The largest lender of the country, State Bank of India has appointed McKinsey and Co as its advisor to aid it in building its rural business. The banking major has paid a sum of Rs. 62.8 crore to McKinsey for the purpose.
The bank had kept a project assigned to McKinsey in 2007 on hold due to some operational causes. The services with the global consultant has again been revived in March 2010.
"SBI had engaged McKinsey & Co as consultants in January, 2007, for a period of four months for building bank's rural banking business. However, the engagement was temporarily put in abeyance after some time due to operational reasons," Minister of State for Finance Namo Narian Meena said.
McKinsey has been appointed for 4 months in order to resume the dormant project of 2007, he said.
The consultant would be advising SBI on issues like review of rural strategy, revised channel strategies to outreach, key partners to target, technology plan, business plan, organisational redesign etc, he said.
Meena also said that the bank had paid a consultancy fee of Rs 9.99 crore to the US-based McKinsey & Co in 2006-07.
Other consultancy firms like Price Waterhouse was appointed in the year 2006-07 and given a payment of Rs 1.04 crore for providing advice on certain issues while Ernst & Young was hired in 2008-09 and paid fee of Rs 1.31 crore for providing advisory services to SBI.