Q:

What are the pros and cons of nationalizing commercial banks in India?

A:

Advantages of nationalizing commercial banks in India include ensuring that all citizens are able to access funds, and improved regulation of how money is used by borrowers; a significant disadvantage of nationalization is reduced competition, meaning less incentive for the bank to modify services and rates. Proponents of a nationalized bank believe that because the bank is mandated to serve its citizens, it is more inclined to service the disadvantaged, such as low-income earners and remote communities.

Naysayers believe that nationalized banks may continue outdated and inefficient practices if they do not have to compete. New and innovative businesses may also find it harder to obtain loans, as nationalized banks are less inclined than private banks to take risks.

Sources:

  1. intoday.in

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