(1) A Bank to be called the State Bank of India shall be constituted to carry on the business of banking and other business in accordance with the provisions of this Act and for the purpose of taking over the undertaking of the Imperial Bank.
(2) The Reserve Bank, together with such other persons as may from time to time become shareholders in the State Bank in accordance with the provisions of this Act, shall, so long as they are shareholders in the State Bank, constitute a body corporate with perpetual succession and a common seal under the name of the State Bank of India, and shall sue and be sued in that name.
(3) The State Bank shall have power to acquire and hold property,whether movable or immovable, for the purposes for which it is constituted and to dispose of the same.
Subject to the provisions of this Act, the authorized capital of the State Bank shall be twenty crores of rupees divided into 1*[two crores] of fully paid-up shares of ten rupees each: Provided that the Central Government may increase or reduce the authorized capital as it thinks fit so however that the shares in all cases shall be fully paid-up shares of ten rupees each.
(1) The issued capital of the State Bank shall, on the appointed day, be five crores, sixty-two lakhs and fifty thousand rupees divided into five lakhs, sixty-two thousand and five hundred shares, all of which shall, on the appointed day, stand allotted to the Reserve Bank in lieu of the shares of the Imperial Bank 1*[transferred to and vested in it under section 6].
(2) The Central Board may from time to time increase the issued capital but no increase in the issued capital shall be made in such a manner that the Reserve Bank holds at any time less than fifty-five per cent of the issued capital of the State Bank.
(3) No increase in the issued capital beyond twelve crores and fifty lakhs of rupees shall be made under sub-section (2) without the previous sanction of the Central Government.
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