The State Bank of India Act

The oldest commercial bank in India is the State Bank of India (SBI). It was established in accordance with the 1955 State Bank of India Act (Act No. 23 Of 1955). With its headquarters in Mumbai, Maharashtra, it is an Indian multinational public service bank and statutory authority for financial services. The Imperial Bank of India, which at the time was the largest commercial bank and served as the Central Bank for British India, was replaced by SBI as a result of this Act.

The Bank of Madras, the Bank of Calcutta, and the Bank of Bombay were combined to become The Imperial Bank. In 1955, the Reserve Bank of India acquired a 60% share in the Imperial Bank of India, which the Indian government then took over and renamed the State Bank of India.

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The President approved the Act on May 8, 1955, and it went into effect on July 1 of the same year. It is broken down into 8 Chapters with 57 Sections and 2 Schedules in each. This Bank was established to transfer Imperial Bank's business to it and to provide banking services to rural and semi-urban regions.

The Bank of Bengal, subsequently known as the Bank of Calcutta, was founded on 2 June 1806 and served as the forerunner of the State Bank of India in the first ten years of the nineteenth century. Other Presidency banks included the Bank of Bengal and the Bank of Bombay, both of which were founded on April 15, 1840. (incorporated on 1 July 1843). Royal charters led to the formation of the three Presidency banks as joint stock corporations. On January 27, 1921, the Presidency banks merged, and the newly formed bank was known as the Imperial Bank of India. It continued to be a joint-stock business, but without government involvement.

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The Reserve Bank of India purchased a majority interest in the Imperial Bank of India on July 1, 1955, and it later changed its name to the State Bank of India in accordance with the terms of the State Bank of India Act of 1955. In order to avoid any potential conflicts of interest because the Reserve Bank of India regulates the nation's banking industry, the Government of India later 2008 purchased the RBI's holding in SBI.

According to Section 3 of the Act, a bank to be known as the State Bank of India must be established to conduct banking and other operations in conformity with the terms of this Act and for the purpose of assuming the Imperial Bank's undertaking. Additionally, it permits the Central Government and any other individuals who are eligible to do so to become shareholders in the State Bank. As long as they are shareholders, they form a legal entity with perpetual succession and a common seal known as the State Bank of India, and they may bring and defend legal actions under that name.

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