GENERAL KNOWLEDGE

Detailed explanation-1: -The banking crisis during 1913-1917 and the failure of 588 banks in various parts of the country during the decade ended 1949 underlined the need for regulating and controlling commercial banks.

Detailed explanation-2: -A nationwide panic ensued in 1933 when bank customers descended upon banks to withdraw their assets, only to be turned away because of a shortage of cash and credit. The United States was in the throes of the Great Depression (1929–41), a time when the economy worsened, businesses failed, and workers lost their jobs.

Detailed explanation-3: -In all, 9, 000 banks failed–taking with them $7 billion in depositors’ assets. And in the 1930s there was no such thing as deposit insurance–this was a New Deal reform. When a bank failed the depositors were simply left without a penny. The life savings of millions of Americans were wiped out by the bank failures.