Customer Relationship Management and Performance Improvement of SBI: An Empirical Analysis

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The objective of the study is to evaluate the performance of important financial indicators of State Bank of India (SBI) during pre-CRM period (2002–07) and CRM period (2007–13). In the era of globalization and privatisation; the leadership of SBI was challenged by ICICI Bank, the new private sector bank. The then Chairman of SBI decided to adopt customer relationship management (CRM) to rediscovering SBI as the leader of commercial banks in India. Analysis of eleven most important performance indicators provides meaningful insights to the relative performance of SBI in pre-CRM (2002–03 to 2006–07) and CRM period (2007–08 to 2012–13). After the implementation of CRM, deposits, advances, net profit, profit per employee, provision for NPA, earnings per share, number of accounts, return on equity, and share price of SBI in absolute terms have witnessed significant improvements at national level as well as at state level (for related performance indicators). Also expenses to income ratio and net NPA to advances ratio have shown a marginal declining trend at national level. Therefore, the hypothesis i.e. “There is improvement in the performance of SBI after the implementation of CRM” is accepted”. Though SBI share price has registered growth during the period from Rs 994 (as on 01/04/2007) to Rs 2073 (as on 28/03/2013); Performance of SBI in relation to benchmark indices like BSE Bankex and Sensex is lower. SBI should take 360 degree strategic measures to further improve overall performance so as to maintain its leadership and to maximise shareholders’ wealth with universal acceptance.