State Bank of India in Arab World
SBI has branch offices in Bahrain and Oman, and a representative office in Egypt. It manages
exchange companies in Qatar, Oman and the UAE.
SBI in Bahrain
In 1976, SBI opened a representative office in Bahrain, which was upgraded to an offshore banking unit in 1977. In 2005, SBI embarked on a US$ 10-million Gulf Air expansion project in Bahrain.The bank has invested US$ 15 million in its first commercial branch in Bahrain, which will be operational by the end of 2006. It would include an onsite ATM that would in due course be
connected to all SBI ATMs in GCC countries and 7,000 other ATMs in India.This is SBI's second overseas commercial branch in the Middle East, after the one in Muscat. It would have
27 employees. SBI has designated its Bahrain office as the headquartersof its operations in the Middle East,West Asia and North Africa.
SBI in Qatar
SBI operates as an exchange company in Qatar.
In October 2006, the bank signed an electronic fund transfer agreement with Doha Bank. SBI Capital Markets and Doha Bank signed two memoranda of understanding to provide project financing and project management services to Qatar's corporate community. Doha Bank also markets the mutual funds floated by SBI in the Middle East.
Company Background
The State Bank of India (SBI) was incorporated in June 1806 as the Bank of Calcutta, which was later renamed as the Bank of Bengal. In January 1921, the Bank of Bengal was amalgamated with the Bank of Bombay and the Bank of Madras to form the Imperial Bank of India. In 1955, the Reserve Bank of India (RBI) acquired a controlling stake in the Imperial Bank of India, which was renamed as the State Bank of India in April 1955. SBI was India's first nationalised bank.With the passing of the SBI (Subsidiary Banks) Act in 1959, SBI took over eight former state-associated banks as its subsidiaries.
Currently, SBI has 13 subsidiaries, 8 associates and nearly 200,000 employees.
SBI is the largest bank in India. As on 31 March 2006, it had 70 overseas offices across
30 countries. It has correspondent banking relationships with 520 international banks in 123 countries.The bank also has nearly 1,100 Bilateral Key Exchange arrangements for SWIFT, enabling the flow of financial messages covering trade, remittances, etc.
SBI offers a wide range of services to its
customers, including personal banking, agricultural banking, NRI banking, international banking, corporate banking, e-banking, SME banking, etc.
In FY 2005-06, the bank earned total revenues of nearly US$ 9.3 billion, up from US$ 8.8 billion in the previous year. It generated 6.5 per cent of its revenues from overseas operations.
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Adoption of New Technologies
SBI Bahrain aims to install new IT and modern communication systems.
SBI in Oman
SBI began its branch operations in Muscat, Oman, in May 2004 with a capital of US$ 13 million. For this purpose, it leveraged the agreement between the Sultanate of Oman and the World Trade Organisation, which permitted foreign banks to enter the Oman market. SBI was the second Indian bank to establish operations in Oman after the Bank of Baroda, which entered Oman in 1976.
Factors for Success
Focus on Organic Growth
In the Middle East, SBI opened an office in Bahrain almost 30 years ago. It also began its operations in other Middle Eastern countries by opening branches, representative offices and providing exchange services. SBI has always focussed on increasing its domain expertise, and it has increased its presence in almost all major financial services offerings.
Strong Brand Equity
SBI has been leveraging its wide presence and strong brand image in the Indian market to expand its operations abroad. It has tapped a vast segment of the NRI customers in the Arab world. Since 1976, the bank's Bahrain operations have proved its capabilities in providing financial services in overseas markets. SBI's global brand image has enabled it to win goodwill and trust from governments and financial institutions in other countries.
Future Plans
Expansion Plans
SBI has major expansion plans in the Middle East.
The bank has invested US$ 15 million for opening a branch office in Bahrain. It is planning to increase its presence in the Middle East by establishing new branches all across the region, including the UAE, Saudi Arabia, etc.
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