The State Bank of India (SBI) is a major public sector bank and a statutory body established under the State Bank of India Act, 1955. Its origins trace back to the Imperial Bank of India, which was formed in 1921 by the amalgamation of the three Presidency Banks: the Bank of Bengal (1806), the Bank of Bombay (1840), and the Bank of Madras (1843). The institution was created on July 1, 1955, through the nationalization of the Imperial Bank of India, based on the recommendations of the All India Rural Credit Survey Committee (1951). The primary problem it solved was the need for a state-sponsored bank to extend formal banking and credit facilities to India's vast rural areas, thereby supporting economic development.
The bank's functioning is governed by the State Bank of India Act, 1955, with Section 3(1) establishing it as a body corporate with perpetual succession and a common seal. A key mechanism is outlined in Section 45, which mandates the SBI to act as an agent of the Reserve Bank of India (RBI) in places where the RBI does not have a branch. Historically, SBI was connected to the State Bank of India (Subsidiary Banks) Act, 1959, which allowed it to take over certain state-associated banks. This structure was significantly changed when the State Bank of India (Subsidiary Banks) Act, 1959, was repealed. The five associate banks—State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore—along with the Bharatiya Mahila Bank, were merged into SBI, effective April 1, 2017. This consolidation was facilitated by amendments to the State Bank of India Act, 1955, and resulted in a single, larger entity.