State Bank, being a commercial bank, performs all the functions of a commercial bank. In those areas where Reserve Bank does not have its own branches, State Bank acts as the agent of Reserve Bank. In this manner, State Bank, besides functioning as a commercial bank, also performs certain central banking functions, which are as below:

1. It collects money from the public on behalf of the Government and also makes payments in accordance with its instructions. 

2. The bank also manages public debts of the Central and the State Governments.

3. It receives deposits from the Commercial Banks and also gives loans to them on demand.

4. The State Bank of India re-discounts the bills of the Commercial Banks.

5. It also acts as the Clearing House.

The State Bank of India performs all the functions of a Commercial Bank. Besides these functions, the State Bank of India also provides facilities for improving rural credit. 

The functions of State Bank of India are: 

1. The advancing and lending of money and opening of Cash Credit Account. 

2. Providing credit facilities for trade, industries and commerce of the country. 

3. Promotion of savings in rural areas.

4. Providing facilities of Rural Credit Commission, co-operative selling and for godowns. 

5. The receiving of deposits and keeping cash account. 

6. The buying and selling of gold. 

7. The receiving of all kinds of bonds, scripts, title deeds and valuables for safe custody..

8. The drawings, accepting, discounting, buying, selling of Bills of Exchange and other negotiable securities. 

9. The drawing of Bills of Exchange and granting of letters of credit payable out of India. 

10. The borrowing of money for the purpose of the business of the State Bank of India and the giving of securities for money so borrowed. 

11. Acting as an agent of any Co-operative Bank which is registered under the law in force. 

12. The underwriting of the issue of any stocks, shares, debentures or other securities in which State Bank of India is authorised to invest its funds. 

13. The buying of Bills of Exchange payable out of India, not exceeding 15 months in case of bills relating to the financing of seasonal agricultural operations and 6 months in any other case.