The SBI (State Bank of India) celebrates its 70th Foundation Day on 1st July 2025. It has 25% market share in assets and 25% share in total loans and deposits market in the total Indian banking sector. Thus far, SBI acquired or merged 25 banks. With the proposed 500 new branches in year 2025, the number increases to 23,000. SBI has 63,000 ATMs (Automatic Teller Machines), and 80,000 banking correspondents. It has 50 crores plus customers, which is one-third of India’s total banking excluding multiple accounts.

The present SBI’s total business of Rs. 95.2 trillion may cross Rs. 100 trillion during FY 2025-26. Its total assets are Rs. 66.76 trillion, operating profit Rs. 1.10 trillion, and net profit Rs. 0.71 trillion. Its gross non-performing assets (NPAs) are 1.82% and net NPAs are 0.47%. Against government’s cumulative total infusions to SBI of Rs. 60,000 crores, SBI paid cumulatively more than Rs. 1 lakh crores as dividend to the Government.

The current value of Government’s shareholding in SBI is about Rs. 3 lakh crores. Besides financial returns, SBI has been facilitating banking operations of RBI and Government including implementing of several schemes. SBI is the first bank to find place in Fortune Global 500 and Forbes Global 2000 lists. SBI, along with HDFC Bank and ICICI Bank, is listed as Domestic Systemically Important bank. SBI had 257,252 employees in year 2019 but due to retirements the count has come down to 232,296 by year 2024. However, SBI announced plan to add 10,000 employees during year 2025. The attrition rate in SBI is 3% while that in private sector banks is 25%.  

In the past 70 years, SBI faced several challenges. Initially, SBI faced huge resistance from its staff against computerization. Until year 2010, SBI lagged in technology but has later emerged as the leader in technology front with innovative and successful technology-based products. In year 1971, a cheater claimed as Principal Secretary to Prime Minister and telephoned asking Rs. 60 lakhs for giving to Bangladesh.

The Chief Cashier of the parliament street branch relied on telephone call and released the amount. In year 2015, SBI had complaints of unreported losses, and it had to clean up balance sheet in the next 2 years. SBI faced challenge in modernizing technology infrastructure due to operational complexities and increased costs. Although such bizarre incidents are history, SBI faces pressure on net interest margins due to the lower interest rate regime.

In general, all the commercial banks are facing headwinds due to increased competition, advent of payment banks, UPI payment trend, and overall decline in current and savings account (CASA) balances. Specifically, SBI’s revenue is expected to decline annually up to 3% in the next 3 years. In year 2025, SBI stock has underperformed relative to few public sector banks and private sector banks. While the brand value of SBI is higher at $8.2 billion implying that SBI can withstand competition and turbulences, SBI must focus on improvement areas.

They include profitability and cost management, digital transformation, risk management and asset quality, and sustaining its high market share in various aspects in the Indian banking sector. Mr Challa Srinivasulu Setty who became Chairman of SBI in August 2024 is guiding the Bank to increase focus on customer centric approach, strengthening of digital banking, risk management, asset resolution, and widening capital base. The efforts started shwing results.

(Dr. Kishore Nuthalapati is an Economist and a Corporate Finance Professional. He is serving as the CFO of BEKEM Infra Projects Pvt Ltd, Hyderabad, India.)