Bank

4.1 PUBLIC SECTOR BANKS

4.1.1 STATE BANK OF INDIA

The roots of the State Bank of India rest in the first decade of 19th century, when

the bank of Calcutta, later renamed the Bank of Bengal was established on 2

June, 1806. The Bank of Bengal and two other Presidency banks, namely, the

Bank

of Bombay (incorporated

on 15

April 1840)

and

the

Bank

of

Madras (incorporated on 1 July 1843). All three Presidency banks were

incorporated as Joint Stock Companies, and were the result of the Royal

Charters. These three banks received the exclusive right to issue paper currency

in 1861 with the Paper Currency Act, a right they retained until the formation of

the Reserve Bank of India. The Presidency banks amalgamated on 27 January

1921 and the reorganized banking entity took as its name Imperial Bank of India.

The Imperial Bank of India continued to remain a joint stock company.

Pursuant to the provisions of the State Bank of India Act (1955), the Reserve

Bank of India, which is India’s Central Bank, acquired a controlling interest in the

Imperial Bank of India. On 30 April 1955 the Imperial Bank of India became the

State Bank of India. The Government of India recently acquired the Reserve

Bank of India's stake in SBI so as to remove any conflict of interest because the

RBI is the country's banking regulatory authority. SBI has acquired local banks in

rescues. For instance, in 1985, it acquired Bank of Cochin in Kerala, which had

120 branches. SBI was the acquirer as its affiliate State Bank of Travancore

already had an extensive network in Kerala. The State bank of India is the 29th

most reputed company in the world according to Forbes.1 Also SBI is the only

bank to get featured in coveted 'top 10 brands of India' list in an annual survey

conducted by Brand Finance and The Economic Times in 2010.2

_________________________

1

"World's Most Reputable Companies: The Rankings". Forbes.com. Retrieved 2010-08- 20.

2

"India's top 10 brands". Business.rediff.com. Retrieved...