State Bank of India: Competitive Strategies of a Market Leader

To overcome the intense competition from private and foreign banks, SBI planned a major organizational restructuring exercise. The key aspects involved redesigning of branches, providing alternate channels; focus on a lean structure and technological upgradation. A business process reengineering (BPR) team was constituted in June 2003 with McKinsey & Company as consultants. The BPR's basic goal was to create an operating architecture that would facilitate service delivery of international standards. The project objectives were defined as "increasing customer satisfaction and convenience, freeing up time for branch manager and branch staff to focus on sales and marketing, simplifying process for employees, enhancing SBI's competitiveness in the market, increasing the profitability through higher market share and improved process efficiency..."

This facility would be available at 593 branches, and remote login at 269 branches. The bank's trade finance solution, called EXIMBILLS, was intended to handle trade finance transactions efficiently and enhance the range of services provided to corporates and network branches. In March 2004, SBI announced that it would introduce 'anywhere banking' facility for its customers from over 9000 branches across India in the next two years. All branches in Mumbai would provide this facility by December 2004. SBI also launched different customized loan programs to cater to various sections of society depending on income levels and repayment capabilities. Interest rates and repayment periods were tailor-made to suit the customer groups...