Abstract

The Indian banking sector is a critical driver of economic progress, supporting growth, trade, and financial stability. However, it operates within a complicated regulatory environment defined by numerous laws and governing bodies. Key legislation like the Banking Regulation Act of 1949, the Companies Act, FEMA, and PMLA establish a comprehensive system focused on transparency, accountability, and adherence to both domestic and international standards. A significant challenge arises from the overlapping responsibilities of various regulators, including the RBI, SEBI, and IRDAI, which can make compliance difficult. Furthermore, the ever-changing global financial landscape and technological advancements constantly reshape regulations, demanding ongoing adaptation from banks. Strong compliance and risk management are essential to avoid penalties, reputational harm, and legal problems. While government reforms like the IBC and GST aim to simplify regulations, persistent issues such as NPAs, cybersecurity threats, and fraud remain key risks. In summary, successfully navigating India's banking legal framework requires a forward-thinking strategy, strong compliance mechanisms, and a commitment to good governance to safeguard the sector's integrity and future development.

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