“20-20” English Question | Crack Dena Bank 2018 Day-108

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“20-20” English Questions | Crack Dena Bank 2018 (Day-108)

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Direction (1-10): Read the following passage carefully and answer the questions given below it.

Bad loans were 9% of total loans of all Indian banks in September 2016. At public sector banks, bad loans were 12% of all advances. Another 3% of loans in the aggregate have been restructured. The Economic Survey quotes market analysts as saying that 4-5% of loans are bad loans that have not been recognised as such. Thus, total stressed assets NPAs, restructured loans and unrecognised bad loans would amount to a staggering 16% of all loans and nearly 20% of loans at PSBs. Today’s bad loan problem has arisen from the lending boom that India’s banks embarked on in the period 2004-08, a period that saw economic growth reach the 9-10% range. NPAs, which are 9% of all loans today, were only half that level a year before. It is the failure to resolve the bad loan problem over the past several years that has exacerbated the problem. The best solution to a bad loan problem is to simply grow your way out of it. This can happen in two ways. One, banks keep financing projects that are not making repayments in full and would qualify as NPAs. They do so in the hope that, once growth revives, cash flows in the projects will improve. Two, banks grow their loan portfolio at a brisk rate. As the denominator in the ratio of bad loans to total loans grows, the bad loan problem automatically diminishes in significance. That’s how India’s banking sector came out of the bad loan problem in the early 2000s. Rapid growth in the world economy and the Indian economy provided a painless solution. This time around, however, luck has not favoured the Indian banking system. The global economy has been in a prolonged slump consequent to the financial crisis of 2007-08.

A committee appointed by the RBI and headed by P.J. Nayak argued as much in a report it submitted in late 2014.The committee seemed to think that majority government ownership of PSBs was the root cause of the bad loan problem as it meant political and bureaucratic interference with commercial decisions. Such an inference, which has been duly echoed by the media, is patently incorrect. As the Economic Survey of 2016-17 point outs, the bad loan problem is an economic problem, not a morality play the vast bulk of the problem has been caused by unexpected changes in the economic environment: timetables, exchange rates, and growth rate assumptions going wrong. In other words, factors extraneous to bank management and governance are primarily responsible for the problem. How the bad loan problem is understood has crucial implications for policy. If you believe that majority ownership by the government is the primary cause, you would focus on reducing government ownership in banks to below 50%. You would seek to distance the government from making appointments to PSBs, as proposed by the Nayak committee. You would decide that some PSBs were hopelessly weak and seek to merge them with healthier ones. These proposals are all politically difficult to handle, time-consuming or make impossible demands on financial and human resources. The NDA government seemed to have bought the faulty diagnosis but could not act on most of the prescriptions that followed. It chose to muddle along.

The government appointed a Bank Board Bureau as suggested by the Nayak committee and tasked it with appointing Chairmen and Managing Directors of PSBs. The BBB was also assigned the role of advising banks on restructuring and raising capital. The government cannot distance itself from key decisions on PSBs while being accountable for their performance. It would have judged that corrections must be made within the existing framework, not by overturning it. Realisation that the bad loan problem is not the result of some special villainy at PSBs but a matter of factors extraneous to management has finally dawned, if somewhat late in the day. The initiative has moved away from the BBB and back to the Finance Ministry and the RBI where it rightly belongs. There is clarity now that banks must be empowered to resolve the relatively small number of bad loans that account for a big chunk of the total in terms of value. In many cases, this would mean that banks write off a portion of the loans owed to them. To stiffen their spine, we need to put in place an authority that will vet loan settlement proposals put up to it. The BBB has constituted a two-person oversight committee but reports suggest that the committee will not take a view on write-offs. This is not helpful at all. We need a larger oversight committee or, as the Finance Ministry has proposed, multiple oversight committees to speedily vet loan write-offs. It makes sense to constitute a Loan Resolution Authority by an Act of Parliament. This must be complemented with other measures. Banks must develop the discipline of keeping thorough minutes of the proceedings related to resolution of bad loans. The rationale for particular decisions along with the pros and cons must be properly articulated. This will serve to give bank management a measure of protection. The government must provide adequate capital to the banks to cover write-offs and also facilitate fresh loan growth. It must end the delays in appointing Chairmen and Managing Directors of various PSBs. It must also revamp the boards of PSBs by bringing in independent directors of high quality.

 

1) According to the passage which of the following have been mentioned correct about the committee appointed by Reserve bank of India?

i. The committee appeared to think that majority government ownership of PSBs was the core driver of the bad loan problem

ii. The committee asserted that banks must evolve the exercise of keeping thorough the proceedings related to resolution of bad loans

iii. A committee was headed by P.J. Nayak and submitted its report in late 2014

a) ii and iii

b) i and iii

c) i and ii

d) Only ii

e) None of these

2) Which of the following given statements have been mentioned true regarding Bank Board Bureau in the passage?

i. The Bank Board Bureau was established to look over the appointments of Chairmen and Managing Directors of PSBs.

ii. The Bank Board Bureau was allotted the role of advising banks on restructuring and raising capital.

iii. The Bank Board Bureau has constituted a two-person committee and reports suggest that the committee will take a view on write-offs

a) Only iii

b) i and iii

c) ii and iii

d) i and ii

e) None of these

3) According to the passage which of the following steps must be to give bank management a measure of protection regarding bad loans?

i. Banks must develop the exercise of keeping thorough minutes of the proceedings related to resolution of bad loans.

ii. There is need to put in place an authority that will vet loan settlement proposals presented to it.

iii. Banks must be authorized to rectify the relatively small bad loans that reckoned for a major slab of the total in terms of value.

a) i and iii

b) Only ii

c) i and ii

d) All except i

e) All of these

4) Which of the following is not true in the context of the passage?

i. The global economy has been in a sustained decline sequential to the financial crisis of 2007-08.

ii. Bad loans were 9% of total loans of all Indian banks in September 2016.

iii. Non-performing assets which are 7% of all loans today, were only half that level a year before.

a) Only iii

b) i and ii

c) ii and iii

d) i and iii

e) None of these

5) Which of the following statement has been mentioned correct about the Economic Survey?

a) It points out that the government must provide adequate capital to the banks to cover write-offs and also facilitate fresh loan growth

b) It adverted that corrections must be made within the existing framework, not by overturning it

c) It stated market analysts as saying that 4-5% of loans are bad loans that have not been recognized.

d) It quotes that the PSBs were hopelessly weak and seek to merge them with healthier ones.

e) None of these

6) Which of the following is correct in the context of the passage?

i. If recognized completely total NPAs, would amount to a surprising 16% of all loans and nearly 20% of loans at PSBs.

ii. As the denominator in the ratio of bad loans to total loans grows, the bad loan problem automatically get amplified

iii. Factors peripheral to bank management and governance are primarily responsible for the bad loan’s problem.

a) ii and iii

b) i and iii

c) i and ii

d) Only i

e) All are correct

7) Choose the word which is most nearly the same in meaning as the word “staggering” printed in bold as used in the passage.

a) Sojourn

b) Enduring

c) Astonish

d) Accustom

e) Countenance

8) Choose the word which is most nearly the same in meaning as the word “prolonged” printed in bold as used in the passage.

a) Expedite

b) Perpetuate

c) Hasten

d) Impel

e) Culminate

9) Choose the word which is most opposite in meaning of the word “muddle” printed in bold as used in the passage

a) Complexity

b) Predicament

c) Ataxia

d) Encumbrance

e) Explicitness

10) Choose the word which is most opposite in meaning of the word “articulated” printed in bold as used in the passage

a) Coherent

b) Eloquent

c) Ambiguous

d) Cogent

e) Persuasive

 

Direction (11-15): Choose the set of word for each blank that best fits sentence and are grammatically correct.

11) The fact that personal data are widely shared with lots of companies creates even more business _________ but also makes the system a favourite target of privacy ________.

a) Convolution, prescribe

b) Intricacy, espoused

c) Complexity, advocates

d) Ramification, favor

e) Perceptible, sanction

12) Both Facebook and Google, ad-tech ecosystems unto themselves, have ______ ever more ad dollars, leaving slim pickings for rivals, as a result the industry was already _______.

a) Grapple, federating

b) Grabbed, consolidating

c) Seize, fortifying

d) Clasped, dissuading

e) Subjugate, reinforce

13) The compliance overhang of listing will no longer be ______by the promise of tax-free gains, it said promised tax regime must incentivise and protect foundational angel and domestic investors as opposed to ______ capital.

a) Mitigated, vanished

b) Allayed, concise

c) Modulate, ephemeral

d) Tempered, fleeting

e) Mollified, enduring

14) The misery of the Rohingya continues, as this report lays out in _______prose, those who were responsible for their ______ in Myanmar must be held to account, and soon.

a) Damning, plight

b) Ruinous, pinched

c) Reprobated, perplexity

d) Derogating, leveraged

e) Fulminated, impasse

15) Shell ________ that its assets are not at risk of being ________ other oil and gas companies are judging by a report about climate planning by the eight biggest of them by Carbon Tracker, a watchdog.

a) Affirmed, wrecked

b) Profess, sideline

c) Contends, stranded

d) Averred, beached

e) Pronounce, sequestered

 

Direction (16-20): In each of the questions given below a sentence is given which is then divided into five parts out of which one bold part is correct. There are no errors in three out of four remaining parts and therefore only one of the parts other than the bold one is incorrect. You must choose the grammatically incorrect part as your answer. Choose e if you find out there is no error. (Ignore punctuation error if any)

16) Early signs suggest that the ad-tech industry may a)/indeed be turning along from individually b)/ targeting people, and not only in Europe c)/, Google for instance has said it will d)/ offer ads that are less targeted at particular individuals e)/

a) b

b) c

c) a

d) e

e) No Error

17) It is likely that a referral to the ICC would also a)/, at the very least, make Myanmar’s generals pause b)/ before they launch any more barbaric c)/ attacks on the Rohingya, at the moment d)/they are acting in complete impunity e)/

a) c

b) a

c) b

d) e

e) No Error

18) According to the Two Degrees Investing Initiative a)/, a think-tank that conducted climate stress b)/tests for the Swiss and Californian regulators, c)/ global equity and corporate-bond markets also d)/ look dangerously expose to energy-transition risk e)/

a) e

b) d

c) b

d) c

e) No Error

19) Approval requirements and other norms would a)/be simplified in a manner that could encourage b)/ internationalization, however, sources, privy to the c)/ developments, also said the ODI policy was expected to tighten regulations d)/to prevent round-tripping structures e)/

a) b

b) c

c) d

d) a

e) No Error

20) With rising M&A activity, companies will a)/get direct access to new and more extensive b)/ markets, and better technologies, which c)/would enable them to increase their d)/ customer base and achieve a global reach e)/

a) c

b) d

c) b

d) e

e) No Error

 

Answers:

Direction (1-10):

  1. Correct Answer is: b)

It is mentioned in para 2-A committee appointed by the RBI and headed by P.J. Nayak argued as much in a report it submitted in late 2014. The committee seemed to think that majority government ownership of PSBs was the root cause of the bad loan problem.

  1. Correct Answer is: d)

It is mentioned in para 3-The government appointed a Bank Board Bureau as suggested by the Nayak committee and tasked it with appointing Chairmen and Managing Directors of PSBs. The BBB was also assigned the role of advising banks on restructuring and raising capital.

  1. Correct Answer is: e)

It is mentioned in para 3-There is clarity now that banks must be empowered to resolve the relatively small number of bad loans that account for a big chunk of the total in terms of value. We need to put in place an authority that will vet loan settlement proposals put up to it. Banks must develop the discipline of keeping thorough minutes of the proceedings related to resolution of bad loans.

  1. Correct Answer is: a)

It is clearly mentioned in para 1-Bad loans were 9% of total loans of all Indian banks in September 2016, NPAs, which are 9% of all loans today, were only half that level a year before. The global economy has been in a prolonged slump consequent to the financial crisis of 2007-08.

  1. Correct Answer is: c)

It is mentioned in para 1-The Economic Survey quotes market analysts as saying that 4-5% of loans are bad loans that have not been recognised

  1. Correct Answer is: b)

It is clearly mentioned in para 1&3- Thus, total stressed assets NPAs, restructured loans and unrecognised bad loans would amount to a staggering 16% of all loans and nearly 20% of loans at PSBs. As the Economic Survey of 2016-17 point outs, the bad loan problem is an economic problem, not a morality play the vast bulk of the problem has been caused by unexpected changes in the economic environment: timetables, exchange rates, and growth rate assumptions going wrong. In other words, factors extraneous to bank management and governance are primarily responsible for the problem.

  1. Correct Answer is: c)

The meaning of word staggering is very shocking and surprising

  1. Correct Answer is: b)

The meaning of word prolonged is to extend the duration of something

  1. Correct Answer is: e)

The meaning of word muddle is to bring into a disordered or confusing state.

  1. Correct Answer is: c)

The meaning of word articulated is to express an idea fluently

Direction (11-15):

  1. Correct Answer is: c)

The meaning of “complexity” is to the state or quality of being complicated” and it is suitable for i blank and the meaning of “advocates” is “to publicly recommend or support” so it is appropriate for ii blank.

  1. Correct Answer is: b)

The meaning of “grabbed” is “to obtain or get something quickly” and it is suitable for i blank and the meaning of “consolidating” is “to combine into a single more effective” so it is appropriate for ii blank.

  1. Correct Answer is: d)

The meaning of “tempered” is “to calm or moderate” and it is suitable for i blank and the meaning of “fleeting” is “lasting for a very short time” so it is appropriate for ii blank.

  1. Correct Answer is: a)

The meaning of “damning” is “extremely critical” and it is suitable for i blank and the meaning of “plight” is “a dangerous or otherwise unfortunate situation” so it is appropriate for ii blank.

  1. Correct Answer is: c)

The meaning of “contends” is “to assert something as a position in an argument” and it is suitable for i blank and the meaning of “stranded” is “to abandon or run aground” so it is appropriate for ii blank.

Direction (16-20):

  1. Correct Answer is: a)

In part b in place of along it should be away

  1. Correct Answer is: d)

In part e in place of in it should be with

  1. Correct Answer is: a)

In part e in place of expose it should be exposed

  1. Correct Answer is: a)

In part b in place of could it should be would

  1. Correct Answer is: c)

In part b in place of new it should be newer

 

Daily Practice Test Schedule | Good Luck

TopicDaily Publishing Time
Daily News Papers & Editorials8.00 AM
Current Affairs Quiz9.00 AM
Quantitative Aptitude “20-20”11.00 AM
Vocabulary (Based on The Hindu)12.00 PM
General Awareness “20-20”1.00 PM
English Language “20-20”2.00 PM
Reasoning Puzzles & Seating4.00 PM
Daily Current Affairs Updates5.00 PM
Data Interpretation / Application Sums (Topic Wise)6.00 PM
Reasoning Ability “20-20”7.00 PM
English Language (New Pattern Questions)8.00 PM