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Which statement best describes the impact of bank consolidation on the banking system?

hard Q8 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
Which statement best describes the impact of bank consolidation on the banking system?
AIt completely removes financial risks
BIt weakens regulatory oversight
CIt leads to a more stable banking structure
DIt eliminates the need for capital adequacy
Step-by-Step Solution

  1. Step 1: Recall the objective of consolidation

    Consolidation aims at stability.

  2. Step 2: Choose the correct impact

    System becomes more resilient.

  3. Final Answer:

    It leads to a more stable banking structure → Option C

  4. Quick Check:

    Stability improves, risks don’t vanish ✅
Quick Trick: Consolidation strengthens system stability.
Common Mistakes:
MISTAKES
  • Believing consolidation removes all banking risks.
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