The origins of the State Bank of India can be traced back two hundred years to the establishment of the Bank of Calcutta. The keen interest shown by the directors of the bank in maintaining records found an echo in 1975 when R.K. Talwar, a former chairman of the State Bank, commissioned an account of the bank's evolution from its earliest days.
Banking in those days was a far cry from what it is today-an unbiased, uniform system that has led to increased purchasing power across classes. At the time, even though the rupee was the unifying currency, there also existed a confusing array of coinage whose value could vary by the region. Besides the cowrie-sea shells brought in from ...view middle of the document...
This volume presents a panoramic view of their functioning till 1876, and through them the changes that were occurring in the trading environment and the economy. The Roots 1806-1876 is an integrated history of the development of banking, commerce, finance and industry in India, and of the people, from Ram Comul Sen, the dedicated khazanchee of the Bank of Bengal, to his petty-minded boss, George Udny, who guided its course.
The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921.
An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank.
The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned...