1. Share capital:
a) During the year, the Bank has allotted 3,60,45,243 shares of Rs10/-
each for cash at a premium of Rs2,181.69 per equity share aggregating to
Rs7,900.00 crores under Preferential Allotment to GOI. Out of the total
subscription of Rs7,900.00 crores received from GOI, an amount of Rs36.05
crores was transferred to Share Capital Account and Rs7,863.95 crores to
Share Premium Account.
b) The Bank has allotted 604 equity shares of Rs10/- each for cash at a
premium of Rs1,580/- per equity share aggregating to Rs9,60,360/- out of
shares kept in abeyance under Right Issue - 2008. Out of the total
subscription of Rs9,60,360/- received, Rs6,040/- was transferred to Share
Capital Account and Rs9,54,320/- to Share Premium Account.
c) The Bank has kept in abeyance the allotment of 83,511 (Previous Year
84,115) Equity Shares of Rs10/- each issued as a part of Rights issue,
since they are subject to title disputes or are subjudice.
d) Expenses in relation to the issue of shares : Rs8.79 crores debited
to Share Premium Account.
a. Investments exclude securities utilised under Liquidity Adjustment
Facility (LAF) with RBI Rs40,000 crores. (Previous Year Rs27,000 crores)
b. Investments amounting to Rs5,520.21 Crores are kept as margin with
Clearing Corporation of India Limited/NSCCL/ MCX/ USEIL towards
Securities Settlement. In the previous year investments amounting to
Rs11,117 Crores were kept as margin with RBI/Clearing Corporation of
India Limited towards Real Time Gross Settlement / Securities
c. In terms of RBI Circular DBOD.No.BP.BC.28/21.04.157/2011-12 dated
August 11,2011 the Bank had reversed Rs93.94 crores and Rs39.00 crores
from the Profit & Loss A/c to "Suspense A/c - Crystallised Receivables"
and " suspense A/c - Profit MTM" respectively on account of derivative
d. During the year, the Bank has infused additional capital of Rs585.00
Crores in State Bank of Bikaner & Jaipur towards Right Issue.
D) Disclosures on Risk Exposure in Derivatives (A) Qualitative
i. The Bank currently deals in over-the-counter (OTC) interest rate
and currency derivatives as also in Interest Rate and Currency Futures.
Interest Rate Derivatives dealt by the Bank are rupee interest rate
swaps, foreign currency interest rate swaps and forward rate
agreements. Currency derivatives dealt by the Bank are currency swaps,
rupee dollar options, exchange traded options and cross-currency
options. The products are offered to the Bank's customers to hedge
their exposures and the Bank enters into derivatives contracts to cover
such exposures. Derivatives are used by the Bank both for trading as
well as hedging on balance sheet items. The Bank also deals in a mix of
these generic instruments. The Bank has done Option deals and
Structured Products with customers, but they have been covered on a
back to back basis in inter-bank market.
ii. Derivative transactions carry market risk i.e. the probable loss
the Bank may incur as a result of adverse movements in interest
rates/exchange rates/equity prices and credit risk i.e. the probable
loss the Bank may incur if the counterparties fail to meet their
obligations. The Bank's "Policy for Derivatives" approved by the Board
prescribes the market risk parameters (cut-loss triggers, open position
limits, duration, modified duration, PV01 etc.) as well as customer
eligibility criteria (credit rating, tenure of relationship etc.) for
entering into derivative transactions. Credit risk is controlled by
entering into derivative transactions only with counterparties
satisfying the criteria prescribed in the Policy. Appropriate limits
are set for the counterparties taking into account their ability to
honour obligations and the Bank enters into ISDA agreement with each
iii. The Asset Liability Management Committee (ALCO) of the Bank
oversees efficient management of these risks. The Bank's Mid-Office and
Risk Control (MORC) Department at Treasury, now Market Risk Management
Department (MRMD) independently identifies, measures, monitors market
risk associated with derivative transactions, assists ALCO in
controlling and managing these risks and reports compliance with policy
prescriptions to the Risk Management Committee of the Board (RMCB) at
iv. The accounting policy for derivatives has been drawn-up in
accordance with RBI guidelines, the details of which are presented
under Schedule 17: Significant Accounting Policies (SAP) for the
financial year 2011-12.
v. Interest Rate Swaps are mainly used at Foreign Offices for hedging
of the assets and liabilities.
vi. Apart from hedging swaps, swaps at Foreign Offices consist of back
to back swaps done at our Foreign Offices which are done mainly for
hedging of FCNR deposits at Global Markets, Kolkata.
vii. Majority of the swaps were done with First class counterparty
b) Segment Reporting:
1. Segment Identification
I. Primary (Business Segment)
The following are the primary segments of the Bank:- - Treasury
- Corporate / Wholesale Banking
- Retail Banking
- Other Banking Business
The present accounting and information system of the Bank does not
support capturing and extraction of the data in respect of the above
segments separately. However, based on the present internal,
organisational and management reporting structure and the nature of
their risk and returns, the data on the primary segments have been
computed as under:
i. Treasury - The Treasury Segment includes the entire investment
portfolio and trading in foreign exchange contracts and derivative
contracts. The revenue of the treasury segment primarily consists of
fees and gains or losses from trading operations and interest income on
the investment portfolio.
ii. Corporate/Wholesale Banking - The Corporate/ Wholesale Banking
segment comprises the lending activities of Corporate Accounts Group,
Mid Corporate Accounts Group and Stressed Assets Management Group.
These include providing loans and transaction services to corporate and
institutional clients and further include non-treasury operations of
iii. Retail Banking - The Retail Banking Segment comprises of branches
in National Banking Group, which primarily includes Personal Banking
activities including lending activities to corporate customers having
banking relations with branches in the National Banking Group. This
segment also includes agency business and ATMs.
iv. Other Banking business - Segments not classified under (i) to
(iii) above are classified under this primary segment.
II. Secondary (Geographical Segment)
i) Domestic Operations - Branches/Offices having operations in India
ii) Foreign Operations - Branches/Offices having operations outside
India and offshore Banking units having operations in India
III. Pricing of Inter-segmental Transfers
The Retail Banking segment is the primary resource mobilising unit. The
Corporate/Wholesale Banking and Treasury segments are recipient of
funds from Retail Banking. Market related Funds Transfer Pricing
(MRFTP) is followed under which a separate unit called Funding Centre
has been created. The Funding Centre notionally buys funds that the
business units raise in the form of deposits or borrowings and
notionally sell funds to business units engaged in creating assets.
IV. Allocation of Expenses, Assets and Liabilities
Expenses incurred at Corporate Centre establishments directly
attributable either to Corporate / Wholesale and Retail Banking
Operations or to Treasury Operations segment, are allocated
accordingly. Expenses not directly attributable are allocated on the
basis of the ratio of number of employees in each segment/ratio of
directly attributable expenses.
The Bank has certain common assets and liabilities, which cannot be
attributed to any segment, and the same are treated as unallocated.
During the year, the Bank has further refined the segmental transfer
pricing mechanism in order to report more relevant segment results.
This change effects the segment results inter se and has no impact on
the financials of the bank. The effect of the change on the segment
results is not fairly determined.
c) Related Party Disclosures:
1. Related Parties
i. DOMESTIC BANKING SUBSIDIARIES
1. State Bank of Bikaner & Jaipur
2. State Bank of Hyderabad
3. State Bank of Mysore
4. State Bank of Patiala
5. State Bank of Travancore
6. SBI Commercial and International Bank Ltd.
(up to 28.07.2011).
ii. FOREIGN BANKING SUBSIDIARIES
1. SBI (Mauritius) Ltd.
2. State Bank of India (Canada)
3. State Bank of India (California)
4. Commercial Bank of India LLC, Moscow
5. PT Bank SBI Indonesia
6. Nepal SBI Bank Ltd.
iii. DOMESTIC NON-BANKING SUBSIDIARIES
1. SBI Capital Markets Ltd.
2. SBI DFHI Ltd.
3. SBI Mutual Funds Trustee Company Pvt. Ltd.
4. SBI CAP Securities Ltd.
5. SBI CAPS Ventures Ltd.
6. SBI CAP Trustees Company Ltd.
7. SBI Cards and Payment Services Pvt. Ltd.
8. SBI Funds Management Pvt. Ltd.
9. SBI Life Insurance Company Ltd.
10. SBI Pension Funds Pvt. Ltd.
11. SBI - SG Global Securities Services Pvt. Ltd.
12. SBI Global Factors Ltd.
13. SBI General Insurance Company Ltd
14. SBI Payment Services Pvt. Ltd.
iv. FOREIGN NON-BANKING SUBSIDIARIES
1. SBICAP (UK) Ltd.
2. SBI Funds Management (International) Pvt. Ltd.
3. SBICAP (Singapore) Ltd.
B. JOINTLY CONTROLLED ENTITIES
1. GE Capital Business Process Management Services Pvt. Ltd.
2. C-Edge Technologies Ltd.
3. Macquarie SBI Infrastructure Management Pte. Ltd.
4. Macquarie SBI Infrastructure Trustees Ltd.
5. SBI Macquarie Infrastructure Management Pvt. Ltd.
6. SBI Macquarie Infrastructure Trustees Pvt. Ltd.
7. Oman India Joint Investment Fund - Management Company Pvt. Ltd.
8. Oman India Joint Investment Fund - Trustee Company Pvt. Ltd.
i. Regional Rural Banks
1. Andhra Pradesh Grameena Vikas Bank
2. Arunachal Pradesh Rural Bank
3. Cauvery Kalpatharu Grameena Bank
4. Chhattisgarh Gramin Bank
5. Deccan Grameena Bank
6. Ellaquai Dehati Bank
7. Meghalaya Rural Bank (Formerly known as Ka Bank Nongkyndong Ri
8. Krishna Grameena Bank
9. Langpi Dehangi Rural Bank
10. Madhya Bharat Gramin Bank
11. Malwa Gramin Bank
12. Marwar Ganganagar Bikaner Gramin Bank
13. Mizoram Rural Bank
14. Nagaland Rural Bank
15. Parvatiya Gramin Bank
16. Purvanchal Kshetriya Gramin Bank
17. Samastipur Kshetriya Gramin Bank
18. Saurashtra Gramin Bank
19. Utkal Gramya Bank
20. Uttaranchal Gramin Bank
21. Vananchal Gramin Bank
22. Vidisha Bhopal Kshetriya Gramin Bank
1. SBI Home Finance Ltd.
2. The Clearing Corporation of India Ltd.
3. Bank of Bhutan Ltd.
D. Key Management Personnel of the Bank
1. Shri Pratip Chaudhuri, Chairman (from 07.04.2011)
2. Shri R. Sridharan, Managing Director & Group Executive (A& S) (up
3. Shri Hemant G. Contractor Managing Director & Group Executive
(International Banking) (from 07.04.2011)
4. Shri Diwakar Gupta, Managing Director & Chief Financial Officer
5. Shri A. Krishna Kumar, Managing Director & Group Executive
(National Banking) (from 07.04.2011)
6. Shri O. P. Bhatt, Chairman (up to 31.03.2011)
7. Shri S. K. Bhattacharyya, Managing Director (up to 31.10.2010)
2. Parties with whom transactions were entered into during the year
No disclosure is required in respect of related parties, which are
"State-controlled Enterprises" as per paragraph 9 of Accounting
Standard (AS) 18. Further, in terms of paragraph 5 of AS 18,
transactions in the nature of Banker-Customer relationship have not
been disclosed including those with Key Management Personnel and
relatives of Key Management Personnel.
5. With regard to disclosures relating to Micro, Small & Medium
Enterprises under the Micro, Small & Medium Enterprises Development
Act, 2006, there have been no reported cases of delayed payments or of
interest payments due to delay in such payments to Micro, Small &
3. Letter of Comfort issued for Subsidiaries
The Bank has issued letters of comfort on behalf of its subsidiaries.
Outstanding letters of comfort as on 31st March 2012 aggregate to Rs
2086.56 Crores (Previous Year: Rs 1,411.20 Crores). In the Bank's
assessment no financial impact is likely to arise.
4. Provisioning Coverage Ratio:
The Provisioning to Gross Non-Performing Assets ratio of the Bank as on
31st March 2012 is 68.10% (Previous Year 64.95%).
5. Unamortised Gratuity Liabilities
In accordance with RBI circular no. DBOD.BP.BC.80/21.04.018/2010-11
dated February 9, 2011 the Bank has opted to amortise the additional
liability on account of enhancement in Gratuity limit over a period of
5 years beginning with the financial year ended March 31, 2011.
Accordingly the Bank has charged a sum of Rs 100 crores to the Profit
and Loss Account, being the proportionate amount for the financial year
ended March 31, 2012. The unpaid liability of Rs 300 crore as on March
31, 2012 will be amortised proportionately in accordance with the above
6. Amalgamation of SBI Commercial and International Bank Limited
Consequent to the notification of the "Acquisition of State Bank of
India Commercial and International Bank Ltd Order, 2011" issued by the
Government of India, the undertaking of State Bank of India Commercial
and International Bank Ltd (SBICI) stands transferred to and vests in
State Bank of India ("the Bank"), with effect from July 29, 2011, the
effective date. The results for the year ended March 31, 2012 include
the results of operations of the erstwhile SBICI for the period from
July 29, 2011 to the year end March 31, 2012 and the results of the
Bank are not comparable to that extent.
The amalgamation of State Bank of India Commercial and International
Bank Ltd (SBICI) with the Bank has been accounted for under the pooling
of interest method as prescribed in Accounting Standard 14
"Accounting for Amalgamations". Pursuant thereto, all assets and
liabilities including reserves of SBICI as on the effective date have
been transferred and vested in the Bank. The Bank held 100% of the
share capital of the SBICI on the effective date, which stands
cancelled. No shares were exchanged to effect the amalgamation.
The Assets and Liabilities of e SBICI Bank Limited taken over are as
7. Inter Office Accounts
Inter Office Accounts between branches, controlling offices and local
head offices and corporate centre establishments are being reconciled
on an ongoing basis and no material effect is expected on the profit
and loss account of the current year.
8. Disbursement of Special Balancing Allowance
During the year, Rs 908 cores of arrears of Special Balancing Allowance
was disbursed out of the provision held for Special Balancing
Allowance. An amount of Rs 41.11 crores was written back to the Profit &
Loss account during the year ended 31st March 2012, being excess amount
of provision held for Special Balancing Allowance.
9. Countercyclical Provisioning Buffer
In accordance with the guidelines issued by RBI vide their circular no.
DBOD. No. BP.BC.87/21.04.048/2010-11 dated 21st April, 2011 and the
dispensation granted to the Bank, the Bank has made an additional
provision of Rs 1,100.00 crores for the half year ended September 2011
thus achieving the required Countercyclical Provisioning Buffer of Rs
3,430.00 crores as on September 30, 2011 as per the above circular.
10. Additional Provision for NPAs
During the year, the Bank has voluntarily made an additional provision
of Rs 1,350 crores against certain non performing domestic advances to
provide for the estimated loss in collectible amount against such
11. Previous period figures have been regrouped/reclassified, wherever
necessary, to conform to current period classification. In cases where
disclosures have been made for the first time in terms of RBI
guidelines/Accounting Standards, previous year's figures have not been