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Financial Performance and Customers Services of State Bank of India After Merging, Ajmer District: a Study

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Financial Performance and Customers Services of State Bank of India After Merging, Ajmer District: a Study International Journal of Innovations & Research Analysis (IJIRA) 15 ISSN : XXXX-XXXX, Volume 01, No. 01, October - December, 2020, pp 15-22 FINANCIAL PERFORMANCE AND CUSTOMERS SERVICES OF STATE BANK OF INDIA AFTER MERGING, AJMER DISTRICT: A STUDY Dr. Sunil Kumar Goyal ABSTRACT Banking sector is playing a vital role in Indian economy and economic growth. It is also known as the indicator of the economy. Banks provide credit to the different sectors like: agriculture, small scale business, trade and industries etc. As we know State bank of India is a biggest bank of India and first commercial bank. SBI with its associate banks contributed towards Indian Economy. Merger is important technique to take the benefits of largest bank, it reduces operation cost also. The merging process of SBI was started in 2008 but in 2017, SBI was merged with its 5 associate banks. The paper focuses on the performance of state bank of India before and after merging. This paper also presents the satisfaction level of customer regarding services provided by SBI. The purpose of this paper is to study about the merger effects on SBI ___________________________________________________________________________________ Keywords: State Bank of India, Banking Sectors, Economic Growth, Performance of SBI, SBI Services. ___________________________________________________________________________________ Introduction Banking sector is playing an important role in Indian economy and economic growth. It is also known as the indicator of the economy. Banks provide financial facilities to agriculture sectors, industrial sectors, trade and business etc. Banking sector in India stated from 18th century with the establishment of Bank of Hindustan in 1770. There were number of public sector banks established by British East India Company for the trade relationship between Indian and other countries. For the regulation of banking system, Reserve Bank of India was established on April, 1935. After independence, many changes have taken place in Indian Banking sectors. At the time of independence the banking system was not developed. In 1949 two steps were taken for banking sectors reforms. The first steps was Banking regulation Act, which provided rights to RBI to control over the commercial banks and the second steps was the nationalization of RBI. Reserve Bank of India is a regulatory bank of Indian banking system. It regulates and controls all the banks in India. The banking system includes commercial banks, regional rural banks, co-operative banks and small finance banks etc. Commercial banks mobilize savings into industrial and commercial sectors and fulfill capital requirements. Commercial banks cover 92 percent of the entire banking business in India. After independence the commercial banks were provided their services in urban area but for the development of economy there were need a bank who provide serviced in rural areas also. So All India Credit survey Committee recommended the creation of a state-partnered bank by taking over the Imperial Bank of India. Then the state bank of India was established in July 1955. Every country’s growth is depend on the sound financial system and the last three decades witnessed the strength in India’s financial markets. In Indian banking system reforms were started after 1991 by the recommendation of Narasimhan committee. This committee suggested restructuring banks through mergers. The merger is most important tool to achieve the growth. This Committee also recommended reviewing the progress of reforms in the banking sector. These reforms enhanced the efficiency and profitability of banks. Banking Ombudsman scheme was introduced in Jan, 2006. Through these schemes, the consumer can submit complaints online. Indian banks had given new responsibilities for social and economic development by various function. Assistant Professor, SPC Government College, Ajmer, Rajasthan, India. 16 International Journal of Innovations & Research Analysis (IJIRA) - October - December, 2020 About SBI State bank of India is playing an important role in commercial banking system. SBI is the largest bank of India with 23% market share in assets. It was established in 1806 as bank of Calcutta then bank of Bombay and Bank of Madras were merged together and Imperial bank was formed. In 1955 the Imperial bank was converted into State Bank of India. It is the first commercial bank of India. It is a multinational, public sector banking and financial services organization which is constitute under Indian constitute. It has a aim to provide easy financial solution and fulfil the financial requirement of consumers. It is a government-owned corporation and it has its headquarters in Mumbai, Maharashtra. SBI is providing some services like digital banking, online shopping, travel planning, taxi booking, online education and e-commerce companies facilities. SBI also provides different loan to their customers like home loan, education loan, auto loan, personal loan, agri financing and financial solution to SME and MSMEs. Small and medium enterprises are an important segment for SBI because these sectors are contributing in Indian economy by manufacturing output, exports and employment. This bank provide not only financial services but also services of life insurance, general insurance, merchant banking and mutual fund. From few years SBI was facing some problems like misutilisation and poor recovery of loans, identification of beneficiaries, ignorance of customers, lack of sufficient security by the borrowers, lack of proper monitoring, lack or training, promote new technology, systematic improvement for better human resources. Due to these problems the bank had started the merging process. The merger process is providing the benefit of large banks. The aim of this merger is to make the State bank group a stronger and more resilient organization. The merging process of SBI with its subsidiary banks has been started in 2008. In Sept 2008, State bank of Saurashtra merged in SBI. In 2009 State bank of Indore was merged and Bhartiya Mahila Bank was formed. After that Union Cabinet approved merger of SBI with its associate banks on 15th June, 2016. All the associate banks as State bank of Mysore, State bank of Punjab, State bank of Hyderabad, State bank of Bikaner and Jaipur, State bank of Patiala, State bank of Travancore and Bharatiya Mahila bank merged with SBI with effect from April 1st 2017. The SBI has provided various services through various channels like digital, mobile, internet, social media. Bank has set up over 2,200 e-corners across the country where customers can avail different services through ATMs, SWAYAMs, Check deposit Kiosk and online banking Kiosk. SBI has conducted a mass communication program for the all employees to improve the customer centric services in the bank. Today’s banking system is innovative banking system and based on information technology. Information technology has given opportunity to get better customers services. In recent days banking facilities become very easier with the smart phones. People are very friendly with digital services. Objectives of the Study To discuss the financial performance of State bank of India after merging. To discuss the financial performance of State bank of India before merging. To discuss the customer satisfaction regarding services provided by State Bank of India. To know about the merger effect on SBI. Review of Literature Farman Ali and Anshulsharma (2019) paper title “Pre-Merger and Post Merger Operating Performance of SBI”, presented financial performance affected after merger also evaluated all financial parameters before and after merger. V Mahesh Yadav (2019) in his paper title “A Study on financial position of SBI after merger”, Presented financial performance of SBI before and after merger also examined the reasons of merger and challenges faced by SBI during merger. Ritesh Patel (2018) in his paper title, “Pre and Post Merger Financial Performance- An Indian Perspective” explained the before and after merger position of Indian banks, also focused on long term profitability. In this study he also presented negative impact of merger on return on equity, return on assets, net profit ratio and yield on investment but positive impact on Earning Per Share, Profit per Employees and Business per Employees. Hari Mohan (2018) in his paper title, “Impact of Merger on SBI” presented the introduction of banking industry, introduction of SBI and its associate banks, reasons behind the merger of SBI and its associate banks. He also focused the pros and cons of mega merging of SBI. Dr. Sunil Kumar Goyal: Financial Performance and Customers Services of State Bank of India..... 17 D.Sreemathi and Dr. A. Tharmalingam (2018) in their paper title, “A Study on Financial Position of SBI After Merger of Associate Bank” explained the pre and post merger position of the bank also analyzed Cash Deposit Ratio, Credit Deposit Ratio, Credit Investment Deposit Ratio, Interest income to Assets Ratio, Return on Equity Ratio.CMA Jai Bansal and Dr. Gurudatt Kakkar (2018) in their paper title, ”A Research on the Analysis of Merger of SBI with its Associate Banks and Bhartiya Mahila Bank” presented introduction of merger and acquisition, reasons of merger and performance in term of profitability. Neha Chadha (2017) in her paper title, “ An Analytical Study of Reforms and their Impact on Indian Banking Sector” focused on evaluation of banking in India, changing structure of Indian banking sector since Independence,
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