Question

Give two arguments in favour of the privatization of banks over nationalizing them.

Answer 1

1)The main argument for privatisation of banks is that private banks have a profit incentive to cut costs and be more efficient. The private sector banks can resist local government pressure to lend to favoured sectors.

2)Bank nationalisation had given monopoly to the government in the banking industry. As in case of any monopoly situation, the quality of service went down and the people suffered.