PNB took over 'Oriental Bank of Commerce' and 'United Bank of India' to become the Country's second largest lender.
_________ dimension of Business environment is exhibited by above.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Economic Environment
Option (1) Technological Environment — Incorrect. This covers new scientific inventions and new ways of producing goods. A bank merger is not a new technology.
Option (2) Political Environment — Incorrect. This covers political conditions such as stability and peace in the country and the attitude of elected leaders towards business.
Option (3) Legal Environment — Incorrect. This covers laws passed by the government, court judgments and orders of government bodies.
Option (4) Economic Environment — Correct. The economic environment covers forces such as interest rates, inflation, people’s income, the stock market and the value of the rupee. Banks collect savings and give loans, so when PNB took over two other banks and became the second largest lender, the structure of the banking sector changed. This is a change in the economic environment.
NCERT (2026-27 Edition): “(i) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. …” “(iii) Technological Environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business. …” “(iv) Political Environment: Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business. …” “(v) Legal Environment: Legal environment includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— centre, state or local. …” |