State Bank of India's Bid to Consolidate in the Face of Intensifying Competition | Business Strategy Case Studies

Details

Case Code : CLBS094
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 04 Pages
Price : Rs. 100

To download this case click on the button below, and select the case from the list of available cases:

» Business Strategy
Short Case Studies
» Business Strategy Case Studies**
» Case Studies Collection
» ICMR Courseware
» View Detailed Pricing Info

Key words:

State Bank of India, SBI, merger, banking, associate bank, ICICI Bank, foreign banks, bank union, consolidation, private sector bank, public sector bank, risk management, employee rationalization, strike action, market leader, competition

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

Abstract:

State Bank of India (SBI) was in the process of merging all its associate banks with itself to extend its lead over the second largest commercial bank in India, ICICI Bank, and to gear up to meet the threat of intensified competition from foreign banks post-2009. However, SBI consolidation move had run into rough weather with bank unions and officers associations as well as some politicians opposing the move.

Introduction

In August 2007, the board of India's largest commercial bank, State Bank of India (SBI), and that of one of its seven associate banks, State Bank of Saurashtra (SBS), approved the merger of SBS with the parent bank.

As per its long-term plan, SBI aimed to merge all its seven associates with itself by March 2009. With this consolidation move, the market leader in the Indian banking sector sought to widen the gap between itself and the second largest bank in the country, ICICI Bank, and also to gear itself up to face the post-2009 banking scenario which expected to see intense competition from foreign banks. Though SBI was the clear market leader in India, the new age private sector banks that had appeared in the Indian banking arena after the reforms in the banking sector were introduced in the early 1990s, were rapidly gaining on it...

State Bank of India's Bid to Consolidate in the Face of Intensifying Competition*