The legislature notified the State Banks (Repeal and Amendment) Act, 2018 with the object of repealing the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956. These two acts had established 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 SBI. By repealing these two acts, five subsidiary banks will be merged with SBI. The bill also seeks to amend 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.
Highlights of the amendments —
- definition of ‘Subsidiary Banks’ has been omitted from S. 2(h) of the Act.
- provisions relating to ‘Subsidiary Banks’ have been omitted under S. 18, S. 31, S. 31A and S. 32 of the Act.
- Section 36 — sub-section (2), clause (aa) has been omitted. It previously dealt with subsidies granted by the State Bank to a subsidiary bank with RBI’s approval.