KEY BANKING LAWS AND THEIR IMPACT ON THE FINANCIAL SYSTEM

AUTHORS – NISHANT SINGH* & DR. AMIT DHALL**

* STUDENT OF LAW. AMITY LAW SCHOOL, NOIDA

** FACULTY OF LAW, AMITY LAW SCHOOL, NOIDA

BEST CITATION – NISHANT SINGH & DR. AMIT DHALL, KEY BANKING LAWS AND THEIR IMPACT ON THE FINANCIAL SYSTEM, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (6) OF 2025, PG. 480-490, APIS – 3920 – 0001 & ISSN – 2583-2344

ABSTRACT

This Research Paper examines the Banking Regulation Act, 1949, as the cornerstone of India’s banking legal framework, enabling the Reserve Bank of India (RBI) to regulate, supervise, and safeguard the financial system. This paper explores the Act’s pivotal provisions, ranging from licensing requirements and capital adequacy norms to governance standards and supervisory powers and their influence on the structure and stability of the Indian banking sector. It highlights how the RBI utilizes these provisions to maintain monetary stability, enforce compliance, and mitigate systemic risks. The research also delves into landmark legislative reforms, including the nationalization of banks, the Recovery of Debts Act, 1993, and the SARFAESI Act, 2002, which collectively transformed credit recovery and financial discipline in India. The study further examines the adoption of Basel norms, the implementation of the Prevention of Money Laundering Act, 2002, and regulatory responses to digital banking and fintech integration. Post-liberalization reforms, including the Foreign Exchange Management Act (FEMA) and the Insolvency and Bankruptcy Code (IBC), 2016, are analyzed for their role in promoting financial inclusion, capital market development, and regulatory modernization