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Banking Awareness is considered to be the high scoring section in any competitive exam. It includes two main portions, current affairs GK and static GK. In this article, we will discuss some really important Banking Awareness topics that are covered in almost all competitive exams. Also, you can download the PDF of lists of different Banking Awareness topics.
In Banking Section, the questions are asked from following topics: History of Banking, banking terms, Marketing of Banking Products, Functions of Banks, Banks and their taglines, schemes, committees related to banking, headquarters of bank, some Banking news related, apps launched by banks, new schemes etc.
In a series of sharing useful study material for upcoming banking exams. Here, we are providing Banking Awareness notes for all banking Exams (IBPS, SBI & Other Banking Exams).
Banking Awareness Study Notes on Banking Regulation Act, 1949
What is banking regulation act 1949?
The Banking Regulation act 1949 is a legislation in India, that states all banking firms will be regulated under this act. There are a total of 55 Sections under the banking regulating act. Initially the law was only applicable to banks, but after 1965, it was amended to make it applicable to co-operative banks and also to introduce other changes. The act provides a framework that regulates and supervises commercial banks in India. This act gives power to the RBI to exercise control and regulate banks under supervision.
Introduction of banking regulation act 1949
The act came into force on March 16 th 1949. It relates to various aspects vis-a-vis banking in India. The main objective of the banking regulation act is to ensure sound banking through regulations covering the opening of branches and the maintenance of liquid assets.
History of Banking Regulation Act 1949
Banking in India originated in the last decades of the 18 th century. Prior to Nationalization, the majority of the banks were private banks. Private Banks were class based and there would be monopolies that would only benefit a few people. With the nationalization of the banks, the credit scenario changes benefitted all Sections of society and contributed to overall prosperity. The Indian government recognized the need to bring the banks under some form of government control, to be able to finance India’s growing financial needs. On 19 th July 1969, 14 major Indian commercial banks of the country were nationalized. After independence, the Government of India came up with the Banking Companies Act, 1949, later changed to Banking Regulation Act 1949 as per the amending Act of 1965, under which the Reserve Bank of India was bestowed with extensive powers for the supervision of banking in India as the central banking authority.
Objectives of Banking Regulation Act 1949
- The provision of the Indian Companies Act 1913 was found inadequate and unsatisfactory to regulate banking companies in India. Therefore a need was felt to have a specific legislation having comprehensive coverage on banking business in India.
- Due to inadequacy of capital many banks failed and hence prescribing a minimum capital requirement was felt necessary. The banking regulation act brought in certain minimum capital requirements for banks.
- One of the key objectives of this act was to avoid cut throat competition among banking companies. The act was regulated the opening of branches and changing location of existing branches.
- To prevent indiscriminate opening of new branches and ensure balanced development of banking companies by system of licensing.
- Assign power to RBI to appoint, reappoint and removal of chairman, director and officers of the banks. This could ensure the smooth and efficient functioning of banks in India.
- To protect the interest of depositors and public at large by incorporating certain provisions, viz. prescribing cash reserve and liquidity reserve ratios. This enable bank to meet demand depositors.
- Provider compulsory amalgamation of weaker banks with senior banks, and thereby strengthens the banking system in India.
- Introduce few provisions to restrict foreign banks in investing funds of Indian depositors outside India.
- Provide quick and easy liquidation of banks when they are unable to continue further or amalgamate with other banks.
