- Large banks resulting from mergers often have a stronger balance sheet and higher creditworthiness, which can enhance their ability to raise funds from the market. Increased borrowing capacity allows them to potentially extend more credit, aiding economic activity. - Mergers aim to consolidate resources, reduce duplication (e.g., branches, staff, technology), and streamline operations, which is expected to lead to improved operational efficiency and profitability for the merged entity and the banking sector as a whole.
Choose the correct statement related to recent Bank mergers in India. (a) Large Banks will be able to borrow more from the market and thereby help the economy revive. (b) Bank merger will lead to increased operational efficiency of the banking sector
Asked in TNPSC CS Prelims 2021 · Topic: Money & Banking (Commercial Banking: Structure, Functions, and Recent Reforms in India)
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