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.
Accordingly, it renders the following functions:
(a) Banker to the government
(b) Banker to banks in a limited way
(c) Maintenance of currency chest
(d) Acts as clearing house
(e) Renders promotional functions
(1) Banker to the Government:
The SBI functions as the banker to the central and state governments. It
receives and pays money on behalf of the governments. Especially it renders
the following functions as directed by the RBI in this regard.
(a) Collection of charges on behalf of the government e.g. collection of tax and
other payments
(b) Grants loans and advances to the governments
(c) provides advises to the government regarding economic conditions, etc.,
(2) Banker's Bank:
Commercial Banks have accounts with SBI. When the banks face financial
shortage, the SBI provides assistance to them as it is considered a big brother in
the banking industry. It discounts the bills of the other commercial banks. Due
to the functions on this line the SBI is considered in a limited sense as the
banker's bank.
(3) Currency Chest:
The RBI maintains currency chests at its own offices. But RBI Offices 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 money at
currency chests with SBI.
Whenever needs arise, the currency is withdrawn from these chests under
proper accounting and reporting to RBI. Presently RBI entrust currency chest to
other Public Sector Banks and a few Private Sector Banks also.
(4) Acts as Clearing House:

In all the places, where RBI has no branch, the SBI renders the functions of
clearing house. Thus, it facilitates the inter bank settlements. Since, all the
banks in such places have accounts with SBI; it is easy for the SBI, to act as
clearing house.
(5) Renders Promotional Functions:
State Bank of India also renders various promotional functions. It provides
various facilities to the following priority sectors:
(i) Agriculture
(ii) Small - Scale Industries
(iii) Weaker sections of the society
(iv) Co-operative sectors
(v) Small - traders
(vi) Unemployed Youth
(vii) Others.
In this respect SBI is like any other commercial bank.
B. General Banking Functions
Besides the above specialized functions, the SBI renders the following
functions under Section 33 of the Act.
1. Accepting deposits from the public under current, savings, fixed and
recurring deposit accounts.
2. Advancing and lending money and opening cash credits upon the security of
stocks, securities, etc.
3. Drawing, accepting, discounting, buying and selling of bills of exchange and
other negotiable instruments.
4. Investing funds, in specified kinds of securities.
5. Advancing and lending money to court of wards with the previous approval
of State Government.
6. Issuing and circulating letters of credit.
7. Offering remittance facilities such as, demand drafts, mail transfers
telegraphic transfers, etc.
8. Acting as administrator, executor, trustee or otherwise.
9. Selling and realizing the movable or immovable properties that come into the
banks in satisfaction of claims.

10. Transacting pecuniary agency business on commission stocks.

11. Underwriting of the issue of authorized shares debentures, and other
securities. (This function is done through subsidiaries now)
12. Buying and selling of gold and silver.
13. It operates Public Provident Fund Accounts for the general public.
14. It operates Non-Resident External Accounts and Foreign Currency
Accounts.
15. Providing Factoring service (through subsidiaries).
16. Provides shipping finance.
17. Promotes Export through Export Credit. Provides Project Export Finance.
18. Provides Merchant Banking Facilities.
19. Provides specialized services like "Global Link Services ".
20. Promotes housing finance through "SBI Home Finance Ltd ".
21. Offers community services Banking. It provides grants to many socially
relevant research projects undertaken by various universities and academic
institutions in the country.
22. Provides Leasing Finance and Project Finance Facilities.
23. Participates in Lead Bank Scheme.
24. The State Bank may with the sanction of the Central Government, enter into
negotiations for acquiring the business of any other Banking Institutions.