The state bank of India act 1955 is a central government act through central government notification in the official gazette. The act contains 57 sections it states various functions and relevant provisions that the functions are subject to according to the act. The purpose for the commencement of the act is to transfer the undertakings of the imperial bank of India act 1920.
Sections 1 deal with the preliminary chapter. In chapter 2 the definition clause defines central board, goods, imperial bank, Reserve bank, state bank, etc and other related expressions from 2(a)-2 (j). Section 3 deals with the establishment of bank for carry on the banking business purpose and section 4 deals with the authorized capital of state bank up to 20 crores. The capital can be deducted or increased as per the central government authorization. The issued capital is mentioned in section 5.
Section 6 is an important section with sub clauses related to the transfer of assets and liabilities of the imperial bank to the state bank. Any suit or legal proceedings according to the imperial act before the commencement of the act of 1955 shall not abate or discontinued by virtue of section 6. Section 7 prescribes the mode of transfer of employees of imperial bank to the state bank and Section 8 states the benefits to the employees including provident, pension, gratuity are provided to them by way of trustees as per the central government’s special or general order. The part of share holders are dealt with sections 9-13. compensation for the share holders are stated in section 9, transferability of shares, restrictions on voting rights, shares regarded as securities, register of share holders are explained from section 10-13. On registration of share holders the name, address the number of shares allotted are recorded in the register and kept in the central office. As per section 15 trusts are not entered as share holders. Section 16 deals with offices and branches with central offices in Calcutta, Bombay and Madras. Section 17 says about the management with central board. Section 18 defines the central board of management should follow the guide lines from the central government. Section 19 dealt with the structure of central board with chairman and section deals with tenure of chairman, managing director and the central board members. Section 21 and its sub clauses deals with local board , its committee, term of members, power of local boards etc. section 22 says the disqualification of members in the board or local committee, section 23 and section 24 deals with the vacation of office directors and removal of directors. Casual vacancies, remuneration of directors, powers and remuneration of the chairman, powers and remuneration of vice chair chairman, powers and remuneration of managing directors are detailed from section 25 to section 29. Executives and other committees are dealt in section 30 and 31. Section 32 is an important section which empowers the state bank to act as an agent of Reserve bank in any state where reserve bank has branches. Section 35 states acquisition of business of other banks by the state bank of India. Section 36 deals with the integration and development fund as the resource of the bank. The reserve fund of the bank and the disposal of the profits of the bank is dealt in section 37 and 38.
The returns of any bank is crucial to a banking business and it is stated in section 40, timely auditing and preparation of balance sheets are specified in section 41 and 42. The appointment of officers is stated in section 43. Indeminity of directors, members, local board and local committees are stated in section 46.The power of central government to make rules are stated in section 49. Power to make regulations by the central board is given in section 50. Section 56 deals with the references to the imperial bank, bank of Bengal .section 57 deals with the dissolution of the imperial bank under the central government notification and by the substitution of the state bank of India act 1955.