A standout amongst the most important functions of RBI is to fill in as regulator and supervisor of financial system. The financial system in India incorporates Commercial Banks, Regional Rural Banks, Local Area Banks, Cooperative Banks, Financial Institutions including Development Financial Institutions (DFIs) and Non-Banking Financial Companies. RBI infers its controlling forces for Indian Banking System from the arrangements of the Banking Regulation Act 1949. For different substances, it gets control from the RBI demonstration 1934.[1] The goals of this capacity are to secure the enthusiasm of the contributors and keep up the wellbeing and soundness of the banking and Financial System of the nation. After the progression of the Indian Economy and Banking changes in 1990s, the abundance of the supervisory functions of RBI moved toward becoming has developed massively. To stay aware of the additional significance of this capacity, the Board of Financial Supervision was comprised in 1994. From that point forward, BFS is filling in as the principle managing power behind RBI’s regulatory and supervisory activities. The Banking Regulation Act, 1949 came into force on March 16, 1949. It contained various aspects related to banking in India.

[1]https://www.uio.no/studier/emner/sv/oekonomi/ECON4335/h16/uio_lecture_regulation.pdf

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