State Bank of india

State Bank and its subsidiaries
State Bank and its subsidiaries, as Nationalised banks, are commercial banks engaged in the business of banking and other forms of business permissible for banking companies.
State Bank Of India was established under Section 3 of the State Bank Of India Act, 1955 for taking over the undertaking of the Imperial Bank Of India. The majority of shares are held by Reserve Bank. Although shares are freely transferable, the Reserve Bank cannot transfer the shares if such transfer would result in reducing its holding below 50% of the issued capital. No shareholder other than Reserve Bank can exercise voting rights above 10%.
The chairman and Managing Director are appointed for a period not exceeding 5 years and are eligible for reappointment. Their services can be terminated by the Central Govt. by giving 3 months notice or notice pay in lieu thereof after consultation with the Reserve Bank.
The State Bank and its subsidiaries and the Nationalised banks also act as agents of the Reserve Bank to transact the banking business of the Central Government.
Subsidiary Banks
SBH State Bank of Hyderabad Act, 1956
SBS Saurashtra State banks(amalgamation) Ordinance, 1950
All other banks State Bank Of India (Subsidiary Banks) Act, 1959
The majority of shares are held by State Bank Of India. Shares are freely transferable as provided in Section 18 of the Act, However State Bank is not entitled to transfer the shares if such transfer would result in reducing its shareholding to less than 50%.
Management of Subsidiary Bank
The Board consists of Chairman of the State Bank (ex-officio chairman), Managing Director and other directors. The state bank appoints Managing Director after consulting the board of subsidiary bank and with the approval of Reserve Bank.
Business of Subsidiary Bank
A subsidiary bank has to act as a agent of State Bank under Section 36 of the SBI Subsidiary Act.

Accounting & Finance for Banking

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