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Imperial Bank of India constituted on 27th January 1921

Imperial Bank of India constituted on 27th January 1921

th January 1921. Imperial Bank of India thus came into existence on the day, which was primarily a commercial bank. But due to the lack of a central bank, it worked also as one till the Reserve Bank of India was established in 1935. Soon after independence in 1955 Imperial bank was nationalized and was rechristened State Bank of India.

Constitution of Imperial Bank of India:

  • East India Company set up three banks- Bank of Bengal, Bombay, and Madras in 1806, 1840 and 1843 respectively. These three were the leading banking institutions at the time.
  • In 1921, these banks were merged and renamed as the Imperial Bank of India. It functioned as both a central and a commercial bank till 1935.
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  • After Independence it was realized that all commercial banks only function in urban areas. Moreover, they were not well equipped to deal with the rural economic revival. The rural churning was thus unaided by the support of the banking sector.
  • The All India Rural Credit Survey Committee recommended the necessity for a state partnered bank. This was needed to serve the economy in totality with special focus on rural areas. It thus recommended the take-over of the Imperial Bank of India and merging it with other state sponsored banks.
  • In 1955, through an Act of the Parliament, Imperial Bank was nationalized and State Bank of India (SBI) was born.
  • In the same year, 7 more banks were nationalized and converted into the associates of SBI. The State Bank of India (Subsidiary Banks) Act was passed by the Parliament in 1959-
  • State Bank of Hyderabad
  • State Bank of Travancore
  • State Bank of Bikaner and Jaipur
  • State Bank of Patiala
  • State Bank of Saurashtra
  • State Bank of Indore
All these associate banks have since been merged with SBI.]]>

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