Multiple choice

In 2005-06, which of the following banks earned the highest return on assets?

  1. Private Sector Banks

  2. Foreign Banks

  3. Public Sector Banks

  4. Scheduled Commercial Banks
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Public Sector Banks had the highest Return on Assets (ROA) in 2005-06, around 1.0%, compared to private and foreign banks. This was due to their dominant market share, lower cost of funds, and established customer base. Private sector banks had lower ROA (0.7-0.8%) due to higher operational costs and aggressive expansion. Foreign banks had even lower ROA due to limited branch presence and higher compliance costs.

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