This article will provide you with information about Reforms in the Banking Sector in India. Various Indian Banking Reforms & Acts pre-and post-independence that are asked in the general awareness section of competitive exams along with the years they were implemented are given.
General awareness section is considered to be a high-scoring section in any competitive exam. Candidates preparing for the UPSC exam, Bank exams, Insurance exam, SSC exam or any other Government exam no need to remember any formulae or rules to ace this section. Just diligent preparation and wisely addressing the questions can give candidates an edge over the competitors for this section.
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Now, to help candidates prepare general awareness diligently for the exam, we have come up with the list of Banking Sector Reforms & Acts, a topic that has been asked and holds relevance in many competitive exams.
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Acts And Reforms In Banking Sector
As a part of the growing trend towards globalization and economic liberalization, various banking reforms and acts have been introduced in India to upgrade the health and financial soundness of banks and to improve the operation efficiency so that Indian banks can meet globally accepted performance standards.
List of Important Banking Reforms & Acts- Download PDF Here
The introduction of reforms in the banking sector was based on the commendations of different committees.
The committees that proposed the Banking sector reforms are as mentioned below:
- The first Narasimhan Committee- 1991
- The Verma Committee – 1996
- The Khan Committee – 1997
- The Second Narasimhan Committee – 1998
The reforms in the Banking Sector were done in two phases.
The first phase of the reform focused on improving the policy framework, institutional framework and financial health.
- Policy Framework improvement – this included deregulation of interest rates, reducing the Cash Reserve Ratio to the initial standard, phasing out Statutory Liquidity Ratio, widening the scope of priority sector lending by linking the lending rates to the size of advances.
- Institutional Framework improvement: this focused on recapitalization, strengthening the supervisory system and creating a competitive environment.
- To Improve the financial soundness of the banking sector certain prudent norms were prescribed and steps were taken to re-duct the proportion of NPAs.
The Second Phase of the banking sector reforms concentrates on reinforcing the very foundation of the banking system by rehabilitating the structure of the banking industry, development of human resources, and technological enhancements.
|Serial No.||Names of the Banking Acts and Reforms||Years|
|1.||Societies Registration Act||1860|
|2.||Negotiable Instrument Act||1881|
|3.||Indian Trusts Act||1882|
|4.||The Bankers’ Books Evidence Act||1891|
|5.||Indian Stamp Act||1899|
|6.||Co-operative Societies Act||1912|
|7.||Provident Funds Act||1925|
|8.||Indian Partnership Act||1934|
|9.||The Reserve Bank of India Act||1934|
|11.||Central Excise Act||1944|
|12.||Public Debt Act||1944|
|13.||International Monetary Fund and Bank Act||1945|
|14.||Employees’ State Insurance Act||1948|
|15.||The Industrial Finance Corporation of India Act||1948|
|16.||The Banking Companies (Legal Practitioner Clients’ Accounts) Act||1949|
|17.||The Industrial Disputes (Banking and Insurance Companies) Act||1949|
|18.||The Banking Regulation(Companies) Rules||1949|
|19.||The Banking Regulation Act||1949|
|20.||Chartered Accountants Act||1949|
|21.||Contingency Fund of India Act||1950|
|22.||The State Financial Corporations Act||1951|
|23.||Employees Provident Fund and Miscellaneous Provisions Act||1952|
|24.||The Reserve Bank of India (Amendment and Misc. Provisions) Act||1953|
|25.||The Industrial Disputes (Banking Companies) Decision Act||1955|
|26.||The State Bank of India Act||1955|
|27.||Life Insurance Corporation Act||1956|
|29.||Central Sales Tax Act||1956|
|30.||The State Bank of India (Subsidiary Banks) Act||1959|
|31.||The Subsidiary Banks General Regulation||1959|
|32.||The Deposit Insurance and Credit Guarantee Corporation Act||1961|
|34.||Unit Trust of India Act||1963|
|36.||Nationalization of Banks Act (However, the government decided to nationalize 14 major commercial banks on 19th July 1969)||1964|
|37.||Banking Laws (Application to Co-operative Societies) Act||1965|
|38.||Banking Companies (Acquisition and Transfer of Undertaking) Act||1969|
|39.||The Nationalized Banks (Management and Miscellaneous Provisions) Scheme||1970|
|40.||The Banking Companies (Acquisition and Transfer of Undertakings) Act||1970|
|41.||The Regional Rural Banks Act||1976|
|42.||Foreign Contribution (Regulation) Act||1976|
|43.||The Banking Companies (Acquisition and Transfer of Undertakings) Act||1980|
|44.||The Export-Import Bank of India Act||1981|
|45.||The National Bank for Agriculture and Rural Development Act||1981|
|46.||Chit Fund Act||1982|
|47.||Sick Industrial Companies (Special Provisions)Act||1985|
|48.||Shipping Development Fund Committee (Abolition) Act||1985|
|49.||Banking Companies (Regulation)Rules||1985|
|50.||The National Housing Bank Act||1987|
|52.||SIDBI General Regulations||1990|
|53.||Securities and Exchange Board of India Act||1992|
|54.||The Special Court (trial of Offences relating to Transactions in Securities) Act||1992|
|55.||The Industrial Finance Corporation (Transfer of Undertakings and Repeal) Act||1993|
|56.||Recovery of Debts due to Banks and Financial Institutions Act||1993|
|57.||Debts Recovery Appellate Tribunal (Procedure) Rules||1994|
|58.||Industrial Reconstruction Bank (Transfer of Undertaking & Appeal) Act||1997|
|59.||Foreign Exchange Management Act||1999|
|60.||Insurance Regulatory and Development Authority Act||1999|
|61.||Prevention of Money Laundering Act||2002|
|62.||Fiscal Responsibility and Budget Management Act||2002|
|63.||The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act||2002|
|64.||Industrial Development Bank (Transfer of Undertaking & Repeal) Act||2003|
|65.||Credit Information Companies (Rules & Regulation) Act||2005|
|66.||Government Securities Act||2006|
|67.||The Banking Ombudsman Scheme||2006|
|68.||Factoring Act Rules||2011|
|69.||SARFAESI (Central registry) Rules||2011|
|70.||Securities Law (Amendment) Act||2014|
|71.||The Regional Rural Banks (Amendment) Act – Diluted the sharing pattern by limiting the composite share of Central Government and sponsor bank to 51%||2014|
|72.||The Insurance Laws (Amendment) Act- pushed FDI limit to 49%||2015|
|73.||The Companies Act (Amended) (legislated in 1956)||2015|
Aspirants of UPSC Exam, Bank exam, SSC exam or other prominent competitive exam are advised to stay abreast with GK and Current Affair topics as approximately 20% of questions are based on general awareness in any exam.
Banking reforms and acts is an important static GK topic. For information on various Static GK check the article linked here.
Candidates can check the gist of Yojana for Banking Reforms at the linked article.
Aspirants of various competitive exams can test their learning of banking sector acts and reforms by giving free Online Quizzes.
For the latest information on UPSC 2022, kindly visit the page linked here.
We will be sharing more such topic-wise GK articles, so keep checking the page regularly to stay up-to-date and ace the general awareness section of any exam.