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Ethnic flavour: SBH to be chief banker to new Telangana state

G Naga Sridhar Hyderabad | Updated on April 08, 2014 Published on April 08, 2014

SBH has 650 branches in Telangana and 384 in Seemandhra. (Above) The main branch of the State Bank of Hyderabad at Gunfoundry in Hyderabad was built by the Nizam. -- P.V. Sivakumar

The new Telangana State, which will come into being in less than two months from now, will have an ethnic flavour in banking.

State Bank of Hyderabad (SBH), the only bank that owes its origins to the erstwhile Hyderabad State, is all set to become the principal banker to the new State that will combine 10 districts.

“We are the lead bank in seven districts of Telangana region and its is logical that we will be main banker and convener to the State Level Bankers’ Committee (SLBC), to be formed immediately after the appointed date of June 2,’’ M Bhagavantha Rao, Managing Director, SBH told Business Line here.

According to the Reserve Bank of India, SLBC plays an important role in coordinating and supervising developmental efforts of Government agencies and banks in a State or Union Territory. The meetings of these committees are to be held at quarterly intervals and should be chaired by the Chairman & Managing Director (CMD) of the convenor bank or additionally co-chaired by the Additional Chief Secretary or Development Commissioner of the State concerned. The participation of the Chief Minister has also become customary.

Though it has not been officially announced yet, according to reliable sources, the Government has decided to make SBH the channel for disbursal of salaries in Telangana, while in Andhra it could be done by State Bank of India.

Wide reach

What favours SBH in this regard is also its wide reach. It has 650 branches in Telangana as against 384 in the Seemandhra. “We are also working on higher operational efficiency and better reach by restructuring the General Manager and zonal officers’ roles. A new general manager’s office has been set in Warangal,’’ the MD said. The bank also has two GMs at Vijayawada and Vizag at present.

On the potential for banking in Telangana region, Bhagavantha Rao said there would be good scope for micro-small industries and food processing industries, including cold storage facilities. “We have also started some clusters in these segments,’’ he added.

Linkages

SBH has deep linkages with the history of Hyderabad. It was constituted as Hyderabad State Bank under the Hyderabad State Bank Act, 1941, with its first branch at Gunfoundry, Hyderabad. It had the distinction of being the central bank of the erstwhile State of Hyderabad, covering the present-day Telangana region of Andhra Pradesh, Hyderabad, Karnataka of Karnataka state and Marathwada of Maharashtra.

In this capacity it managed the official 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 April 5, 1942.

In 1956, the bank was taken over by Reserve Bank of India as its first subsidiary and its name was changed to State Bank of Hyderabad. Then it became a subsidiary of SBI in 1959 and is now its largest associate bank.

Published on April 08, 2014
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