The SBI took over the assets and liabilities of the Imperial Bank. The bank has an authorized capital of Rs.200 crore which is divided into shares of Rs.100 each and an issued capital of Rs.56.25 crore.
The shares of the Imperial Bank were transferred to RBI and the shareholders were paid a compensation of Rs.1765 for each fully paid shares and Rs.431 for each partly paid share.
It was paid in cash up to Rs.l0, 000 and beyond this amount, the compensation was paid in 3 Vi % Government bonds repayable in 1965. The shareholders were also given the option of taking up the shares in the SBI in lieu of the compensation at the rate of Rs.350 per share of the paid-up value of Rs. 100.
It should be noted, that the nationalization of the State Bank does not involve the transfer of the entire share capital to the Government. The shares are as a matter of fact held by the RBI. Further, there is a provision for ordinary shareholders to hold share capital up to 45%. That is, only the controlling interest is held by the RBI.