Chain banking—a system where multiple independent banks are controlled by the same individual or group of stakeholders—presents several distinct structural and financial disadvantages. A major risk is severe financial interdependence; if one institution within the chain encounters heavy losses or liquidity failures, it can trigger a domino effect that destabilizes the other associated banks. Chain banking also creates significant conflicts of interest, as central decision-makers may prioritize the private financial gains of the controlling group rather than the economic health of individual member banks or their local depositors. Additionally, the centralized control over credit authorization limits local financial flexibility, reduces market competition, and creates informal governance structures that make regulatory oversight and transparency difficult to maintain.