STATE BANK OF HYDERABAD

STATE BANK OF HYDERABAD

CHAPTER 3
CHAPTER

COMPANY
PROFILE
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COMPANY PROFILE

STATE BANK OF HYDERABAD PROFILE

State Bank of Hyderabad was constituted as Hyderabad State Bank on

08.08.1941 under Hyderabad State Bank Act, 1941. The Bank started with
the unique distinction of being the central bank of the erstwhile State of
Hyderabad, covering present-day Telangana region of Andhra Pradesh,
Hyderabad – Karnataka of Karnataka state and Marathwada of
Maharashtra state, to manage its currency – Osmania Sikka and public
debt apart from the functions of commercial banking. The first branch of
the bank was opened at Gunfoundry, Hyderabad on 5th April, 1942.

In 1953, the Bank took over the assets and liabilities of the Hyderabad
Mercantile Bank Ltd. In the same year, the Bank started conducting
Government and Treasury business as agent of Reserve Bank of India. In
1956, the Bank was taken over by Reserve Bank of India as its first

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subsidiary and its name was changed from Hyderabad State Bank to State
Bank of Hyderabad. The Bank became a subsidiary of State Bank of India
on the 1st October 1959 and is now the largest Associate Bank of State
Bank of India.

All the branches of the Bank are totally networked under Core Banking
Solutions,offering a vide range of products to it’s customers. All the
customers of the Bank have access to the latest technologies like Internet
Banking, ATMs etc. The Bank has pan India presence and operates
through more than 1000 Bank branches

About State Bank of Hyderabad / Board of Directors

Shri O. P. Bhatt
Chairman
Ex-officio under Section 25(1)(a) of the
State Bank of India (Subsidiary Banks) Act,1959

Smt Renu Challu

Managing Director

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Shri Kaza Sudhakar Photo no available

Director Shri R Sridharan
Nominated by the Reserve Director
Bank of India Nominated by the State Bank
of India

Shri B Ramesh Babu Shri B S Gopala Krishna

Director Director
Nominated by the State Nominated by the State Bank
Bank of India of India

Shri V. Murali
Director
Shri Ramesh Datla
Nominated by the State Bank
Director
of India
Nominated by the State
Bank of India

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Shri Gopal Vaidya Shri P. Narasimha

Director Director
Nominated by the Govt. of Nominated by the Govt. of
India India

Director
Nominated by the State
Bank of India

Prof. V. Venkata Ramana Shri S Gopal Krishna

Director Director
Nominated by the State Nominated by the Govt. of
Bank of India India

Organizational Set-up:

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SERVICES PROVIDED BY STATE BANK OF

HYDERABAD

Services
Demat/Deposito Electronic Fund Safe Deposit
ry Services Transfer System Lockers

ATM Services Internet RISET

Banking Information and
Formats
ATM Locations Service Charges Customer
Service

Download    RTGS , NEFT Frequently

service_charges. & GRPT Asked Questions
doc (FAQ)
Mobile Banking Cash NEFT - Contact
Management Details of
Products - Customer
Divident Facilitation
Warrants Centres
New Pension Cheque Settlement of
System Collection Policy claims in respect
of Deceased
Depositors
Demat/depository services:

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We have launched depository participant services with National Securities

Depository Ltd., (NSDL). You can now hold your securities as electronic
book entries and transfer securities without actually handling physical
scripts. Hand in your share certificates with a Demat Request form. When
you want to sell or purchase securities, you only need to give
delivery/instructions to effect a settlement.

Why should I hold securities in dematerialized form?

Because, in the demat form, you do not run the risk of theft, loss,
misplacement, bad deliveries, or damage to scripts. No stamp duties on
transfers of securities.
No bad deliveries

The settlement cycle is faster. You do not lose out on market opportunities
as the securities are available in your account immediately after pay
out(T+2 settlement). There are no cumbersome transfer deeds to be signed
and bonus and rights shares are credited by issuers directly into your
demat account, cash components to your SB/CA accounts maintained at
your branch directly through ECS, eliminating delays.

When you purchase new issues of securities in the primary market, they
are directly credited to your account on allotment. You enjoy preferential
treatment to obtain loans against demat shares. SBH is registered with
NSDL as a Depository Participant, which permits us to perform the
following activities:

Our Depository Participant ID NO. IN 301397 situated at Gunfoundry,

Hyderabad.
• Demat and Remat of securities such as equities, shares and debentures
• Market transfer purchases and sales
• Off-Market transfer purchase and sales

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• Noting pledges SCHEDULE OF CHARGES for individuals and

corporate houses

Agreement Rs.100/-
Charges/Stamp Duty

Account Opening None

Account Closing None
Annual Maintenance Rs.200/- p.a.
Charges

Dematerialisation Rs.100/- p.a. for SBH staff

and pensioners

Rematerialisation Rs.2/- per certificate

Minimum Rs.10/- + Courier
charges Rs.25/- per request
Transaction Fee Rs.25/- per certificate or
0.20% of the market value,
whichever is higher
Market Purchase 0.04% of value, minimum of
Credit Rs.20/- for retail customer
Rs.40/- for others per trade
For CP- Nil

Market Sale 0.04% of value, minimum

Rs.20/- for retail customer
Rs.40/- for others per trade
0.02% of face value for CP,
maximum of Rs.500/- per
trade

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Off-Market Purchase 0.04% of value, minimum of

Rs.20/- for retail customers
Rs.40/- for others per trade

Off-Market Sale 0.04% of value, minimum of

Rs.20/- for retail customers
Rs.40/- for others per trade

Inter Depository Rs.20/- per transaction

Transactions

Pledge: Creation / Rs.100/- per request and

Confirmation / Rs.100/- per request or
Closure invocation
Custody Charges None for retail customers
Equity 0.02%, minimum of Rs.25/-
per quarter for companies
that have paid one time
charges
For CP- Nil

Custody Charges 0.15% of the value of the

Government Securities holdings as on the last Friday
of the month

Electronic fund transfer

RBI’s Electronic Funds Transfer (EFT) system facilitates inter-bank and

intra-bank fund transfers among our 15 notified centers. EFT transfers are
soon coming to replace demand drafts because they are faster, less
expensive, and more secure. SBH levies nominal service charges for such

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transfers. The funds are transferred to the beneficiary’s account either on

the same day or on the next working day.
You can transfer a maximum of Rs.2 crore in a single transaction. To
make an EFT transfer, you need to fill up and submit an EFT request form.
You can submit the form either online or at the branch where you hold an
account. Provide the following information in the EFT form:
• The name of the beneficiary
• The name of your bank and branch name
• Your account number
• The amount to be remitted

SBH offers the EFT service at the following centers: Mumbai, Chennai,
Kolkata, New Delhi, Ahmedabad, Bangalore, Bhubaneshwar, Chandigarh,
Guwahati, Hyderabad, Jaipur, Kanpur, Nagpur, Patna, and
Thiruvananthapuram.

SAFE CUSTODY LOCKERS

For the safety of your valuables we offer our customers safe deposit vaults
or locker facilities at nominal annual charges depending on the size of the
locker and the branch. Please avail nomination facility. Rentals in rupees
p.a.

ATM SERVICES:

SBH’s ATM Debit card services offer customers easy access to money
anytime from anywhere.
The card is safe and secure and eliminates the need to carry large amounts
of cash. It saves you time and the inconvenience of going to the bank for

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cash withdrawals.
You can withdraw from Savings and Current accounts, including overdraft
accounts. You can view the current balance and also a mini statement of
the last five transactions on your account. You are provided a Personal
Identification Number (PIN) when you receive the card. You can change
the PIN later.

ATM cum Debit Cards issued by the Bank can be used at more than 12500
ATMs of Andhra Bank, Bank of India, Corporation Bank, Dena Bank,
HDFC Bank, Indian Bank, IndusInd Bank, Punjab National Bank, UCO
Bank, Union Bank of India , UTI Bank, Canara Bank and  Bank of
Rajasthan which are members of bilateral sharing arrangement. 

ATM cum Debit Cards issued by the Bank can also be used in India at the
ATMs ,other than those under bilateral sharing arrangement, displaying
any one or all of MasterCard, Maestro or Cirrus Logos. The Bank’s
International Debit Card can be used at more than 10,00,000 ATMs across
the world, displaying any one or all of MasterCard, Maestro or Cirrus
Logos. The rates for such usage have been revised with effect from 01-11-
2009. Customers are requested to take note of the revised rates, as under : 

Type of Account Service Revised Charges

Saving Bank Account Balance Enquiry NIL 

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Current Account and Balance Enquiry NIL

KCC

Savings Bank Account Cash Withdrawals:  

a. Free
a. Upto 5 withdrawal b. Rs 20/- per
transactions at other withdrawal
Bank ATMs in a month transaction

b. Above 5 withdrawal
transactions

Current Account and Cash Withdrawals Rs 20/- per withdrawal

KCC transaction. (i.e. No free
withdrawal transaction
permitted)

INTERNET BANKING:

SBH’s Internet banking facility is an online banking facility that can be

accessed from the website. You need to register yourself at the branch
where you hold an account. You will be provided with a customer
identification numbe and an initial password.
You can:
• Browse various types of accounts, such as Savings Bank account and
Current account
• Download account statement
• Communicate with SBH through eMail
• Order new cheque books through eMail

CUSTOMER SERVICES

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In terms of Reserve Bank of India directions, an ad-hoc committee on

procedures and performance audit on customer service in banks has been
constituted in our bank, with AGM (DB) as the nodal officer and Senior
Manager level officials as members. The committee would look into
simplification of procedures and practices with a view to safeguarding the
interests of common persons and to improve the customer service in the
areas of foreign exchange transactions, government and public debt
transactions, banking operations and currency management. The
committee would also recommend for modification/rationalization of
existing RBI guidelines that could help in further enhancing the customer
service.

MOBILE BANKING :

SB FreedoM – Your Mobile Your Bank

Away from home, bills can be paid or money sent to the loved ones or
balance enquiries done anytime 24x7 !!!That is what SBI FreedoM offers
-convenience, simple, secure, anytime and anywhere banking.
The service is presently available on java enabled mobile phones over
SMS/ GPRS/ WAP as also non java phones with GPRS connection. The
service can be availed over the free GPRS facilities offered by various
mobile service providers. The services for other non-Java mobile phones
are under development and will be offered using Unstructured
Supplementary Services Data (USSD).

The following functionalities will be provided in the Phase I :

-Funds transfer (within and outside the bank –using NEFT)
-Enquiry services (Balance enquiry/ Mini statement)
-Request services (cheque book request)
-Bill Payment (Utility bills, credit cards)
-M Commerce (Mobile Top Up, Merchant payment, SBI life insurance
premium)
Business Rules Governing Mobile Banking Services:

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 The Mobile Banking Service will be available to all the customers having a
satisfactory running account (Current/ Savings). The customers will have
to register for the services.
 Daily transaction limit of Rs.50,000/- for both fund transfer and bill/
merchant payment individually however combined limit for both funds
transfer and bill/ merchant payment cannot exceed Rs.50,000/- per
customer with an overall calendar month limit of Rs.2,50,000.00
 The service will be carrier-agnostic i.e. all customers can avail the mobile
banking service with the Bank irrespective of the service provider for their
mobiles.
 The service is free of charge. However, the cost of SMS / GPRS
connectivity will have to be borne by the customer. 

CASH MANAGEMENT PRODUCTS:

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Features Cash Management Product (CMP)

Eligibility All Companies who wish to pay Dividends to their investors

Scheme details 1. The company enters into an MOU with the Bank, specifying
details of terms and conditions
2. It opens Current Account "Dividend Warrant A/c"
3. Deposits total amount of dividend payable into this A/c
4. Co. gives a list of DW containing all details like DW No.,
amount, beneficiary name and a/c no. , date of payment of
Warrants etc
5. The paying branches pay the DW on presentation through
respective menu option

Benefits of the 1. DW payable at par at all branches

Scheme 2. Built in security features, as the system validates DW No. &
amount at the time of payment
3. Manual intervention for reconciliation of account is not
required
4. Company can access details of paid Warrants through
statement of account / Corporate Internet Banking facility

GENERAL RISKS

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For taking an investment decision the investor must rely on their

examination of the Offeror and the Offer including the risks involved. The
securities have not been recommended or approved by Securities and
Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or
adequacy of this document .

OFFEROR’S ABSOLUTE RESPONSIBILITY

The Offeror, having made all reasonable inquiries, accepts responsibility

for, and confirms that this Information Memorandum contains all
information with regard to the Offeror and the Offer, which is material in
the context of the Offer, that the information contained in this Information
Memorandum is true and correct in all material aspects and is not
misleading in any material respect, that the opinions and intentions
expressed herein are honestly held and that there are no other facts, the
omission of which makes this document as a whole or any of such
information or the expression of any such opinions or intentions
misleading in any material respect. The Arranger is not required to file this
document with SEBI/ROC as it is on private placement and not an Offer to
the general Public.

CREDIT RATING

CRISIL Ltd. has assigned a ‘AAA/stable’ (pronounced Triple A with

stable outlook) rating
to the captioned debt programme of the Bank. This rating indicates the
highest degree of
safety with regard to timely payment of interest and principal on the
instrument. The rate instrument carries the lowest credit risk.

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CARE has assigned a ‘CARE AAA’ (pronounced Triple A) rating to the

captioned debt programme of the Bank. This is the best credit quality
rating assigned by CARE.
Instruments with this rating are considered to be of the best credit quality,
offering highest safety for timely servicing of debt obligations. Such
instruments carry minimal credit risk.
The rating is not a recommendation to buy, sell or hold Securities and
investors should take their own decision. The rating may be subject to
revision or withdrawal at any time by the assigning rating agency and each
rating should be evaluated independently of any other rating. The rating
obtained is subject to revision at any point of time in the uture. The rating
agencies have a right to suspend, withdraw the rating at any time on
the basis of new information, etc.

TRUSTEES FOR THE BOND HOLDERS:

IDBI Trusteeship Services Ltd., have given their consent to the Bank vide
their letter No
2846/ITSL/OPR/CL-2009-10 Dated 28.08.2009, for being appointed as
Bond Trustee for the present private placement.

Lead Arranger to Co-Arranger to the Co- REGISTRARS Trustee For

the Private Private Placement Arranger TO The

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Placement to THE ISSUE Bondholders

the
Private
Placeme
nt

Darashaw & Co. Pvt Standard KARVY IDBI

Ltd. Chartered Computer Trusteeship
1205-06 Bank
90, Share Private Services Ltd.
Regent Chambers, Ltd Registered
M.G.Road,
208 Nariman Point, Mumbai – 17-24, Vittal Office
Mumbai 400 021 400 001. Rao Asian Building,
Tel no: Tel : 022
Nagar, Ground Floor
022 6630 6612 22617151
Fax : 022 Madhapur, 17, R Kamani
Fax no: 22651255 Hyderabad -500 Marg, Ballard
022 2204 0031/40 081 Estate
Andhra Pradesh Mumbai – 400
Tel: 040 001
23420815-28 Tel: (022)
Fax 23420814 66311771-3
Fax: 91-22-
66311776
E-mail:
[email protected]
m

Brief summary of the business/ activities of the issuer and its line of
business
HIGHLIGHTS OF THE BANK

1. Bank with more than 67 years of existence.

2. Member of the State Bank Group, the largest banking Group in India.
The Group has the biggest network of branches and the highest market
share of deposits and advances in the country.
3. Professionally managed Bank with an uninterrupted record of
profitability since inception.
4. Large Network of 1034 branches and 28 extension counters as on June,
30 2009.
5. Low net NPA ratio of 0.64% as on 30th June 2009.
6. Capital Adequacy Ratio of the Bank stood at 12.54% as on June 30, 2009
Under Basel-I and 13.96% under Basel-II, which is well above the
stipulated minimum of 9% prescribed by the Reserve Bank of India.
7. Return on Average Assets stood at 0.59% and Return on Average Net
Loan Policy:

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State Bank of Hyderabad’s Loan Policy (hereinafter referred to as “The Loan

Policy” or “The Policy”) is aimed at accomplishing its mission of all-round
growth with maximum profits, achievement of pre-eminence in banking with
commitment to excellence, in rendering customer, shareholder and
employee satisfaction, while continuing to emphasis on its development
banking role to be fulfilled through a skilled and committed workforce and
technological up gradation.
The Loan Policy of the Bank has successfully withstood the test of time and
with inbuilt flexibilities, has been able to meet the challenges in the market
place. The policy is well documented and implemented through circular
instructions and periodic guidelines. The procedural aspects are highlighted
in the Bank’s Book of Instructions. The policy, at the holistic level is an
embodiment of the Bank’s approach to sanctioning, managing and
monitoring credit risk and aims at making the systems and controls effective.

The basic tenets of State Bank of Hyderabad’s Loan Policy are as follows:

(i)The policy establishes a commonality of approach regarding credit basics,

appraisal skills, documentation standards and awareness of institutional
concerns and strategies, while leaving enough room for flexibility and
innovation.

(ii) Exposure levels are set out in the policy in order to ensure growth of assets
in an orderly manner.

(iii) The policy sets out minimum scores/hurdle rates (in terms of Credit Risk
Assessment parameters) for new/additional exposures.

(iv) Bank’s general approach to Export Credit and Priority Sector Advances is
set out in the policy.

(v) The policy lays down norms for take over of advances from other
banks/FIs.

(vi) Bank’s stand on granting credit facilities to companies whose directors

are in the defaulter’s list of RBI is covered in the policy.
(vii) The policy aims at continued growth of assets while endeavoring to
ensure that these remain performing and standard. To this end, as a matter
of policy the Bank does not take over Non-Performing Assets (NPA) from
other banks.

The Board of Director the Bank is the apex authority in formulating all matters
of policy in the bank. The Credit Risk Management Committee (CRMC) deals
with issues relating to credit policy and procedures on a Bank-wide basis. The
CRMC sets broad policies for managing credit risks, sets parameters for

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growth of credit portfolio within the boundaries of exposure limits, and

reviews credit appraisal systems.

ASSET CLASSIFICATION, INCOME RECOGNITION &

PROVISIONING:

ASSET CLASSIFICATION:

The Bank classifies its assets in compliance with RBI guidelines. Under these
guidelines, an asset is classified as non-performing if any amount of interest /
principal remains overdue for more than 90 days in respect of term loans. In
respect of overdraft / cash credit, an asset is classified as non-performing if
the account remains out of order for a period of more than 90 days and in
respect of bills, if they remain overdue for more than 90 days. In case of retail
assets, the Bank classifies an asset as non-performing where any amount of
interest / principal remains overdue for more than 90 days in respect of all
loans.
NPAs are further categorized into three groups i.e. Substandard, Doubtful
and Loss Asset depending upon the period of delinquency and availability of
tangible security. The table below gives the criteria for asset classification viz.
Standard, Substandard, Doubtful and Loss asset-

Category Classification
1. Performing

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Standard Assets An asset which has not posed any problem

and which
does not carry more than the normal business
risk.

2. Non-
Performing
a)Sub-standard An asset which has been non-performing for
Assets a period
less than or equal to twelve months

b)Doubtful Assets An asset which has been non-performsing for

a period
of over 12 months

c)Loss Assets Asset where loss has been identified by the

Bank or
auditors / RBI and any non-performing asset
where the
value of security is less than 10% of the dues
to the bank.

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