State Bank of India (SBI) - The Largest India Bank

If talked about the Indian banking and financial services company, State Bank of India, having its headquarters in Mumbai, commonly known as SBI, is the largest one considering its turnover and total assets. If the number of branches of the Banks is considered State Bank of India (SBI) is the largest Bank in the world. There are more than 16000 branches of State Bank of India inclusive of about 130 overseas branches. It has a vast range of banking products including products aimed at non-resident Indians (NRIs). As regards the reputation of State Bank of India, it is the 29th most reputed company in the world.

It is very interesting to know about the history of State Bank of India as SBI is the oldest commercial bank in the Indian Subcontinent and it traces its ancestry to British India. The roots of the State Bank of India go to 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 was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). These three banks amalgamated as Imperial Bank. The government of India nationalized the Imperial Bank of India in 1955 and renamed it the State Bank of India. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries.

SBI has following associate banks:

    * State Bank of Bikaner & Jaipur
    * State Bank of Hyderabad
    * State Bank of Mysore
    * State Bank of Patiala
    * State Bank of Travancore
    * State Bank of Saurashtra - merged with SBI in 2008.
    * State Bank of Indore - merged with SBI in 2010.

Banks in India after independence

Banking Sector in India reformed much after independence due to the major steps taken by Indian Government. To provide extensive banking facilities in rural and semi-urban areas, Imperial Bank was changed into State Bank of India and it became the first nationalised bank of India. Thereafter State bank of India started to act as the principal agent of Reserve Bank of India and to handle banking transactions of the Union and State Governments all over the country.

In 1960 seven subsidiary banks of State Bank of India were nationalised.

On 19th July, 1969, major process of nationalisation was carried out and 14 major commercial banks in the country were nationalised. Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with seven more banks. As a result 80% of the banking segment in India came under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949 : Enactment of Banking Regulation Act.
1955 : Nationalisation of State Bank of India.
1959 : Nationalisation of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalisation of 14 major banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalisation of seven banks with deposits over 200 crore.

Due to the nationalisation of banks, the branches of the public sector banks in India rose to approximately 800% in deposits whereas advances took a huge jump by 11,000%.

The nationalisation of the banks by Government of India gave the public implicit faith and immense confidence about the sustainability of these institutions.