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One expected benefit of bank consolidation is:

medium Q14 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
One expected benefit of bank consolidation is:
AIncrease in weak banks
BHigher administrative costs
CImproved financial stability of banks
DComplete removal of banking risks
Step-by-Step Solution

  1. Step 1: Understand consolidation impact

    Mergers create stronger balance sheets.

  2. Step 2: Identify the realistic benefit

    Financial stability improves, though risks do not vanish completely.

  3. Final Answer:

    Improved financial stability of banks → Option C

  4. Quick Check:

    Stronger capital base = more stability ✅
Quick Trick: Stability improves, risks don’t disappear.
Common Mistakes:
MISTAKES
  • Believing mergers eliminate all banking risks.
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