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Ratios and OMO

Statement: Sh...

Question

Statement: Should there be only few banks in place of numerous smaller banks in India?

Arguments:

I. Yes, this will help secure the investor`s money as these big banks will be able to withstand intermittent market related shocks.

II. No, a large number of people will lose their job as after the merger many employees will be redundant.

III. Yes, this will help consolidate the entire banking industry and will lead to healthy competition.

A

None is strong

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B

I and II are strong

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C

II and III are strong

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D

All are strong

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Solution

The correct option is A
None is strong

All arguments stated do not strongly support the statement because if there are few banks in place of several small banks, then security for investor cannot be ensured. Also, it cannot help to consolidate the entire banking industry.

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