Question

Write the difficulties of commercial banks.

Hint:

Banks must balance risk and regulation to overcome operational challenges.

Answer 1

Step 1:
Non-performing assets (NPAs) pose a challenge as unpaid loans reduce profitability and require provisioning.
Step 2:
Maintaining liquidity is difficult due to the need to balance deposits and loan demands, especially during economic downturns.
Step 3:
Compliance with central bank regulations and financial laws adds operational complexity and costs.
Step 4:
Increasing competition from fintech and other banks pressures profit margins and market share.