DEFINITION of 'State Bank'

A financial institution that has been chartered by a state to provide commercial banking. A state bank is not the same as a central or reserve bank because those banks are primarily concerned with influencing a government's monetary policy. In the United States, state banks are not regulated by the Office of the Comptroller of the Currency (OCC) which is the federal agency that oversees banks that operate nationally. Some state banks are regulated by the Federal Reserve, and those that are not are regulated by the Federal Deposit Insurance Corporation (FDIC).

BREAKING DOWN 'State Bank'

State banks can still be large financial institutions. They are not permitted to expand nationwide because they do not have a federal charter. State banks may be able to provide more nationwide services, such as ATMs, by partnering with banks with a broader presence around the country. In certain states, state banks have more authority than national banks in providing insurance and investment banking services.

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