The prohibition of branches in a unit banking system results in banks that are typically:
A)larger and more efficient.
B)larger and more diversified.
C)smaller and more competitive.
D)smaller and less efficient.

Question

Quizplus · Accepted Answer

The prohibition of branches in a unit banking system restricts banks to operate only one branch, which limits their geographic reach and makes them relatively smaller in size. As a result, they might be less efficient due to a limited customer base for investment and loan opportunities. Additionally, they might lack the economies of scale associated with larger banking institutions. However, the lack of branches promotes competition among banks, which can offer customers better services, rates, and products.

The Prohibition of Branches in a Unit Banking System Results