As India became independent in 1947, RBI's “tryst with nation building” ran parallel to the nation's “tryst with destiny”. The year 1949 also marked the enactment of the Banking Regulation Act which mandated a comprehensive and formal structure of bank regulation and supervision in India. For the first two decades of India's independence, banking was largely concentrated in our cities and major towns.
The rural areas were largely left behind. This was a lacuna as the potential of rural savings remained unexploited, and rural credit needs remained unmet. These were also the years when banking had become the centre of political attention. The 1960s were difficult years for the country from an economic perspective.