Assessing the Development, Effectiveness, and Sustainability of SBI in the Post-Epidemic Era

Abstract

This study examines the financial performance of the State Bank of India (SBI) over the recent five‐year period (FY2020–FY2025), focusing on profitability, asset quality, capital adequacy, efficiency, and growth. Using secondary data from SBI’s annual reports and industry publications, key financial ratios are analysed to evaluate trends in Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), Non‐Performing Asset (NPA) ratios, Cost‐to‐Income ratio, and other indicators. The study finds that SBI has shown substantial improvement in asset quality (declining gross and net NPAs), strong growth in profitability and capital adequacy, though efficiency and margin pressures remain. Major challenges such as rising deposit costs, competition, regulatory compliance, and digital transformation are identified. The paper concludes with suggestions for sustaining growth and improving efficiency. The study also identifies several enduring challenges that continue to affect SBI’s performance. Operational efficiency, reflected through the cost-to-income ratio, remains under strain due to increasing operating expenses and compliance requirements. In addition, margin pressures arising from higher deposit costs and competitive lending rates limit the growth of interest income. The fast-paced digital transformation within the banking sector, coupled with mounting competition from private banks and emerging fintech firms, further intensifies the strategic hurdles SBI must address to preserve its market leadership. In conclusion, the paper emphasizes the necessity for SBI to enhance its digital infrastructure, implement advanced risk management frameworks, and pursue cost rationalization strategies in order to ensure sustained profitability and long-term growth. Broader policy implications for public sector banks are also highlighted, stressing the importance of continuous innovation, customer-centric approaches, and regulatory preparedness in a rapidly evolving financial environment. Overall, the study offers a nuanced understanding of SBI’s financial performance and provides valuable recommendations for policymakers, regulators, and industry stakeholders