SSC
The State Bank of India (SBI) was formed from the Imperial Bank of India, under an Act of Parliament, in:
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Answer: Option C — 1955
Detailed Solution
The State Bank of India (SBI) was formed on 1 July 1955, when the Government of India took over the Imperial Bank of India under the State Bank of India Act, 1955. This is often described as the nationalisation of the Imperial Bank.
History of SBI:
Its origins go back to the three "Presidency Banks" set up in British India:
- Bank of Calcutta (1806), later renamed the Bank of Bengal (1809).
- Bank of Bombay (1840).
- Bank of Madras (1843).
- In 1921, these three banks were merged to form the Imperial Bank of India.
- The Imperial Bank acted as a banker to the government and performed some central banking functions until the Reserve Bank of India was set up in 1935.
The All India Rural Credit Survey Committee (1951-54), chaired by A. D. Gorwala, recommended the creation of a state-owned bank to expand banking in rural areas.
On its recommendation, the Imperial Bank of India was converted into the State Bank of India in 1955. The RBI held the majority of its shares at first.
In 1959, the State Bank of India (Subsidiary Banks) Act made eight state-associated banks (of former princely states) its subsidiaries.
About SBI today:
- It is India's largest bank by assets, deposits, branches and customers.
- Its headquarters (corporate centre) is in Mumbai.
- In 2017, its five associate banks (State Bank of Bikaner and Jaipur, Hyderabad, Mysore, Patiala and Travancore) and the Bharatiya Mahila Bank were merged with SBI.
- Arundhati Bhattacharya became the first woman chairperson of SBI in 2013.
Bank nationalisation in India:
- On 19 July 1969, the government of Indira Gandhi nationalised 14 major commercial banks.
- On 15 April 1980, six more banks were nationalised.
- The Reserve Bank of India itself was nationalised on 1 January 1949.
Why not the other options?
- ✗1949 is the year the RBI was nationalised.
- ✗1969 is the year 14 major banks were nationalised.
- ✗1921 is the year the Imperial Bank of India was formed.
Quick tip
Remember: SBI = formed 1 July 1955 from the Imperial Bank of India (Gorwala committee; Imperial Bank 1921 from the three Presidency Banks); RBI nationalised 1949; 14 banks nationalised 1969, 6 in 1980.
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Money, Banking & RBI — Preparation
This question tests your understanding of Money, Banking & RBI, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers money and its functions, the banking system in India, the Reserve Bank of India and monetary policy, policy tools such as the repo rate, reverse repo rate, CRR and SLR, bank nationalisation, types of banks, and payment systems such as NEFT, RTGS and UPI. Banking exams test this topic in depth. Questions often ask when the RBI was set up (1935, on the recommendation of the Hilton Young Commission), when it was nationalised (1949), what each policy rate means, and when major banks were nationalised (14 banks in 1969 and 6 in 1980). Current policy rates change often, so check the latest RBI announcements. Practise the money, banking and RBI questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.