Economics · Banking System
Deposit insurance contributes to confidence in the banking system by protecting small depositors against loss in case of bank failure, up to prescribed limits. The broader purpose of such protection is to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1substitute for all forms of supervision by the central bank
- 2reduce panic and support confidence in formal banking✓
- 3allow unrestricted and undocumented cross-border movement without security verification
- 4remove all incentives for prudential regulation
Correct answer
reduce panic and support confidence in formal banking
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Banking System MCQs →Want more practice questions on Banking System?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Banking System