All Courses
Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity Get the App Login Join for Free
Sign in Open App
Banking Exams Exam  >  Banking Exams Questions  >  Low interest rates along with stiff competiti... Start Learning for Free
SaveJoin the Discussion on the App
Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.
This is an example of which of the following factors affect the profitability of the banks in India?
  • a)
    Micro Economic Factors
  • b)
    Macro Economic factors
  • c)
    Industry specific Factors
  • d)
    Other Bank specific factors
Correct answer is option 'B'. Can you explain this answer?
FREE This question is part of
Download PDF Attempt Test
Download PDF Attempt this Test
Most Upvoted Answer
Low interest rates along with stiff competition among banks put pressu...
Profitability of banks in India is affected by both internal and external factors.
Broadly the profitability of banks is affected by three major factors as follows:
  • Macro-economic factors-The profitability of banks respond positively to GDP growth and negatively, to inflation growth rate. Inflation has a strong effect on profitability of banks and banks' profits are not significantly affected by the real GDP fluctuations. Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.
  • Industry Specific Factors-NPAs have the most adverse impact on the profitability of banks. They reduce the profitability due to increase in operating costs and decline in their interest margins.
  • Other Bank Specific Factors-There exists a positive relationship between deposits and profitability as more deposits a bank collects, higher will be the availability of funds for generating loans and for other profitable uses such as investments.
< Previous Question Next Question >
Explore Courses for Banking Exams exam

Similar Banking Exams Doubts

Direction: Read the following passage carefully and answer the question based on what is written/ implied therein.In the early days of Internet marketing, online advertisers employed banner and pop-up ads to attract customers. These techniques reached large audiences, generated many sales leads, and came at a low cost. However, a small number of Internet users began to consider these advertising techniques intrusive and annoying. Yet because marketing strategies relying heavily on banners and pop-ups produced results, companies invested growing amounts of money into purchasing these ad types in hopes of capturing market share in the burgeoning online economy. As consumers became more sophisticated, frustration with these online advertising techniques grew. Independent programmers began to develop tools that blocked banner and pop-up ads. The popularity of these tools exploded when the search engine Google, at the time an increasingly popular website fighting to solidify its place on the Internet with giants Microsoft and Yahoo, offered free software enabling users to block pop-up ads. The backlash against banner ads grew as new web browsers provided users the ability to block image-based ads such as banner ads. Although banner and pop-up ads still exist, they are far less prominent than during the early days of the Internet.A major development in online marketing came with the introduction of pay-per-click ads. Unlike banner or pop-up ads, which originally required companies to pay every time a website visitor saw an ad, pay-per-click ads allowed companies to pay only when an interested potential customer clicked on an ad. More importantly, however, these ads circumvented the pop-up and banner blockers. As a result of these advantages and the incredible growth in the use of search engines, which provide excellent venues for pay-per-click advertising, companies began turning to pay-per-click marketing in droves. However, as with the banner and pop-up ads that preceded them, pay-per-click ads came with their drawbacks. When companies began pouring billions of dollars into this emerging medium, online advertising specialists started to notice the presence of what would later be called click fraud: representatives of a company with no interest in the product advertised by a competitor click on the competitors ads simply to increase the marketing cost of the competitor. Click fraud grew so rapidly that marketers sought to diversify their online positions away from pay- per-click marketing through new mediums. Although pay-per-click advertising remains a common and effective advertising tool, marketers adapted yet again to the changing dynamics of the Internet by adopting new techniques such as pay-per-performance advertising, search engine optimization, and affiliate marketing. As the pace of the Internets evolution increases, it seems all the more likely that advertising successfully on the Internet will require a strategy that shuns constancy and embraces change.Q. Which statement you can infer from the paragraph

Top Courses for Banking ExamsView all

Top Courses for Banking Exams

Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer?
Question Description
Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? for Banking Exams 2024 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Banking Exams 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Banking Exams. Download more important topics, notes, lectures and mock test series for Banking Exams Exam by signing up for free.
Here you can find the meaning of Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Low interest rates along with stiff competition among banks put pressure on interest margins of banks and hence negatively affect bank profitability.This is an example of which of the following factors affect the profitability of the banks in India?a)Micro Economic Factorsb)Macro Economic factorsc)Industry specific Factorsd)Other Bank specific factorsCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Banking Exams tests.
Explore Courses for Banking Exams exam

Top Courses for Banking Exams

Explore Courses

Suggested Free Tests

Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev
Get App
© EduRev
Education Revolution
Signup to see your scores go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup