RAS question
The State Bank of India was formed in 1955 by the nationalisation of which bank?
Correct answer: (A) Imperial Bank of India.
The State Bank of India was formed in 1955 when the Imperial Bank of India was nationalised and renamed.
Explanation
The bank to identify is the Imperial Bank of India, not another public-sector or early colonial bank. SBI came into being on 1 July 1955 under the State Bank of India Act, 1955, through the nationalisation of the Imperial Bank of India. Reserve Bank of India, RBI Working Paper Series No. 10 gives the institutional sequence: modern Indian banking reached a milestone in 1921 when the presidency banks were amalgamated to form the Imperial Bank of India, and in 1955 RBI acquired ownership of the Imperial Bank and it was renamed State Bank of India. That chain explains why the answer is Imperial Bank of India: SBI was not created as a fresh bank, but by taking over and renaming that existing institution.
Why the other options are wrong
- (B) Central Bank of India was a separate nationalised bank, while the 1955 formation of SBI came from the Imperial Bank of India.
- (C) Bank of Hindustan is linked to India's early banking history, but it had ceased operations long before the 1955 creation of SBI.
- (D) Bank of Bengal was one of the presidency-bank antecedents that merged into the Imperial Bank in 1921, so it was not directly nationalised to form SBI in 1955.
Concept
This tests the evolution of Indian banking institutions, especially the link between presidency banks, Imperial Bank of India and SBI. RAS repeats such questions because public-sector banking history is a standard factual anchor in Indian Economy.