History Of SBI: Everything You Need To Know - Optionable

December 15, 2021 by Vandana S · 6 min read


 SBI History- An Introduction

State bank of India is established as the biggest bank operational in India which has 23% of the market shares,  1/4th of the population’s deposits and loan market. It has over 44 crore customers, 22,000 branches spread across the globe, 58,500 ATMs, and 66,000 business correspondents (BC). 

SBI  has diversified its business through 5 non-banking subsidiaries namely SBI General Insurance, SBI mutual funds, SBI Cards and Payment Services Pvt. Ltd, SBI Life Insurance, and SBI Capital Markets.

The history of SBI goes back to the days of 1806 as the Bank of Calcutta. Three years into functioning it received a royal charter and was renamed as Bank of Bengal.

It was known as one of the Presidency banks, along with the Bank of Bombay (1840) and Bank of Madras (1843), as they jointly owned the private investors and provincial government funds. 

The history of SBI banks holds a strong 70 years of experience and heritage, the three banks were merged to form the Imperial Bank of India in 1921. This became the largest commercial bank in India.

After independence, in 1955, IBI was renamed as State Bank of India, and the ownership of SBI was held by the Government of India and Reserve Bank of India (RBI). 

Four years later, the State Bank of India (Subsidiary Act) was passed to merge all the subsidiaries operated by the princely states to become subsidiaries of SBI.

 SBI started acquiring the local banks. The first was the Bank of Bihar (1911), which SBI acquired in 1969 along with its 28 branches, followed by the acquisition of the Bank of Lahore. 

In 1975, it acquired Krishnaram Baldeo Bank which was established by Maharaja Madho Rao Scindia. In 1985, SBI acquired Bank of Cochin which has a huge spread of 120 branches.

Establishment And Growth- SBI

After over 5 decades RBI transferred the joint ownership to the Government of India wholly. After this transfer in 2007, SBI has invested its interest in the national economic development via rural development initiatives, financing industrial and agricultural ventures, via loans.

 In 2009, SBI took over the State Bank of Indore, which added 470 branches in the SBI belt. The first logo of SBI was established in 1955. It has a Banyan tree which symbolically means the bank has strong roots and is capable of growing globally.

The logo  had an upgrade in the year 1971. It was designed by Shekhar Kamat. The design consists of a blue circle with a small cut at the bottom. The interpretation of the logo symbolically means a keyhole where the treasures are kept safely. It shows safety, loyalty, and strength. Its major inspiration comes from the Allahabad city’s lake Kankaria Lake.

This huge network of banks needed a solid command and networking. The first move towards the unification of banks in India was made in the year 2008, where State Bank of Saurashtra merged with SBI, reducing the Associate banks from 7 to 6.

By 2018, all the associate banks were merged to form a single banking network- SBI. In 2013, Arundathi Battacharya became the first woman to be appointed as Chairman of SBI and received an extension of additional 2 years to ensure the merging of the banks function smoothly.

SBI established its name by venturing into different businesses namely, Pension funds, General Insurance, Private equity, Mobile Banking (YONO), Custodian Services, Advisory Services, and Merchant Acquisition. SBI is India’s first bank to be part of the prestigious Fortune 500 companies.

Apart from the banking activities and allied financial services, it is also part of nonprofit ventures since 1973 through Community Service Banks. (CBS) Through this CSB, SBI takes part in various initiatives and drives for the causes of social welfare development.

In the modern age of digitalization, SBI has developed two software’s to provide door-to-door facilities for loan procurement and opening of the bank account. Know your Customer (KYC) was also introduced to ensure the rates of fraudulent activities come down.

SBI is one of the largest banks in India and its journey of over 200 years has seen change, challenge, and confidence in building its name and customers.

Why Is SBI Famous?

SBI is considered to be the most trusted bank by its customers and is extremely popular in India by a study conducted by Brand Finance, a London based company in the year 2017.

Since it’s the largest government banking network, many of the farmers and lower income group communities have a zero balance account with SBI for loan grants and financial benefits granted by the government.

SBI is the first banking network which opened its branch in Jammu and Kashmir and has branches in many countries abroad as well. Since its presence is globally seen, its name, working, employee management and money management is noted by all.

It is one of the largest employers of India making it domestically aware amongst the people. Arundathi Battacharya, the first women chairperson of SBI in the year 2013, broke the record glass ceiling effect of women in the corporate world. She was listed as the 36th most influential person in Forbes in 2013. This move of SBI, made it extremely popular among women employees. 

SBI has a total of 26% of employees who are women. Each employee contributed a net profit of 828350 INR during FY 2020-21. 

What Is The Current Position Of SBI In India?

On September 3rd 2021, SBI had raised 4000 crores via Additional Tier 1 Bonds for a coupon rate of 7.2%. It was issued to a bank for the first time after its issue to SEBI. Additional Tier 1 bonds are also called perpetual bonds.

They don’t have a maturity date but have a call option attached to it for the issuer of the bonds. The issue can call back the bond money if they are getting money at a cheaper rate when the interest rates are falling.

It is currently ranked at 49th largest bank in the world in terms of assets worth 640.31 billion US dollars, first being Industrial and Commercial Bank of China with total assets worth 4324.27 billion US dollars.

SBI ranks 42nd in the world in terms of market capitalization with a market cap of 55.7 billion  US dollars. The first being JP Morgan Chase with 488.470 billion US dollars. HDFC bank ranks 10th with a market capitalization of 134.4 billion US dollars.

Importance Of SBI In India And Globally

SBI has helped in growing the Indian economy through many initiatives like rural development projects, MSME credit support, industrial and agricultural loan support and aiding the government needs financially.

It has assisted RBI in acquiring 48.2% YES Bank Shares as a part of a rescue deal in March 2020. This shows how SBI helps in regulating the financial system in India.


It is very clear that the history of SBI has been vast and emerging.It is one of the biggest financial systems in India and has been redefining the banking system norms over the course of 66 years. Its operation is spread globally and operates across different time zones working in 36 foreign countries spread across 208 offices.

Do let us know if you would be interested in investing in SBI stocks and work in the prestigious offices of SBI spread globally.