Banking Regulation Act of India, 1949 defines Banking as “accepting, for the purpose of lending or of investment of deposits of money from the public, repayable on demand or otherwise or withdrawable by cheque, draft order or otherwise.”
The Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949, govern the banking operations in India.
Banking Structure in India
- A well-regulated banking system is a key comfort for local and foreign stake-holders in any country. Prudent banking regulation is recognized as one of the reasons why India was less affected by the global financial crisis.
- Banks can be broadly categorized as Commercial Banks or Co-operative Banks.
- Banks which meet specific criteria are included in the second schedule of the RBI Act, 1934. These are called scheduled banks.