The regulation of financial institutions/banks is a form of regulation and supervision, which subjects financial institutions (FIs) to certain requirements, restrictions and guidelines, which aim to maintain the integrity of the financial system. The laws, rules and Banking Acts in a country lay down rules for banks/financial institutions which they have to observe and comply with when they are being established, and in their operational phase while they carry on their business. These rules are designed to prevent unwelcome developments that might disrupt the smooth functioning of the banking and financial system, thus ensuring a strong and efficient banking system.