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.

RELATED TERMS
  1. National Bank

    In the United States, a commercial bank chartered by the comptroller ...
  2. Dual Banking System

    The system of banking that exists in the United States in which ...
  3. Office Of The Comptroller Of The ...

    A U.S. federal agency that serves to charter, regulate and supervise ...
  4. Bank Insurance

    A guarantee by the Federal Deposit Insurance Corporation (FDIC) ...
  5. Bankers' Bank

    A special type of bank that is created by a group of banks. Bankers' ...
  6. Universal Banking

    A banking system in which banks provide a wide variety of financial ...
Related Articles
  1. Insights

    A Brief History of U.S. Banking Regulation

    From the establishment of the First Bank of the United States to Dodd-Frank, American banking regulation has followed the path of a swinging pendulum.
  2. Personal Finance

    What Does a Central Bank Do?

    A central bank oversees a nation’s monetary system.
  3. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  4. Insights

    What Are Central Banks?

    They print money, they control inflation, and much, much more. All you need to know about central banks is here.
  5. Insurance

    Insurance Companies Vs. Banks: Separate And Not Equal

    Insurance companies and banks are both financial intermediaries. However, they don't always face the same risks and are regulated by different authorities.
  6. Trading

    Explaining the Federal Reserve System

    The Federal Reserve System is the central bank of the United States. It regulates monetary policy and supervises the nation’s banking system.
  7. Personal Finance

    What's the Federal Funds Rate?

    The federal funds rate is the interest rate banks charge each other for overnight loans to meet their reserve requirements.
  8. Investing

    How Do Financial Regulations Affect Smaller Banks?

    Not to big to fail? We explain how US financial regulations affect smaller banks.
RELATED FAQS
  1. How does investment banking differ from commercial banking?

    Discover how investment banking differs from commercial banking, the responsibilities of each and how the two can be combined ... Read Answer >>
  2. What's the difference between investment banks and commercial banks?

    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ... Read Answer >>
  3. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  4. How are bank reserve requirements determined and how does this affect shareholders?

    Learn how bank reserve requirements are determined and how bank reserves affect shareholders through improved bank stability ... Read Answer >>
  5. What is the average profit margin for a company in the banking sector?

    Learn what the average profit margin is for companies in the banking sector, along with other evaluation metrics often used ... Read Answer >>
  6. What developed countries have the highest concentration in the banking sector?

    Learn about the developed countries that have the greatest concentration in the banking sector and the most important emerging ... Read Answer >>
Trading Center