List Of Important Banking Sector Reforms & Acts

This article will upkeep you with Reforms in Banking Sector. 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 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.  

Government Exam 2020

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
10. Insurance Act 1938
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
28. Companies 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
33. Customs Act 1962
34. Unit Trust of India Act 1963
35. Limitation 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
51. SIDBI Act 1989
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. 

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 2020 exam, 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.

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