State Bank of India Objective Type Questions (1 Mark)

Question 1.
The head office of State Bank of India is in:
(a) Calcutta
(b) Delhi
(c) Mumbai
(d) Agra
Answer:
(c) Mumbai

Question 2.
Prior to the State Bank of India coming into being it was known as:
(a) Central Bank of India
(b) State Bank of India
(c) Reserve Bank of India
(d) Imperial Bank of India
Answer:
(d) Imperial Bank of India

Question 3.
State Bank of India came into existence on:
(a) 1st July 1955
(b) 1st April 1955
(c) 1st June 1955
(d) 1st Sept 1955
Answer:
(b) 1st April 1955

Question 4.
State Bank can grant loans to industries against their assets for a period of…….. years.
(a) 7
(b) 8
(c) 9
(d) 10
Answer:
(a) 7

Question 5.
There are ………….. Regional Offices of State Bank of India:
(a) 10
(b) 11
(c) 12
(d) 13
Answer:
(c) 12

State Bank of India Definite Answer Type Questions (1 Mark)

Question 1.
What was the name of State Bank of India before the nationalisation?
Answer:
Imperial Bank.

Question 2.
In which year the State Bank of India was established?
Answer:
1st July 1955.

State Bank of India Very Short Answer Type Questions (2 Marks)

Question 1.
Give two functions of State Bank of India.
Answer:
Functions of State Bank of India are as follows:

• It collects money from the public on behalf of the Government and also makes payments in accordance with its instructions.
• The Bank also manages the public debt of the Central and the State Governments.

Question 2.
Give two prohibited functions of State Bank of India.
Answer:
Prohibited Functions of State Bank of India:

• The State Bank of India cannot re-discount those bills which do not carry at least two signatures of reputable persons.
• The State Bank of India can neither discount bills nor extend credit to individuals or firms above the sanctioned limit.

State Bank of India Short Answer Type Questions (4 Marks)

Question 1.
Give the main achievement of State Bank of India.
Answer:
Achievement of State Bank of India are as follows:

• The major credit for the development of banking facilities in the country during the past few years belongs to the State Bank of India.
• The capital and other reserves of the State Bank of India was more than 1000 crores in the year 1990-91.
• The State Bank of India group has rendered a valuable service by opening most of its branches in rural areas of the country. More than 75% of branches are in rural areas and small towns.
• The number of villages adopted by the bank stood at 56,405 with a quantum of credit to the tune of Rs. 905 crores covering 23.6 lacs farmers in 1984.
• The State Bank of India opened agricultural development branches with adequate technical expertise to help the farmers for agricultural development. The number of such branches stood at 432 by the end of 1984 with outstanding advances amounting to Rs. 641 crores covering 16.8 lacs farmers.
• By the end of 1984, the bank’s advances to landless labourers, tenant farmers and sharecroppers accounted for 38% of the bank’s direct agricultural advance.
• The bank had advanced a sum of Rs. 1,737 crores to 4.7 lacs small scale industrial establishments up to Dec. 31, 1984.

Question 2.
What are the functions of the State Bank of India as a Commercial Bank?
Answer:
The functions of the State Bank of India as a Commercial Bank are as follows:

• The advancing and lending of money and opening of Cash Credit Account.
• Providing credit facilities for trade, industries and commerce of the country.
• Promotion of savings in rural areas.
• Providing facilities to Rural Credit Commission, co-operative selling and for godowns.
• The receiving of deposits and keeping cash account.
• The buying and selling of gold.
• The receiving of all kinds of bonds, scripts, title deeds or valuables for safe custody.
• The drawing, accepting, discounting, buying, selling of bills of exchange and other negotiable securities.

State Bank of India Long Answer Type Questions (8 Marks)

Question 1.
Discuss the objectives and achievements of the State Bank of India. (UP 2008, 09, 13, 15)
Or
Describe the objectives of the establishment and functions of the State Bank of India. (UP 2011)
Answer:
Objectives of State Bank of India. The State Bank of India was started with the following objectives:

1. To establish a strong banking network, so as to serve the people of the country more efficiently.
2. To provide adequate banking facilities to rural people, because there were negligible banking facilities in villages.
3. To provide more and convenient credit facilities for the agricultural sector.
4. To provide financial assistance to small scale sector for their development, so that the overall economy of the country also improves.
5. To encourage and mobilize small savings and to develop a habit of thrift among villagers and people of small and low-income group.
6. To provide financial assistance to warehousing schemes for more storage facilities for agricultural products.
7. To give necessary financial assistance to the weaker sections of the society, so that they become self-supporting and contribute to the economic prosperity of the country.
8. To help in the transfer of funds from one place to another as per the requirements of different agencies.
9. To assist the Reserve Bank of India in implementing the monetary and credit policies in the country.

Achievements of State Bank of India: Following are the achievements of State Bank of India:

1. The major credit for the development of banking facilities in the country during the past few years belongs to the State Bank of India. In 1993, the total.number of branches of the State Bank of India was 8,738 and that of subsidiary banks 4,317. The total number of branches of the State Bank of India group was thus 13055 in 1993.
2. The capital and other reserves of the State Bank of India was more than 1000 crores in the year 1990-91.
3. The State Bank of India group has rendered a valuable service by opening most of its branches in rural areas of the country. More than 75% of branches are in rural areas and small towns.
4. The number of villages adopted by the bank stood at 56,405 with a quantum of credit to the tune of Rs. 905 crores covering 23.6 lacs farmers in 1984.
5. The State Bank of India opened agricultural development branches with adequate technical expertise to help the farmers for agricultural development. The number of such branches stood at 432 by the end of 1984 with outstanding advances amounting to Rs. 641 crores covering 16.8 lacs farmers.
6. By the end of 1984, the bank’s advances to landless labourers, tenant farmers, and sharecroppers accounted for 38% of the bank’s direct agricultural advance.
7. The bank had advanced a sum of Rs. 1,737 crores to 4.7 lacs small scale industrial establishments up to Dec. 31, 1984.
8. The State Bank has also extended credit to the weaker sections of the community like tribals, Harijans, persons who are socially handicapped, and disabled, orphans, slum dwellers etc. By the end of 1984, the bank had assisted 3.1 lakh persons under various innovative banking schemes and the total outstanding stood at Rs. 33 crores.

From the above discussion, it is clear that the establishment of the State Bank of India was an important event in the history of Indian banking. State Bank of India has helped in overcoming the problem of rural credit to a certain extent. With over 13,000 branches, it is evident that the State Bank of India has become a powerful organisation in the Indian banking system besides having offices even in other countries like America and Germany.

The State Bank of India has helped a lot in the prosperity of our rural areas by providing facilities for agriculturist, weaker sections of the society and cottage and small scale industries, etc. By opening its branches in rural areas it has developed the habit of saving among the residents of rural areas. Another important function of the State Bank of India is its functioning as an agent of the State Bank of India. In fact, it is very difficult for the Reserve Bank of India to open its branches in each and every place and so where there are no branches of Reserve Bank of India, the State Bank of India performs its functions. An eminent scholar has rightly remarked, “If the Reserve Bank of India is the garden of our banking system, the State Bank of India is its Gardner.”

Question 2.
Describe the functions of State Bank of India. (UP 2009, 17)
Answer:
State Bank, being a commercial bank, performs all the functions of a commercial bank. In those areas where Reserve Bank does not have its own branches, State Bank acts as the agent of Reserve Bank. In this manner, State Bank, besides functioning as a commercial bank, also performs certain central banking functions, which are as below:

1. It collects money from the public on behalf of the Government and also makes payments in accordance with its instructions.
2. The bank also manages public debts of the Central and the State Governments.
3. It receives deposits from the Commercial Banks and also gives loans to them on demand.
4. The State Bank of India re-discounts the bills of the Commercial Banks.
5. It also acts as the Clearing House.

The State Bank of India performs all the functions of a Commercial Bank. Besides these functions, the State Bank of India also provides facilities for improving rural credit. The functions of State Bank of India are:

1. The advancing and lending of money and opening of Cash Credit Account.
2. Providing credit facilities for trade, industries and commerce of the country.
3. Promotion of savings in rural areas.
4. Providing facilities of Rural Credit Commission, co-operative selling and for godowns.
5. The receiving of deposits and keeping cash account.
6. The buying and selling of gold.
7. The receiving of all kinds of bonds, scripts, title deeds and valuables for safe custody.
8. The drawings, accepting, discounting, buying, selling of Bills of Exchange and other negotiable securities.
9. The drawing of Bills of Exchange and granting of letters of credit payable out of India.
10. The borrowing of money for the purpose of the business of the State Bank of India and the giving of securities for money so borrowed.
11. Acting as an agent of any Co-operative Bank which is registered under the law in force.
12. The underwriting of the issue of any stocks, shares, debentures or other securities in which State Bank of India is authorised to invest its funds.
13. The buying of Bills of Exchange payable out of India, not exceeding 15 months in case of bills relating to the financing of seasonal agricultural operations and 6 months in any other case.