English Quiz for BOB Manipal and Dena Bank PGDBF 2017 – Set 1

[Directions:
Set of 10 Questions] Read the following passage
carefully and answer the questions given. Certain words/ phrases have been
written in bold to help you locate them while answering the questions.

Banks are
usually reliable barometers of the health of the economies they help finance.
So news in recent days that India’s lenders have lost over 200 billion rupees
($3 billion) in the most recent quarter sits oddly with zippy growth in GDP of
7.9%. A revving economy may help the banks overcome their weakness. Far
likelier is the opposite outcome: that the Indian economy ends up being damaged
by its lenders. Most of the trouble lies in India’s state-owned banks, a
network of 27 listed but government-controlled entities that account for 70% of
India’s banking system by assets. Their share prices have tumbled ever since
the Reserve Bank of India (RBI) , the central bank and regulator, sensibly
forced them to confess to past mistakes. A staggering
17% of the loans they made in a mini credit boom around 2011 have either had to
be written off or are likely to be. Corporate lending, particularly to powerful
Indian conglomerates, is at the root of the problem. Some of the dodgy loans have soured because of bad
luck: mining projects have been hit by slumping commodity prices. Some reflect
bad judgment: loans to infrastructure developers have proved bankers to be
wildly optimistic about the ability to get stuff built in bureaucratic India.
And some reflect bad faith: politicians in the previous government leant
shamelessly on public banks to supply money to their cronies in business. To
its credit, the government of Narendra Modi, in office since 2014, has cracked
down on this kind of corruption. Along with Raghuram Rajan, governor of the
RBI, it has been willing to air the financial system’s problems. A recently
passed (but not yet operational) bankruptcy law will give banks power to
foreclose on defaulting borrowers, many of them tycoons who have historically
run rings around their bankers. The government even wants to consolidate the 27
banks into less than half that number, over the objection of trade unions.

It needs to be
still bolder. The priority is to be more scrupulous about cleansing the
financial system of sour loans. The
option of setting up a “bad bank” to remove the dud assets from ailing lenders’
balance-sheets has been ruled out. The funds earmarked to recapitalise the
banks, which now have the most threadbare equity cushions in Asia, are
insufficient. Credit-rating agencies are warning that the banking miasma is a
threat to India’s sovereign rating. Muddling through is a tried-and-tested
strategy when it comes to struggling banks. Europe is a past master at this
approach and the result is a banking industry that has been unable to support
growth. This ossification may be starting in India, where loans to industry are
growing by a meagre 2% a year. By contrast, America forced recapitalisations on
its banks after the 2007-08 financial crisis—a painful exercise for all sides,
but one that was rewarded with a swift
return to health. America is the example for India to follow. An early
confirmation of a second three-year term for Mr Rajan, who will otherwise
depart in September, would send the right message. A government that describes
itself as “pro-market” should also lay out a path to the privatisation of
state-owned lenders. It is no coincidence that private-sector banks have
experienced only a small fraction of the losses of state-backed rivals. Mr Modi
should also aim to scrap socialist-era rules that force all banks to make a
fifth of their loans to support farming and that dictate where they can open
branches. The government has made some welcome changes. But until it abandons its belief that a state-owned
banking system is the right way to allocate credit, India’s banks will hold the
economy back.

1. What does the
phrase “run rings around” mean here?

a) Running in
circles.

b) Trying to
escape responsibilities.

c) Outwitting
the bank

d) Fabricating
stories.

e) None of the
above.

2. Why does the
author say “America is the example for India to follow”?

i. America
forced recapitalisations on its banks after the 2007-08 financial crisis

ii. America has
undergone the same crisis as India.

iii. After the
recapitalization on its banks the banking industry in America was healthier
than ever.

a) Only ii

b) Both i &
iii

c) ii & iii

d) i ii &iii

e) None of the
above.

3. How does some
of the lending reflect bad faith?

a) Loans were
provided without verification.

b) Some
industries were hit by calamities.

c) Politicians
supplied money to their cronies in business by taking loans from banks.

d) All of the
above

e) None of the
above.

4. What is the
appropriate title for the passage?

a) Bad decisions
by banks

b) Banking in
India

c) Time for
reform

d) Banks, nor
Bureaucrats

e) Banking
Economy.

5. Why should
the government lay out a path to the privatisation of state-owned lenders?

a) Private
sector banks have experienced only a small fraction of the losses.

b) Private
sector has best managerial policies.

c) The
defaulters are severely punished in Private sectors.

d) Private
sectors follow American banking rules.

e) Private
sector has helped in GDP growth of 7.9%.

Choose the
word/phrase which is similar in meaning to the word/phrase printed in bold in
the passage.

6. Dodgy

a) Unreliable.

b) Less

c) Meager

d) Faulty

e) Safe.

7. Sour.

a) Acidic

b) Bland

c) Resentful

d) Moldy

e) Thrift

8. Swift

a) Prompt

b) Expected

c) Upright.

d) Sudden

e) Sluggish.

Choose the
word/phrase which is opposite in meaning to the word/phrase printed in bold in
the passage.

9. Staggering.

a) Unstable

b) Spectacular

c) Unimpressive

d) Stable.

e) Expected.

10. Abandons.

a) Desert.

b) Leave.

c) Adhere

d) Reek.

e) Demur.

Answers:

1. (c)
2. (b)
3. (c)
4. (d)
5. (a)
6. (a)
7. (c)
8. (a)
9. (c)
10. (c)