore. The Company recorded 27.7% growth in GWP Y-o-Y against an industry growth of 32.4% including crop whereas excluding Crop SBIGIC recorded growth of 18.6% against Industry growth of 17.5% for FY2017. SBIGIC has grown by 194% in Crop Insurance for FY2017 by participating in the PMFBY schemes and extending our geographies. The Overall market share among all general insurance companies stands at 2.04% and 4.9% among private insurers. The Company’s market ranking is 14th in the industry and 8th among the private players in YTD December 2016. SBIGIC occupies 2nd position in “Personal Accident” among private insurers & 3rd position in the industry FY2017. The company ranks 2nd in “Fire” among private insurers and 6th position in the industry in FY2017. Share of health business increased from 11% to 14.3%, for SBIG this has translated to a growth of 73% Y-o-Y against Industry growth of 23.8%. Health Insurance ranking improved from 17th to 13th at an overall industry level. IAG has given their intention for dial-up to increase their stake to 49%.

SBI General won at the India Insurance Awards 2016 in the ”Under-served Market Penetration” and in the ”Commercial Lines Growth Leadership; and SBI General was adjudged as a ”Best ET BFSI Awards 2016” by Economic Times. The company has been certified as a “Great Place to Work” in FY2017.

I. SBI SG GLOBAL SECURITIES SERVICES PRIVATE LIMITED (SBI SGGSSPL)

SBISG, a joint venture between State Bank of India and Societe Generale with 65 % holding by SBI, was set up to offer high quality custody and fund administration services to complete the bouquet of financial services offered by the SBI Group. SBISG commenced commercial operations in 2010. The Company’s Net Profit was Rs.11.74 crore in FY 2017 as against Rs.8.66 crore in FY 2016. Accumulated profit is Rs.20 crore.

Average Assets Under Custody in March 2017 rose to Rs.3,27,158 crore from Rs.2,10,370 crore as in March 2016, while the Average Assets Under Administration were at Rs.1,83,779 crore in March 2017 as against Rs.1,31,254 crore in March 2016.

SBISG was rated as the best sub custodian by Global Finance Magazine in 2015.

J. SBI FOUNDATION

During FY2017, SBI Foundation (the company promoted by your Bank, under Section 8 of Indian Companies Act) has undertaken CSR projects in almost all the focus areas outlined in CSR Rules ofCompanies Act. During the year, the Foundation approved 26 projects worth Rs.24.71 crore and disbursed an amount of Rs.9.89 crore. The projects have disbursement schedule running into the current year FY2018 also. Major projects undertaken by SBI Foundation are as under:

1. Healthcare:

- Lifeline Express (Mobile hospital on train)

- Eye Care (Cataract surgeries)

- SBI- Anugraha (Home based hospice and palliative care)

- Cancer Cure

- Shravan Shakti (Cochlear Implant surgeries)

- Care for Senior Citizens

- Jeevan Daan (Organ donation)

- Sanjeevani - Clinic on Wheels

- Mauli Seva (Care for mentally ill and destitute women)

- Health checkup for female inmates of Byculla Jail (Mumbai)

2. Education:

- Beti Padhao Kendras (Girl Child Education in five states)

- Bodhshala (Community Schools)

- Digital Class (In four states)

- Khelwadi (Play School for underprivileged children)

- Disha (Career guidance and counseling)

- Virtual Eye (Computer education for visually impaired)

3. Environment:

- Protect Himalayas (Plantation of trees)

- Harith Kalingdwar (Plantation of trees)

4. Rural Development :

- Draught Proofing of Villages

5. Women Empowerment & Gender Equality:

- Samriddhi-Action for Adolescent Girls (UNFPA Project)

6. Promoting inclusive workplace and environment:

- Centre of Excellence for PwDs

7. Sanitation:

- Swachch Belur Math (Construction of toilet block of 203 units)

8. Poverty and Hunger:

- Supporting Mid-Day Meals (Akshaya Patra)

9. Skill Development

- Kaushal Vikas (paramedical and allied health training)

K. SBI INFRA MANAGEMENT SOLUTIONS PVT. LTD.

Bank’s wholly owned subsidiary “SBI Infra Management Solutions Pvt. Ltd” have been incorporated on 17th June, 2016 to look after the following works related to real estate of SBI:

(i) Transaction Management/ Advisory Services:

Buying, selling or leasing of premises, renewal of leases etc. and providing advisory services on existing and upcoming business centres, identification of strategic locations.

(ii) Project Management:

Planning, execution & monitoring of construction of new building, interior and furnishing of all SBI premises, landscaping etc. and also major changes/repair projects.

(iii) Facility Management:

Repair and Management Services to create a safe, pleasant, efficient and productive environment for the Bank officials and their customers.

VI. RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that they have selected such accounting policies and applied them consistently and made judgements and estimates as are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Bank as on the 31st March 2017, and of the profit and loss of Your Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949 and State Bank of India Act, 1955 for safeguarding the assets of your Bank and preventing and detecting frauds and other irregularities;

iv. that they have prepared the annual accounts on a going concern basis;

v. that the internal financial controls had been laid down, to be followed by your Bank and that such internal financial controls are adequate and were operating effectively; and

vi. that proper system had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

VII. ACKNOWLEDGEMENT

1. During the year, Shri Tribhuwan Nath Chaturvedi retired from the Board w.e.f 28th August 2016, consequent upon completion of his term. Shri V.G. Kannan, Managing Director-A&S retired on attaining superannuation on 31st July 2016. Dr. Urjit R. Patel, retired from the Board w. e. f. 27th September 2016 consequent upon his appointment as RBI Governor and Shri Chandan Sinha, was nominated as RBI Nominee Director in his place w. e. f. 28th September 2016. Shri Sunil Mehta resigned from the Board w. e. f. 15th March 2017, consequent upon his appointment as Non-Executive Chairman of Punjab National Bank.

2. Shri Dinesh K. Khara was appointed as Managing Director under section 19(b) w. e. f 9th August 2016 on the Board.

3. The Directors place on record their appreciation for the contributions made by the respective outgoing Directors namely, Shri Sunil Mehta, Shri Tribhuwan Nath Chaturvedi, Dr. Urjit R. Patel and Shri V.G.Kannan to the deliberations of the Board.. The Directors welcomed the new Directors Shri Chandan Sinha and Shri Dinesh K. Khara on the Board.

4. The Directors also expressed their gratitude for the guidance and co-operation received from the Government of India, RBI, SEBI, IRDA and other government and regulatory agencies.

5. The Directors also thank all the valued clients, shareholders, banks and financial institutions, stock exchanges, rating agencies and other stakeholders for their patronage and support, and take this opportunity to express their appreciation for the dedicated and committed team of employees of the Bank.

For and on behalf of the

Central Board of Directors

Chairman

Date: 19th May, 2017

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