The banking sector is among the key infrastructural units that drives growth in any country’s economy. For a country’s economy to function smoothly, it should have a robust and efficient banking system. The same applies for India too. Also considering the diversity of Indian’s demography, it becomes even more important for India to have a strong, extensive and secure banking system. The banking system in India has undergone a sea change in the past 4 decades. In the post-independence era in India, there existed around 1100 small and medium sized banks. With an intention to consolidate and rationalize the operations of these banks the Government of India introduced the Banking Companies Act in 1949 which was later amended in 1965 as the Banking Regulation Act, 1949. From those days onwards, the Reserve Bank of India was designated as the central controlling and governing authority in the Indian banking system.