[2][3] In late 1932, the NSW Government led by Assistant Treasurer Eric Spooner introduced legislation to reconstitute what remained of the Government Savings Bank into a new "Rural Bank of New South Wales", with a specific mandate to support primary industries and not to operate as a traditional general lending bank, governed by a board of three commissioners.

[11][12][13] On this change, the Premier of NSW, Jim McGirr, commented: "The primary object of this important legislation is to widen the scope of the bank's functions in order to place it on an equal footing with other banks in this State.

The measure is in accordance with the Government's policy of fostering an institution that has in the past provided a valuable service to the people and has assisted in implementing various governmental schemes.

For instance, if a customer thought he or she had been charged a fee unfairly, the branch staff had the delegation to make an assessment and waive the fee if the circumstances warranted.As the 1980s progressed, the State Bank's stewardship changed and the business transformation accelerated.

The bank's balance sheet became more highly leveraged, profitability became the key driver, and customer service standards started to decline.