State Bank of India (SBI) is the largest public sector bank in India. Launched in the first decade of the nineteenth century the bank has played a pivotal role in establishing the organised banking services sector across India by way being repositories to savings and lenders to leading businesses across India. State Bank of India has thus played a key role in the economic development of India.
State Bank of India along with its 5 associate banks (which are expected to be merged with SBI soon) has a network of over 13000 branches located across the most remote parts of India and catering to people from all works of life. State Bank of India provides services in both the personal banking and corporate banking segments.
Open an account and start a Relationship with SBI
Know your client: The very first step when opening a savings bank account with State Bank of India would involve completing the Know Your Client (KYC) guidelines. The KYC requirements are as follows:
- For Individuals: They need to submit key identity and address proof documents accepted by the bank.
- For Non-individuals: Proprietary or partnership organisations need to submit proof of name, address and activity like registration certificate, sales tax or income tax returns, utility bills or rental agreements etc.
Once a relationship is established with State Bank of India, the bank is ready to cater to the needs of its customers as per the individual requirements.
State Bank of India provides personal banking services to meet the savings, investment and finance needs of its customers.
- A Savings account can be opened with no minimum balance requirement under the ‘No Frills Account’ option or the account holder can opt for premium accounts under the State Bank of India– MOD (Multi option Deposit scheme). Under the MOD scheme operated by the bank, a minimum balance of Rs. 25,000 needs to be maintained in the account. Any amount in excess of this is ‘Auto’ transferred in units of Rs. 1,000 and deposited into a term deposit with minimum balance of Rs. 10,000, which enables the account holder to earn a higher rate of interest on his/her deposit.
- To teach the younger generation the importance of money and banking, the bank has introduced the ‘Pehla Kadam’ and ‘Pehli Udaan’ accounts for children aged less than 18 years.
- All the savings accounts have a ‘Nomination facility’.
- The balance in the account earns you 4% interest on a daily balance basis. The interest earned is credited to the account bi-annually.
Investment in Term Deposit
The deployment of excess funds in the account can be channelised to generate further wealth by way of various deposit schemes provided by the bank. Some of the features of the ‘Term Deposit’ account that can be opened with this public sector bank are:
- Term deposit can be opened with a basic minimum amount of Rs.1, 000/-, with no limit on the maximum amount.
- Tenure of the deposit can range from 7 days to 10 years.
- Payment of interest as per bank rules and type of account.
- Senior citizens earn an additional interest of 0.25% on such term deposit.
- Pre-mature Withdrawal: Retail term deposits can be pre-maturely withdrawn however, various penalties may be applicable.
- Tax Deducted at Source: If the interest earned on term deposit is above Rs.10, 000/- , then TDS payment at the applicable tax slab of the account holder. However, Form 15H/15G needs to be submitted by customers who do not qualify for payment of tax.
- The customers can avail auto renewal facility on maturity of the term deposit.
- Term Deposit can be opened under the Tax saving scheme. This deposit has a lock-in period of 5 years. The amount deposited under the Tax saving scheme is allowed as a deduction under section 80C of the Income Tax Act. The principal and maturity amount of this deposit is tax free, however, the interest earned by such deposits is taxable as per applicable rules.
Investment in Public Provident Fund (PPF)
You can open a PPF account with SBI by complying with the necessary KYC norms. The account is opened for 15 years with minimum annual deposit of Rs.500 and a maximum annual deposit of Rs.1.5 lakhs. The tenure can be extended by a further block of 5 years each time after maturity. The amount deposited in the account is eligible for deduction under section 80C of the Income Tax Act. The interest rate is revised by the government periodically and the amount of interest is credited on March 31 every year. The amount of interest paid is tax free. Limited withdrawal from the account is permissible after the end of 5th year for specified purposes. The account can be opened for a minor by a parent who acts as the custodian of the account till the account holder reaches 18 years of age. The account features nomination facility.
Investment in New Pension Scheme (NPS)
Unlike the previous generation which could depend on their pension to meet day to day expenses during the post retirement, the new India is moving to a non-pensioner society. It has therefore become important to encourage saving for post-retirement life. The New Pension Scheme is a welcome option to people looking for retirement planning.
NPS introduced in May 2009, is a pension scheme which was introduced to provide a monthly pension to the scheme holders post the retirement age of 60 years. The scheme is open for anyone above 18 years of age till 60 years of age. The scheme requires the account holder to have a KYC is place. The subscriber needs to get registered with the Central Record Keeping Agency (CRA) and a Permanent Retirement Account Number (PRAN) is generated. PRAN is to be quoted in every transaction done under the scheme.
The scheme is run under two options:
|Tier I||Tier II|
|Minimum Contribution for account opening Rs. 500||Minimum Contribution for account opening Rs. 1,000|
|Minimum contribution at a time Rs. 500||Minimum contribution at a time Rs. 250|
|Minimum Balance required at the end of the financial year is Rs. 6,000||Minimum Balance required at the end of the financial year is Rs. 2,000|
|The account holder needs to deposit money at least once a year.||The account holder needs to deposit money at least once a year.|
|The amount deposited cannot be withdrawn till the age of 60 years.||No restriction on the number of withdrawals|
|Of the total amount accumulated at the end of 60 years of the account holder, 40% of the amount is annuitized compulsorily and is used to pay pension to the account holder. The account holder has the option to annuitize the entire balance in the account.||Tier II option is used generally by employees for whom NPS is mandatory.|
Unlike PPF there is no fixed rate of interest earned on the amount deposited under NPS. The returns are market linked. The subscriber has the option to opt for investing is the schemes either Equity –High risk High return, Medium risk or low risk- fixed Income instruments. The subscriber can also choose the Pension Fund managers (SBI Pension Fund Private Limited is one of them). The amount invested under NPS is allowed as a deduction under section 80C of the Income Tax Act. Further, additional Rs.50, 000/- is allowed as a deduction under section 80CCD for the amount contributed towards NPS.
The customers can benefit from the banking relationship with State Bank of India to meet their financial needs be it buying a home, car or education. The bank also provides an ‘EMI Calculator’ to enable the customers to calculate the amount of their monthly repayments.
Home Loan: Home loan is provided under different categories depending upon the requirement and eligibility of the borrower. The Interest on home loan for loan amount of Rs.30 lakhs and below can be availed with a fixed or floating interest rate option. Floating interest rate is linked to MCLR.
Concessional interest rates are available for women, in case they are sole or co-applicants as long as they are also sole or co-owners of the property for which home loan is availed. Concessional interest rate on auto loans is also available for women. Read more about SBI Home Loan
Education Loans: State Bank of India provides educational loans for studying in India or abroad. These loans come with a moratorium period and the repayment commences generally after one year of completion of course. The interest rates are linked to MCLR (Marginal Costs of Funds based Lending rate) and have a reset period of 1 year. In most schemes, girl students are given a concession of 0.50% on the usual lending rate. A further concession of 1% for full tenure of the loan is provided if interest is serviced promptly during the moratorium period. Check more information about SBI Education Loan
Personal Loans: The amount of loan sanctioned is based on the Net Monthly Income (NMI) of the borrower. The NMI/EMI ratio should not exceed 50. That is if the NMI is Rs. 10,000 then the EMI should not be more than Rs. 200. The bank charges processing fee on personal loans in the range of 2-3% and the same is deducted from the amount sanctioned. There are no pre-closure or pre-payment charges in case interest is charged on floating rate basis. The maximum loan amount is capped at Rs.15 lakhs. The loan tenure generally ranges from 24 months to 60 months i.e. 5 years.
Loan against Property: State bank of India also provides loan against mortgage residential or commercial property. The amount of loan that can be availed under the scheme is a minimum of Rs. 10 lakhs to a maximum of Rs. 7.5 crores. The amount of loan is determined based on the value of the property and the net monthly income of the borrower. The loan tenure ranges from 5 years to 15 years.Also read about SBI Loan against property
Loan against Securities: State Bank of India provides loan or overdraft facility against debentures, shares or government bonds for meeting personal or business contingencies. Loan against debentures and shares can be availed up to a maximum Rs. 20 lakhs and is repayable within 30 months. The loan is provided against pledge of shares or debentures.
Gold Loans: Gold loan is provided against pledge of gold ornament and ranges from Rs. 20,000 to Rs.20 lacs. A margin of 25% is maintained by SBI when granting a gold loan. The facility is provided in form of loan or overdraft.
State Bank of India provides a streamline process for ensuring speedy loan approvals and disbursals. The turnaround timeline for some of the common types of loans are as follows:
Metro and Urban Centers
|Type of Loan||Indicative timelines for loan disbursal|
|Home Loan||Ranging from 6 days to 16 days and additional 2 days for documentation and disbursal|
|Car Loan||2 days (1 day for HNIs)|
|Educational Loan||6 days|
|Personal loan||3 days|
|Loan against property or Rent||6 days|
In semi- urban and rural centers these timelines may be slightly longer. The turnaround time or the TAT is considered from the date of receipt of completed documents by the bank from the loan applicant. However, the time taken by the applicant for submitting documents and/or for furnishing information sought by the bank will not be taken into account when calculating the applicable TAT. The number of days as mentioned above is based on the full working days.
State Bank of India encourages use of plastic money to facilitate all kinds of financial transactions. The bank provides a range of debit cards that suit the unique requirements of each client group:
Debit Cards: State Bank of India provides debit cards starting from classic debit cards to enable account holder to shop, book tickets or withdraw cash. The Bank provides International debit cards for the convenience of individuals who travel outside the country often. The maximum amount of transaction that can be done varies for Silver, Gold and Platinum International debit cards.Read more about SBI Debit Cards
Contactless Debit Card: sbiINTOUCH Tap and Go debit card is based on Near Field Technology and uses contactless technology to transmit purchase information to and from a contactless reader. The card is a multi-purpose international debit card that can be used by the holder to make payments at any merchant outlet which support contactless transactions.
SBI Mumbai Metro Combo Card: The card is designed especially for Mumbaiker commuting using the Mumbai Metro. The card can be used at Mumbai Metro stations to pay for metro tickets as well as for shopping at various merchant outlets.
SBI Business Debit Card: These cards are designed for non- individual business clients of the bank. The card enables the holder to make online payments and travel cash free internationally. SBI Business Debit Card ensures high level of security from card frauds as it uses the highly secure EVM chip.
- SBI Prepaid Debit cards: State Bank of India offers various pre-paid card options. State Bank Gift Cards need to be loaded with an amount of at least Rs. 500 to a maximum of Rs.50,000 and can be a great gift to near and dear ones. The cards have a validity of 3 years. State Bank Foreign Travel Card is a pre-loaded card which is available in 8 foreign currencies. As per RBI norms, the maximum amount that can be loaded is currently capped is USD 250,000. The card is issued on validation of passport and other travel documents.
The bank rewards their customers for transactions executed using their debit cards by way of State Bank of India Rewardz program. The account holder earns pre-determined points against the payment made through State Bank of India debit cards. The amount of points that can be earned varies based on the type of debit card. The account holder can accumulate these points and use them to shop, dine, book tickets or receive freebies.
In addition to the banking facility, State Bank of India also provides the following services to its account holders
Largest network of ATM Services: State Bank of India provides ATM cum Debit card which can be used to withdraw cash and transact offline or online. State Bank of India has the largest network of ATMs across India with more than 43000 ATMs. ATM facility can be availed to withdraw cash, change PIN, make balance enquiries, procuring mini bank statement, make credit card payments and many other services.
Demat Services: In collaboration with SBICap Securities Limited, the bank provides a cutting-edge 3 in 1 account option which acts as a savings a/c, demat account and online trading account in one. With effect from April 1, 2017 the demat account would be opened with SBICap Securities Limited, while the savings account would continue to be held by SBI. The demat account holders are benefited in following ways:
- Physical shares are converted into demat form
- Pledging of shares to the lenders is facilitated
- Securities lending can be facilitated
- The account holder can invest in shares and transact in equities online.
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- Safe Deposit Lockers: The bank provides a safe deposit locker facility at many of its branches to secure valuables. The service is provided against payment of annual rental fees in lieu of the locker. The amount payable by the lender depends on the size of the locker. Lockers have a nomination facility that can be availed by the renter.
The SBI Bank assists in seamless management of your business finance through its unique current account services. The features of these accounts are:
- Low minimum balance requirement
- Overdraft or SBI Loan against fixed deposit option equal to up to 90% of the principal amount of deposit can be availed. Also overdraft facility can be availed based on the customer’s credit history.
- No restrictions on number of payments and withdrawals.
- Multi city cheque facility available.
- Statement of account is e-mailed to customers as per existing rules.
- Account maintenance charge as applicable.
The Bank has used cutting-edge technology to service its clients efficiently. The various facilities provided by the bank include:
Individual Account holders
Some of the operations that can be executed through the online portal are:
- Opening a SBI Fixed Deposit Account or SBI Recurring Deposit Account
- Making Third party transfers via NEFT, RTGS, VISA Pay or IMPS
- Making Utility Bill payments
- Request for issuance of a new cheque book/stop check/hotlist debit card, etc.
- Apply for a loan by filling out the online application
This has made banking transaction speedy, with no need to visit the branch.
Other than the normal banking transactions, the bank provides Value Added Service for Individual customers like
- Facility to pay Self-assessment tax and advance tax to the government. The customer can view their Tax credit statement (Form 26AS) and understand the amount of Tax deducted from their account.
- They can also e-verify their Income Tax Return.
Non-Individual or Corporate Account holders
Non-Individual or Corporate Account holders can avail the online services by way of opening account under the following options:
|Type of Product||Key Features|
Thus, the Non-individual account holders can transact and make payment of Sales Tax, professional tax and other government dues and also make Employee Provident Fund contribution (EPF) of the firm, with minimum paper work and at any time of the day from the comfort of their offices.
Also, they can choose the plan that enables them to monitor the banking transactions, at the same time delegate responsibility to their employees.
- Mobile Banking Services: With banking literally at your fingertips, the bank provides mobile service application to mobile users of Android and iPhone smartphones. This ensures 24X7 online access and checking of balance, transfer of funds through IMPS, mobile payments and more.
State Bank of India has introduced the Mobile Wallet - ‘State Bank Buddy’ which can be easily downloaded on your mobile. The wallet can be loaded using debit card, internet banking or IMPS. The App is available in 13 languages and can be used for paying bills, booking hotels or cinema tickets as well as various other transactions without using cash.
mCash: This is the facility to transfer cash available on the online portal of State Bank of India and the mobile application. The account holder can transfer the money without adding a beneficiary. The account holder transfers the money using the beneficiaries’ mobile number or E- mail Id. The beneficiary would receive a communication of the funds and a password, which is used to claim the funds.
- sbiINTOUCH: State Bank of India is the first bank in India to introduce the concept of digital banking with sbiINTOUCH. These branches operate on a self-service model and you can open a savings bank account thru account opening kiosks in 15 minutes or less. State Bank of India has presently opened its sbiINTOUCH branches at 3 locations across India and intends to expand the service to 250 additional branches across India.