AN ANALYSIS OF THE ROLE OF STATE BANK CREDIT IN DEVELOPMENT OF AGRICULTURAL AND INDUSTRIAL SECTORS WITH SPECIAL REFERENCE OF BIHAR

“The State Bank of India was formed on 1 July, 1955, with the passing of the State Bank of India Act, 1955, by taking over the assets and liabilities of the Imperial Bank of India. The Imperial Bank of India was established in 1921 through the amalgamation of three Presidency Banks of Madras, Bombay and Bengal. It was the biggest bank between 1921 and 1935. It remained a special bank with powers and privileges that were not enjoyed by the other commercial banks in the country. The Imperial Bank is concerned it performed both the functions of commercial banking and central banking in the country. The establishment of the Reserve Bank of India in 1935, brought changes in the status and working of the Imperial Bank. It ceased to function as the government banker. The ban on certain commercial banking functions on it was removed. It was appointed as the agent of the Reserve Bank of India and authorized to transact government banking business at places where the Reserve Bank had no office of its own. Beside this, the Imperial Bank was permitted on behalf of the government to pay, receive, collect and remit money on behalf of the Reserve Bank. So, it kept a special position in the banking sector. There was a clamour for nationalisation of the Imperial Bank for better services to the nation. As a result of this, in 1948, the government accepted the policy of nationalisation of the Imperial Bank. However it was postponed indefinitely in 1949. The All India Rural Credit Survey Committee recommended the creation of a State Bank of India by amalgamating certain State owned banks with Imperial Bank. Accordingly, the State Bank of India Act was passed on May 8, 1955 and the State Bank of India came into existence on 1st July, 1955 in the country.”