Banks are an inevitable part of human life. They are as important as oxygen and water. We all have a good amount of knowledge of What is Bank? How does it work? but do you know What is BANKING ACT 1933?
There have been numerous banking acts which have laid down certain guidelines for the Banking system.
The Banking Act 1933 was a statute enacted by the United States Congress that established various reforms in the banking system.
Popularly known Glass Steagall Act, this act effectively separated commercial banking from investment banking. It also successfully created Federal Deposit Insurance Corporation and was enforced by the then-president Franklin D. Roosevelt in June 1933.
Different banking acts are passed and enforced from time to time to make banking sector efficient.
Another banking act came in 1935 which is the main act that regulates all banking firms in India. Initially, the law was only enforceable to banking companies.
But with the 1965 amendment, it became applicable to cooperative banks and to introduce other changes.
Various acts are introduced and amended to make the acts more effective. With the passage time, sometimes the acts become obsolete.
Therefore, it is necessary to bring amendments to the already introduced acts.
Let’s discuss another important act. The National Bank Act of 1863 was designed to bring a national banking sector. The system of creating a national currency was brought about by this act only. The National Banking Act is a whole breakthrough in itself as it began by creating a landmark. It is deemed that Congress enforced this act in order to fill up the financial crisis during the American Civil War.
There have been tremendous other acts as well. Some of them are listed as follows:
- State Bank of India Act, 1955
- State Bank of Hyderabad Act, 1959
- Banking Laws Act, 1965
- Reserve Bank of India Act, 1934
- Banking Regulation Act, 1934
- Partnership Act, 1932
The underlying point is that important banking acts are required to make the banking sector even more efficient than before. It is important that there remains a body which regulates the banking activities from time to time.
Otherwise, the entire future of the nation would be in jeopardy. As one of the main sectors of an economy is the Banking sector.