State Bank of India Act 1955 [Bare Act with Section Notes] by Taxmann is a definitive statutory text that provides readers with an up-to-date and comprehensive presentation of the law governing the constitution, management, and functioning of India's largest public sector bank. This Edition offers a verbatim reproduction of the Act as amended up to date, complete with detailed section notes, judicial commentary, and case law references to facilitate a deeper understanding of the statute's application and evolving interpretation.
This book is intended for the following audience:
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(Act No. 23 of 1955)
Enacted on: 8th May 1955
Came into force: 1st July 1955
Objective: To constitute and regulate the State Bank of India (SBI) as the principal agent for transacting government business and to extend banking facilities to rural and semi-urban areas.
Section 1 – Short Title & Commencement
? Establishes the title of the Act and empowers the Government to notify the commencement date.
Section 2 – Definitions
? Contains definitions like "corresponding new bank", "Reserve Bank", "subsidiary bank", etc.
Section 3 – Establishment of State Bank of India
? SBI established as a body corporate with perpetual succession and common seal.
Section 4 – Transfer of undertaking of the Imperial Bank
? Vests the entire business, assets, and liabilities of the Imperial Bank of India into SBI.
Section 5 – Authorized capital of SBI
? Authorizes capital up to ?20,000 crore (amended from ?20 crore) divided into shares.
Section 6 – Constitution of the Central Board
? Composition: Chairman, Managing Directors, Government and RBI nominees, elected directors.
Section 7 – Term of office and retirement
? Details tenure, retirement, and conditions of service of directors.
Section 9 – Meetings and powers of the Board
? Lays out powers and procedures of Central Board decision-making.
Section 17 – Business that SBI may transact
? Enumerates permissible activities: accepting deposits, advancing loans, foreign exchange, etc.
Section 18 – Non-banking business
? Prohibits certain speculative and non-banking activities unless permitted.
Section 19 – Other business restrictions
? Restricts SBI from acquiring companies or engaging in trade directly.
Section 31 – Audit
? SBI’s books are audited by auditors appointed in consultation with the RBI and CAG.
Section 32 – Returns and Reports
? Requires annual financial reporting to the Central Government and Parliament.
Section 36AD – Power to make regulations
? Empowers SBI to make internal regulations with prior approval of RBI.
Section 38 – Indemnity of directors
? Directors are protected from liabilities for actions done in good faith.
Section 39 – Act to override other laws
? Provisions of this Act take precedence over inconsistent laws.
| Aspect | Description |
|---|---|
| Primary Role | Act as agent of RBI and Government in rural outreach |
| Ownership | Majority shareholding with the Government of India |
| Powers | Broad banking functions plus specific powers for rural development |
| Control | Jointly regulated by RBI and Government of India |
| Amendments | Modified multiple times, notably in 2007 and 2011 to expand capital base and operational scope |
SBI authorized capital increased to ?20,000 crore (2007 amendment).
Provisions relating to subsidiaries updated to reflect mergers.
The bank has become a public listed company, though still majority Government-owned.
| Taxmann State Bank of India Act 1955 |
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