The functions of SBI can be grouped under two categories, viz., the Central Banking functions and ordinary banking functions. A. Central Banking Functions:
The SBI acts as agent of the RBI at the places where the RBI has no branch. ccordingly, it renders the following functions! (a) Banker (a) Banker to the govern"ent (b) Banker (b) Banker to banks in a li"ited way (c) #aintenance (c) #aintenance of currency chest (d) cts (d) cts as clearing house (e) Renders (e) Renders pro"otional functions (1) Banker to the Government: The SBI functions as the banker to the central and state govern"ents. It receives and pays "oney on behalf of the govern"ents. $specially it renders the following functions as directed by the RBI in this regard. %a& Collection of charges on behalf of the govern"ent e.g. collection of ta' and other pay"ents %b& (rants loans and advances to the govern"ents %c& provides advises to the govern"ent regarding econo"ic conditions, etc., (2) Banker's Bank:
Co""ercial Banks have accounts with SBI. )hen the banks face financial shortage, the SBI provides assistance to the" as it is considered a big brother in the banking industry. It discounts the bills of the other co""ercial banks. *ue to the functions on this line the SBI is considered in a li"ited sense as the banker+s bank. (3) Currency Chest:
The RBI "aintains currency chests at its own offices. But RBI f fices are situated only in big cities. SBI, buy its wide network of branches operate in urban as well as rural areas. RBI therefore, in such places keeps "oney at currency chests with SBI. )henever needs arise, the currency is withdrawn fro" these chests under proper accounting and reporting to RBI. -resently RBI RBI entrust currency chest to other -ublic Sector Banks and a few -rivate Sector Banks also. () Acts as Clearing !ouse:
In all the places, where RBI has no branch, the SBI renders the functions of clearing house. Thus, it facilitates the inter bank settle"ents. Since, all the banks in such places have accounts with SBI it is easy for the SBI, to act as clearing house. (") #en$ers %romotional Functions:
State Bank of India also renders various pro"otional functions. It provides various facilities to the following priority sectors! %i& griculture (ii) S"all / Scale Industries (iii) )eaker sections of the society (iv) Co/operative sectors (v) S"all / traders (vi) 0ne"ployed 1outh (vii) thers. In this respect SBI is like any other co""ercial bank. B. General Banking Functions
Besides the above specialized functions, the SBI renders the following functions under Section 22 of the ct. 3. ccepting deposits fro" the public under current, savings, fi'ed and recurring deposit accounts. 4. dvancing and lending "oney and opening cash credits upon the security of stocks, securities, etc. 2. *rawing, accepting, discounting, buying and selling of bills of e'change and other negotiable instru"ents. 5. Investing funds, in specified kinds of securities. 6. dvancing and lending "oney to court of wards with the previous approval of State (overn"ent. 7. Issuing and circulating letters of credit. 8. ffering re"ittance facilities such as, de"and drafts, "ail transfers telegraphic transfers, etc. 9. cting as ad"inistrator, e'ecutor, trustee or otherwise. :. Selling and realizing the "ovable or i""ovable properties that co"e into the banks in satisfaction of clai"s.
3;. Transacting pecuniary agency business on co""ission stocks. 33. 0nderwriting of the issue of authorized shares debentures, and other securities. %This function is done through subsidiaries now& 34. Buying and selling of gold and silver. 32. It operates -ublic -rovident
ect $'port ects undertaken by various universities and acade"ic institutions in the country. 44. -rovides @easing ect
