---
title: "Banking Regulation Act, 1949: RBI's Core Law"
description: "The Banking Regulation Act, 1949 empowers the Reserve Bank of India to license and supervise banks, crucial for maintaining financial stability in India."
url: "https://modeldiplomat.com/learn/glossary/banking-regulation-act-1949"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Banking Regulation Act, 1949 is the Indian statute granting the Reserve Bank of India comprehensive powers to license, supervise, and wind up banking companies.
- What is the difference between the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934?
- What does Section 35A of the Banking Regulation Act empower the RBI to do?
- How did the 2020 amendment change the Act's treatment of cooperative banks?
- Which section governs bank mergers and reconstruction schemes?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 16 March 1949

   The Banking Regulation Act, 1949 is the principal Indian statute governing the conduct of banking business, enacted by the Constituent Assembly (Legislative)…

2. 1 March 1966

   It was renamed the Banking Regulation Act with effect from , when its provisions were extended to cooperative banks.

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Example

In March 2020 the Reserve Bank of India invoked Section 45 of the Banking Regulation Act, 1949 to impose a moratorium on Yes Bank and prepare a reconstruction scheme under which the State Bank of India acquired a stake.

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