Q.Discuss the demerits (criticisms) of MNCs operating in a host country.

(a) MNCs can harm domestic industries, drain forex through profit repatriation, exploit resources, ignore national priorities, create monopolies and dump outdated technology. (b) By ownership, banks are public sector, private sector, foreign and cooperative banks.

In the Tamil Nadu HSC Commerce syllabus, this Part-IV OR question covers MNCs and types of banks. Both alternatives are answered.

(a) Disadvantages of Multinational Corporations (MNCs):

• Threat to domestic industries: Their huge size, capital and technology can wipe out small and local businesses that cannot compete.
• Drain of foreign exchange: They repatriate (send back) large profits, dividends and royalties to their home country, draining the host country's foreign exchange.
• Exploitation of resources: They may over-exploit the natural resources of the host country for their own benefit.
• Disregard for national interests: They often work for their own global profit, sometimes ignoring the development priorities and welfare of the host nation.
• Creation of monopoly: Their dominance can create monopolies and unfair competition, harming consumers.
• Transfer of outdated technology: They may pass on obsolete or unsuitable technology while retaining advanced technology at home.
• Political and cultural interference: They may interfere in domestic politics and affect local culture and consumption patterns.

(b) Types of Banks based on ownership pattern:

• Public sector banks: Owned and controlled by the government, which holds the majority of the capital. Example: State Bank of India, Indian Bank.
• Private sector banks: Owned and managed by private individuals or business houses. Example: HDFC Bank, ICICI Bank. …