What is the main disadvantage of branch banking system?

Problem of Management

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Lack of Initiative

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Monopolistic Tendencies

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All of the above

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Solution

The correct option is D All of the above
Branch banking refers to banking activities such as accepting deposits and lending loans away from bank's home or main office. Since its branches are away from home, all of the above options would be a disadvantage of the branch banking system.
Hence, Option (D) is the correct answer.

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Q68) Reserve Bank of India (RBI) on 6 August 2015 notified Section 23 of the Banking Regulation Act, 1949 -Relaxations in Branch Authorisation Policy. Some guidelines that should be followed for Merger/Closure/ Shifting of branches includes:

1) Banks may shift, merge or close any branch in urban or semi-urban areas at their discretion

2) Banks should, however, ensure that customers of the branch, which is being shifted/merged/closed, are informed well in time before actual shifting/merger/closure of the branch, so as to avoid inconvenience to them

3) It may further be ensured that branches are shifted within the same or to a larger population category, i.e. semi urban branches to semi urban or rural centres and rural branches to other rural centres.

4) Thus banks may shift their metropolitan, urban and semi urban branches outside the State, and their rural branches outside the block without prior approval of RBI

Which of the statements given above is/are incorrect?

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