The Banking Regulation Act was Passed in India in

By BYJU'S Exam Prep

Updated on: November 9th, 2023

The Banking Regulation Act was passed in India in 1949. The Banking Regulation Act was passed to manage and control all the banking firms in India. Earlier, this act was termed as Banking Companies Act 1949, but it changed to Banking Regulation Act 1949 on 1 March 1966. It came into force on 16th March 1949 and was applicable in Jammu and Kashmir from 1956.

Banking Regulation Act

All Indian banking institutions are subject to regulation under the Banking Regulation Act 1949. The Banking Companies Act of 1949 passed, went into effect on March 16, 1949, and was renamed the Banking Regulation Act of 1949 on March 1, 1966. Since 1956, it has been in effect in Jammu & Kashmir.

The rule initially exclusively applied to banking institutions. However, in 1965 it was changed to include cooperative banks and make other improvements. It was changed in 2020 to provide the Reserve Bank of India control over cooperative banks.

The Act offers a framework for the supervision and regulation of commercial banking in India. The Act adds to the 1956 Companies Act. The Act does not apply to cooperative land mortgage banks or the Primary Agricultural Credit Society.


In which year was the Banking Regulation Act passed?

On 16th March 1949, The Banking Regulation Act came into force and passed in the Parliament of India to regulate all banks. The Act grants the Reserve Bank of India (RBI) the authority to license banks, regulate shareholder holdings and voting rights, make instructions on banking policy and in the public interest, and levy fines. Simply put, the act offers a proper framework for the regulation and supervision of commercial banking in our country.

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