<P> The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in India . Initially, the law was applicable only to banking companies . But, 1965 it was amended to make it applicable to cooperative banks and to introduce other changes . </P> <P> The Act provides a framework using which commercial banking in India is supervised and regulated . The Act supplements the Companies Act, 1956 . Primary Agricultural Credit Society and cooperative land mortgage banks are excluded from the Act . </P> <P> The Act gives the Reserve Bank of India (RBI) the power to license banks, have regulation over shareholding and voting rights of shareholders; supervise the appointment of the boards and management; regulate the operations of banks; lay down instructions for audits; control moratorium, mergers and liquidation; issue directives in the interests of public good and on banking policy, and impose penalties . </P> <P> In 1965, the Act was amended to include cooperative banks under its purview by adding the Section 56 . Cooperative banks, which operate only in one state, are formed and run by the state government . But, RBI controls the licensing and regulates the business operations . The Banking Act was a supplement to the previous acts related to banking . </P>

Explain the salient features of banking regulation act 1949
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