General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.11)


If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits

[A]. will decrease
[B]. will increase
[C]. will neither increase nor decrease
[D]. None of the above

Answer: Option C


No answer description available for this question.

Prashant said: (Aug 25, 2010)  
It will remain the same, because bank do not increase the national income. So it remains the same immaterial wheather banks are there or not.

Pooja said: (Jun 23, 2011)  
What is monopoly bank? please tell me.

Sundar said: (Jun 23, 2011)  
Monopoly - meanings

1. Exclusive control or possession of something.

2. The exclusive possession or control of the supply or trade in a commodity or service.

3. (economics) a market in which there are many buyers but only one seller.

Asha said: (Jul 4, 2011)  
If the bank is nationalised (monopolised) then d bank will provide a low interest rate on deposits n will charge a high interest rate on loans as there will be no competition. Therefore deposits should decrease. So the answer given on d net is contradicting my concepts.

Priyanka Singhal said: (Jul 29, 2011)  
If all bank will be nationalised then the bank will provide a low interest rate on deposits and will charge a high interest rate on loans because there will be no competitor. So deposits should decrease and the people will not faith on their monopolised policies.

Susovan Dhara said: (Aug 22, 2011)  
If all banks get converted in nationalized bank then their will be monopoly of govt so govt can decrease interest rate as their will be no competition prevailing in the market and this will lead to low deposit and hence less capital formation.

Neha said: (Sep 3, 2011)  
Please tell me, what is nationalized bank means and why the banks are nationalized and what is monopoly?

I don't have any knowledge about banks and about their nationalization. So please tell me in long description.

Rajni said: (Sep 6, 2011)  
Monopoly means tere is only one seller of a product or service and there is no competitor of their product e. G electricity board, railways govt has monopoly in this area.

Shailesh said: (Sep 17, 2011)  
ASHA and priyanka:- The PSU's in INDIA are under the govt control and since for the govt welfare of the people is the first preference it won't let the monopolistic bank to increase the interest rate at will.

Shah Bhumesh said: (Sep 21, 2011)  
But each bank has to deposit some margin or deposit for getting nationalized. So can anyone explian why the answer is neither increase or decrease?

Neyaz Ahmed said: (Sep 25, 2011)  
Dear asha.

I like to clear your concept, that the monopolized of the bank has doesn't mean that goes in pvt sector, there is a government own responsibility for the public & Public deposits for this they provide Subsidies and all to us, than every thing will be reasonable that time so, neither deposite increase nor decrease.

Neyaz Ahmed said: (Sep 25, 2011)  
Dear, Shah Bhumesh.

Ya it is right that whatever you said but when the banks are taken monopolization than the policy will be the same for all banks so it will be neither increase nor decrease.

Kunal Malhotra said: (Nov 19, 2011)  
The question of increasing or decreasing interest rates arises aftee the merger of banks. If all the banks are nationalized and onverted into a monopoly bank, then the total number of deposits will be eaual to the sum of all the deposits of every individual bank. Hence the total number of deposits will neither increase or decrease i.e. it will remain the same.

Vishal said: (Jun 13, 2012)  
When a bank is nationalized it has to deposit a fixed amount with RBI and there will be change in deposits. So how the answer is c.

Sumit said: (Sep 7, 2012)  
Kunal Malhotra you are right.

Hemant Kanade said: (Dec 22, 2012)  
Now a days many private sector banking providing good services so it becomes necessary to convert into combine so that they can provide good service to people due to faith increase in deposit so that RBI will have to reduce repo rate.

Sanjeevkumar said: (Jul 16, 2013)  
Please tell me about monopolostic market?

Sweety said: (Aug 1, 2013)  
It is that form of market where there are many seller of the product but the product of each seller is different from the product of others. 4 eg: firm producing different brand of toothpaste like close up, colgate, pepsodent etc.

Pappu said: (Aug 8, 2013)  
Its right that when all the banks will nationalized then every bank would comes under the government, so government will not use his monopoly power for increasing interest rate because its work for human or nations welfare and also there will no access would take place so the deposit will be constant.

Its sure that the monopoly power only used in profit motives by private sectors like as reliance, idea and other trademarks communication companies but if govt will be monopolized then it will work on the basis of human welfare not in profit motive like as RAILWAY there is in fixed fair taken by seeing every stages of person which is living in society which is living in society. So the deposit will be constant not increase and nor decrease.

Sarvottam Tiwari said: (Sep 22, 2013)  
If government will work on social welfare too after being monopolized then deposit rates should be increase na ?

Why they will be neither increase no decrease ?

Deepak Kumar said: (Oct 18, 2013)  
May I know what is mean by monopoly after every bank in a economy being nationalised.

Aijaz Bhat said: (Dec 8, 2013)  
Increase or Decrease of deposits depends upon Interest rates. So, if all banks are nationalised and meanwhile if there is no change in interest rates than, option C is right.

Jay said: (Jan 1, 2015)  
Would you like anyone tell the name of the nationalized banks which are in no. 6?

Tanmay Hamdapurkar said: (Jan 2, 2015)  
Increase and Decrease in bank deposits is totally depends upon:

1) Bank rate.

2) Repo and reverse Repo rate.

3) SLR and CRR and the main is PLR Which is bench mark which decides or controls saving deposits rate of bank.

Narender Kumar said: (Oct 8, 2015)  
What is PLR and how it decide saving deposits rate of bank?

Gurulikeit said: (Nov 11, 2015)  
Question is confusing and fictions.

Pankaj Adhikari said: (Nov 18, 2015)  
Suppose If any 3 banks X, Y, Z are nationalized, AND converted into a monopoly bank W then these three banks merged into bank W and new restrictions and laws are made such that no bank can intervene in to this W banks domain or area.

And apparently the laws and policies of individuals banks will be changed and these banks to follows laws of the bank W. But total deposits will be same because only restrictions which defines monopolism will change that is quality of banks will be change but quantity or assets will be same.

Thank you.

Sunil Prusty said: (Sep 6, 2016)  
All banks are converted in a single, their deposit is same. Because the deposits are not changed that is constant.

Pardeep Kaur said: (Jan 21, 2018)  
I think deposits will decrease.

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