State Bank of India, as Nationalized banks, are commercial banks having big role in the
business of banking and other forms of business permissible for banking companies.
State Bank Of India was established under Section 3 of the State Bank Of India Act, 1955 for
taking over the undertaking of the Imperial Bank Of India.
The majority of shares are held by Reserve Bank of India. Although shares are freely transferable, the Reserve Bank cannot transfer the shares if such transfer would result in reducing its holding below 50% of the issued capital. No shareholder other than Reserve Bank can exercise voting rights above 10%.
Also read Foreign Exchange Management Act (FEMA)1999
The chairman and Managing Director are appointed for a period not exceeding 5 years and are
eligible for reappointment. Their services can be terminated by the Central Govt. by giving 3
monthsโ notice or notice pay in lieu thereof after consultation with the Reserve Bank.
The State Bank and its subsidiaries and the Nationalised banks also act as agents of the Reserve
Bank to transact the banking business of the Central Government.
On 1st April 2017 five associate banks or subsidiaries bank of SBI merged with SBI and its make SBI 50th largest bank of world.
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