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THE STATE BANK OF INDIA ACT, 1955

Title : THE STATE BANK OF INDIA ACT, 1955

Year : 1955



(1) 1*[The State Bank may appoint such number of officers, advisers and employees as it considers necessary or desirable for the efficient performance of its functions, and determine the terms and conditions of their appointment and service.

(2) The officers, advisers and employees of the State Bank shall exercise such powers and perform such duties 2*[as may, by general or special order, be] trusted or delegated to them by the
Central Board.]

43A. Bonus.-

(1) No. officer, adviser or other employee 3*[other than an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act 1965 (21 or 1965)] of the State Bank shall be entitled to be paid any bonus.

(2) No employee of the State Bank, being an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act, 1965,(21 of 1965.) shall be entitled to be paid any bonus except in accordance with the provisions of that Act.

(3) The provisions of this section shall have effect notwithstanding any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in any other provision of this Act or in the Industrial Disputes Act, 1947 (14 of
1947), or any other law for the time being in force or any practice, usage or custom or any contract, agreement, settlement, award or other instrument.]

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1. Ins. by Act 35 of 1964 s. 14, (w.e.f. 1-12-1964).

2. Subs. by Act 1 of 1984, s. 46, for certain words (w.e.f. 15-2-1984).

3. Ins. by Act 64 of 1984, s. 2.

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(1) The State Bank shall observe, except as otherwise required by law, the practices and usages customary among bankers, and, in particular, it shall not divulge any information relating to or to the affairs of its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the State Bank to divulge such information.

(2) Every director, member of a Local Board or of a Local
Committee, auditor, adviser, officer or other employee of the State
Bank shall, before entering upon his duties, make a declaration of fidelity and secrecy as in the form set out in the Second Schedule.



No provision of law relating to the winding up of companies shall apply to the State Bank, and the State Bank shall not be placed in liquidation save by order of the Central Government and in such manner as it may direct.



(1) Every director and every member of a Local Board or a Local Committee shall be indemnified by the State Bank against all losses and expenses incurred by him in or in relation to the discharge of his duties except such as are caused by his own willful act or default.

(2) Neither a director nor a member of a Local Board or a Local
Committee shall be responsible for any loss or expense caused to the State Bank by the insufficiency or deficiency of the value of or title to any property or security acquired or taken on behalf of the State Bank or by the insolvency or wrongful act of any customer or debtor or by anything done in or in relation to the execution of the duties of his office or otherwise than for his willful act or default.



(1) No act or proceeding of the Central Board or of a Local Board or a Local Committee shall be questioned on the ground merely of the existence of any vacancy or defect in the constitution of the Board or Committee, as the case may be.

(2) All acts done by any person acting in good faith as a director or as a member of a Local Board or of a Local Committee shall, notwithstanding that there was some defect in this appointment or qualifications, be as valid as if he was a director of the Central, Board or a member of the Local Board or the Local Board or the Local Committee, as the case may be.



Rep. by the State Bank of India (Amendment) Act, 1964 (35 of 1964), s. 15 (w.e.f. 1-2-1964).



(1) The Central Government, in consultation with the Reserve Bank, may, by notification in the Official Gazette, 1*[make rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provision of this Act].

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for-

(a) The procedure for the payment of compensation 2* under this Act;

(b) The determination of persons to whom the said compensation shall be payable in all cases, including cases where shares in the Imperial Bank have been held by more than one person, or where they have been transferred before the appointed day but the transfer has not been registered or where the shareholder is dead;

3*[(c) The manner of appointment of a director under clause
(ca) or clause (cb) 4*** of section 19, and all other matters connected therewith or incidental thereto.]

4*[(3)5*6* Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

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1. Subs. by Act 48 of 1973, s. 18q, for certain words (w.e.f. 31-12-
1973).

2. For the State Bank (Compensation on Imperial Bank Shares) Rules,1955. see Gazette of India, Extraordinary, Part II, Sec. 3 page1409.

3. Ins. by Act 48 of 1973, s. 18 (w.e.f. 31-12-1973).

4. Ins. by Act 1 of 1984, s. 47 (w.e.f. 15-12-1984).

5. Ins. by Act 66 of 1988, s. 17 (w.e.f. 30-12-1988).

6. Certain words Omitted by Act 3-6-1994, s. 19 (w.e.f. 15-10-1993).

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(1) The Central Board may, after consultation with the Reserve Bank and with the previous sanction of the Central Government 5*[,by notification in the official Gazette] make regulations, not inconsistent with this Act and the rules made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for--

(a) The nature of shares of the State Bank, the manner in which and the conditions subject to which shares may be held and transferred and generally all matters relating to the rights and duties of shareholders;

1*[(b) The maintenance of register of shareholders, and the particulars to be entered in such register in addition to those specified in section 13, the safeguards to be observed in the maintenance of register of shareholders on computer floppies or diskettes, the inspection and closure of the register of shareholders and all other matters connected therewith;]

(c) The holding and conduct of elections under this Act, including the allocation of elected directors to the various areas 2*[falling within the jurisdiction of each local head office] and the final determination of doubts or disputes regarding the qualifications of candidates for election or regarding the validity of elections;

3*[(ca) The determination of areas falling within the jurisdiction of each local head office;]

4*[(d) The powers, functions and duties of Local Boards and the restrictions, conditions or limitations, if any, subject to which they may be exercised or performed, the formation and constitution of Local Committees (including the number of members of any such Committee) and of committees of Local Boards, the powers, functions and duties of such Committees, the holding of meetings of Local Committees and committees of Local Boards and the conduct of business thereat;]

(e) The fees and allowances which may be paid to directors, or members of Local Boards or Local Committees for attending any meetings of the Central Board or of its committees or of the Local Boards or Local Committees, as the case may be, or for attending to any other work of the State Bank;

(f) The manner in which the business of the Central Board 6*[or of Local Boards] shall be transacted and the procedure to be followed at the meetings thereof;

(g) The formation of committees of the Central Board and the delegation of powers and functions of the Central Board to such committees and the conduct of business in such committees;

7* * * * *

(i) The manner in which general meetings shall be convened, the procedure to be followed thereat and the manner in which voting rights may be exercised;

(j) The holding of meetings of shareholders 8*** and the business to be transacted thereat;

(k) The manner in which notices may be served on behalf of the State Bank upon shareholders or other persons;

(l) The provision of seals for the State Bank and the manner and effect of their use;

(m) The conduct and defence of legal proceedings and the manner of signing pleadings;

(n) The duties and conduct of officers, other employees, advisers and agents of the State Bank;

9*[(o) The establishment and maintenance of superanuation pension, provident or other funds for the benefit of the employees of the State Bank or of the dependants of such employees or for the purposes of the State Bank, and the granting of superannuation allowances, annuities and pensions payable out of any such fund;]

(p) The form and manner in which contracts binding on the
State Bank may be executed;

10*[(q) The terms, conditions, stipulations, restrictions and limitations, if any, in the transaction by the State Bank of its businesses in regard to the advancing or lending of money or the discounting or purchase of any instrument, negotiable or otherwise, with or without reference to any security, purpose, amount, period or otherwise;]

(r) The conditions subject to which alone, advances may be made to directors, members of Local Boards or of Local Committees or officers of the State Bank, or the relatives of such directors, members or officers or to companies, firms or individuals with which or with whom such directors, members, officers, or relatives are connected as partners, directors, managers, servants, shareholders or otherwise;

(s) The statements, returns, and forms that are required for the purposes of this Act;

(t) The payment of dividends, including interim dividends;

(u) Generally for the conduct of the business of the State Bank.

11*[(2A) All regulations made under this section shall have effect from such earlier or late date as may be specified in the regulations.]

(3) Notwithstanding anything contained in this section, the first regulations shall be made by the Reserve Bank with the previous sanction of the Central Government, and thereupon shall be deemed to be the regulations made by the Central Board under this section and shall have force accordingly until they are amended or repealed.

12*[(4) Every regulation shall, as soon as may be after it is made under this Act by the Central Board, be forwarded to the Central
Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it is in session, for a total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.]

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1. Subs. by Act 3 of 1994, s. 20, for cl. (a) (w.e.f. 15-10-1993).

2. Subs. by S. 20, ibid. for certain words (w.e.f. 15-10-1993).

3. Ins. by s. 20 ibid. (w.e.f. 15-10-1993).

4. Subs. by Act 35 of 1964, s. 16, for cl. (d) (w.e.f. 1-12-1964).

5. Ins. by Act 35 of 1964, s. 16 (w.e.f. 1-12-1964).

6. Cl. (h) omitted by Act 35 of 1964, s. 16 (w.e.f. 1-12-1964).

7. Omitted by Act 3 of 1994, s. 20 (w.e.f. 15-10-1993).

8. Subs. by Act 26 of 1959, s. 10, for the former clause.

9. Subs. by Act 48 of 1973, s. 19, for clause (q) (w.e.f. 31-12-
1973).

10. Ins. by Act 48 of 1973, s. 19 (w.e.f. 31-12-1973).

11. Ins. by Act 1 of 1984, s. 48 (w.e.f. 15-2-1984).

12. Subs. by Act 33 of 1955, s. 5, for the original section (with retrospective effect).

13. Ins. by s. 6, ibid. (with retrospective effect).

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If, according to the laws of any country outside India, the provisions of this Act by themselves are not effective to transfer to and vest in the State Bank any asset or liability which forms part of the undertaking of the Imperial Bank and which is situate in that country, the Imperial Bank shall take all such steps as may be required by the laws of that country for the purpose of effecting or perfecting such transfer and vesting, and in connection therewith the Imperial Bank may realise any asset and discharge any liability and transfer the net proceeds thereof to the State Bank.]



Rep. by the Repealing and Amending Act, 1960 (58 of 1960), s. 2 and Sch. I.



Rep. by s. 2 and Sch. I, ibid.



Rep. by s. 2 and Sch. I ibid.



On and from the appointed day, no person shall make any claim or demand or take any proceeding in India against the Imperial Bank or a director, officer or other employee thereof in his capacity as such director, officer or employee except in so far as may be necessary for enforcing the provisions of this Act or except in so far as it relates to any offence committed by any such director, officer or employee.



On and from the appointed day, any reference to the Imperial Bank or to the Bank of Bengal, the Bank of Madras or the Bank of Bombay in any law (other than this Act or the Imperial Bank of India Act, 1920) (47 of 1920.) or in any contract or other instrument shall, except as otherwise provided in any general or special order made by the Central Government be deemed to be a reference to the State Bank.



(1) On such day as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Imperial Bank shall stand dissolved, and the Imperial Bank of India Act, 1920 (47 of 1920), shall stand repealed.

(2) On the day specified in the notification under sub-section (1), the State Bank shall pay to the Reserve Bank a sum of ten lakhs of rupees.

(3) If, on the day specified in the notification under sub-section (1), the Imperial Bank has in its possession or custody any assets created on or after the appointed day, such assets shall be disposed of in accordance with directions issued by the Central Government in this behalf.

Last updated on August, 2016

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