Public Sector Banks mostly face the issue of non-performing assets. To tide over such situation, which of the following concepts should be used?

The correct answer is:

B. Narrow Banking

Narrow banking is a system in which banks are restricted to lending only a small percentage

of their deposits. This helps to reduce the risk of bank runs and non-performing assets.

Unit banking is a system in which each bank is a separate legal entity. This can make it difficult for banks to merge or acquire other banks, which can limit their ability to grow.

Universal banking is a system in which banks offer a wide range of financial products and services, including commercial banking, investment banking, and insurance. This can make it difficult for banks to focus on their core business, which can increase the risk of non-performing assets.

Chain banking is a system in which banks are organized into a network of branches. This can help banks to reach a wider customer base, but it can also make it difficult for banks to manage their risk.

In conclusion, narrow banking is the best option for public sector banks to tide over the issue of non-performing assets. Narrow banking helps to reduce the risk of bank runs and non-performing assets, which are the two main problems faced by public sector banks.