Benefits/Merits/ Advantages Of Bank Regulation
Main advantages or benefits of banking regulations are as follows:
1. To Build Confidence
Bank regulation helps to build public confidence and create trust in the banking system of the country.
2. Safety
Banking regulation ensures the safety of public savings in the bank. It is essential to protect public deposit.
3. Credit Control
Credit control is another important advantage of banking regulation. It prevents excess credit creation by controlling loans and investments.
4. Fairness
Bank regulation ensures fairness in financial services to all the customers without discrimination on the basis of race, sex, religion etc.
5. Implementation Of Policy
It helps to implement government's policy properly to assist the economic policy of the nation.
Drawbacks/Demerits/ Disadvantages Of Bank Regulation
Major drawbacks or disadvantages of banking regulation are as follows:
1. Less Profit
Unnecessary control and heavy regulation may restrict banks to perform their tasks freely. So, banks cannot earn adequate profit.
2. Failure
Banking regulation may control unnecessary banking activities but it cannot prevent bank failure.
3. Costly And Time Consuming
Bank regulation is very costly and time consuming process.
