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One major impact of IBC on the banking system is:

medium Q8 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
One major impact of IBC on the banking system is:
AImproved credit discipline among borrowers
BComplete elimination of NPAs
CUniform lending rates across banks
DRemoval of capital requirements
Step-by-Step Solution

  1. Step 1: Identify behavioural impact of IBC

    IBC changes borrower expectations.

  2. Step 2: Link with banking outcomes

    Fear of insolvency proceedings improves repayment discipline.

  3. Final Answer:

    Improved credit discipline among borrowers → Option A

  4. Quick Check:

    Discipline improvement = key IBC impact ✅
Quick Trick: IBC enforces discipline, not miracles.
Common Mistakes:
MISTAKES
  • Believing IBC instantly removes all NPAs.
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