Political/ Legal Enviroment Of Banking Sector
Government and RBI policies affects the banking sector sometimes looking into the political advantage in a particular party the govt. declares some measures to their benefits like waver of short term agricultural loans, to attract the farmers votes. By doing so the profits of the bank get lower down. Various banks in the cooperative sector are open and run by the politicians. They exploit these banks for their benefits. Various chairmen’s of the bank are appointed by the government.Various policies are framed by the RBI looking at the present situation of the country for better control over the banks.
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