Lok Sabha passes State Banks (Repeal and Amendment) Bill, 2017

The Lok Sabha has passed the State Banks (Repeal and Amendment) Bill, 2017. The bill seeks to repeal the two Acts namely State Bank of India (Subsidiary Banks) Act, 1959, and State Bank of Hyderabad Act, 1956.
It also seeks to amend the State Bank of India (SBI) Act, 1955 to remove references to subsidiary banks and powers of SBI to act as an agent of the RBI for subsidiary banks.

Key Facts

Repealing of SBI (Subsidiary Banks) Act and State Bank of Hyderabad Act: These two acts have established the State Bank of Bikaner, State Bank of Patiala, State Bank of Mysore, State Bank of Hyderabad and State Bank of Travancore.  These banks were subsidiaries of the SB). This repealing of two acts is consequent to the decision of the Union Cabinet February 2017 to approve merger of five subsidiary banks of SBI were merged with it.
Amendments to the SBI Act: The Bill removes references related to subsidiary banks from the parent Act. These references include the definition of a subsidiary bank and powers of SBI to act as an agent of the RBI for subsidiary banks.


The Union Cabinet had approved the merger of five associate banks along with Bharatiya Mahila Bank with SBI. The five banks were State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala. After the acquisition by SBI, the subsidiaries banks have ceased to exist and, therefore, it was necessary to repeal the two Acts. The merger had made State Bank of India one of the 50 biggest banks of the world. The main motive behind the merger was to increase the capital base of the bank to enable it to disburse more loans.



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