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A bank's cost income ratio falls from 55% to 45%. The bank has become:
ALess efficient
BMore risky
CLess liquid
DMore efficient
Answer & Solution
Correct answer: D. More efficient
1. The ratio compares non-interest expenses to net total income.
2. A lower ratio means less cost per unit of income.
3. So the bank is more efficient.
_Source: Reserve Bank of India, Glossary (rbi.org.in)._
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