Hello and welcome to ExamPundit. Here is another set of Reading Comprehension for SBI PO Mains 2015.
Directions (Q. 1–
10): Read the following passage carefully and answer the questions given below
it.
10): Read the following passage carefully and answer the questions given below
it.
Chit funds, a savings avenue that
is as popular with housewives as it is with businessmen, have earned a bad
name. The reason is the scores of scams in the name of chit funds, the latest
being allegedly perpetrated by the
Saradha Group in West Bengal. Promoters put up a stern defence and say chit funds are the only financial product
that gives people the option to both save and borrow, and the scams are giving
them a reputation that is undeserved. India has nearly 10,000 registered chit
fund companies, the largest one being run by the Kerala government which has
been in existence since 1969. Financial advisers also say that chit funds can
be a good investment, provided the promoters follow the strict rules that have
been laid down for them. There are many organised companies incorporated to do
this as a business and these are governed by state or central laws. There is a
central Chit Funds Act of 1982, apart from a number of state chit fund Acts.
There is an office of “registrar of chit funds” in every state that monitors
operations which are quite stringent.
Utilisation and appropriation of subscriber’s money is strictly prohibited.
Chit fund is a unique financial concept, which has flexibility to borrow or
save. By paying one-month installment amount, a person can get to borrow from
the chit value, by offering a discount not exceeding the maximum limit
ascertained in the chit agreement. The duration of chits are normally 25
months, 40 months and 50 months. The chit groups vary from 25,000 to few lakhs
depending on the Chit Fund Schemes. In a chit value of Rs.100000/- for a period
of 50 months, first the subscriber can get an amount of 55000/-by paying only
Rs.2000/- and remaining installments he pays over a period of 50 months. The
rate of borrowing is much cheaper than several other financial schemes. The non
prized subscriber who is a saving member up to the last installments gets
dividend which is comparatively higher than the interest that are accrued by way of Recurring Deposit
Schemes. The purpose of drawing the prized amount need not be disclosed. It can
be used for any need by the member for Example: House construction, Marriage,
Education, Expansion of business, buy a Computer or any other purpose at his discretion. The dividends earned in a
chit are not taxable. If you want to claim the bid as loss then these dividends
has to be shown as revenue income in the assessment. Thus Chit is a mutually
beneficial scheme where in a group of people contributes towards the chit value
and one member from the group is given the prize amount and the dividends are
distributed to all the other members. The biggest risk is misuse of pooled
funds by promoters. The other is default by subscribers, affecting the promised
fund distribution. It is not advisable to invest in unregistered chit funds. Further,
one should not put money in a chit fund whose other members are unknown to you.
is as popular with housewives as it is with businessmen, have earned a bad
name. The reason is the scores of scams in the name of chit funds, the latest
being allegedly perpetrated by the
Saradha Group in West Bengal. Promoters put up a stern defence and say chit funds are the only financial product
that gives people the option to both save and borrow, and the scams are giving
them a reputation that is undeserved. India has nearly 10,000 registered chit
fund companies, the largest one being run by the Kerala government which has
been in existence since 1969. Financial advisers also say that chit funds can
be a good investment, provided the promoters follow the strict rules that have
been laid down for them. There are many organised companies incorporated to do
this as a business and these are governed by state or central laws. There is a
central Chit Funds Act of 1982, apart from a number of state chit fund Acts.
There is an office of “registrar of chit funds” in every state that monitors
operations which are quite stringent.
Utilisation and appropriation of subscriber’s money is strictly prohibited.
Chit fund is a unique financial concept, which has flexibility to borrow or
save. By paying one-month installment amount, a person can get to borrow from
the chit value, by offering a discount not exceeding the maximum limit
ascertained in the chit agreement. The duration of chits are normally 25
months, 40 months and 50 months. The chit groups vary from 25,000 to few lakhs
depending on the Chit Fund Schemes. In a chit value of Rs.100000/- for a period
of 50 months, first the subscriber can get an amount of 55000/-by paying only
Rs.2000/- and remaining installments he pays over a period of 50 months. The
rate of borrowing is much cheaper than several other financial schemes. The non
prized subscriber who is a saving member up to the last installments gets
dividend which is comparatively higher than the interest that are accrued by way of Recurring Deposit
Schemes. The purpose of drawing the prized amount need not be disclosed. It can
be used for any need by the member for Example: House construction, Marriage,
Education, Expansion of business, buy a Computer or any other purpose at his discretion. The dividends earned in a
chit are not taxable. If you want to claim the bid as loss then these dividends
has to be shown as revenue income in the assessment. Thus Chit is a mutually
beneficial scheme where in a group of people contributes towards the chit value
and one member from the group is given the prize amount and the dividends are
distributed to all the other members. The biggest risk is misuse of pooled
funds by promoters. The other is default by subscribers, affecting the promised
fund distribution. It is not advisable to invest in unregistered chit funds. Further,
one should not put money in a chit fund whose other members are unknown to you.
1. Under which of the
following act the chit fund companies are regulated?
following act the chit fund companies are regulated?
(a) Act – 1969
(b) Act – 1925
(c) Act – 1982
(d) Data Inadequate
(e) None of these
2. What is the income
tax benefit from using chits ?
tax benefit from using chits ?
(a) The Income from chits is not subject to Income Tax.
(b) The chit loss can be deducted from the Income.
(c) No relaxation from the Income Tax.
(d) Income through chits above 1 lakh is taxable.
(e) None of these
3. What are the
duration of the chits ?
duration of the chits ?
(a) More than 3 years.
(b) More than 1 year
(c) Vary from more than 1 years to 4 years and 2 Months
(d) Above 5 years
(e) None of these
4. Which of the
following is not a benefit of joining a chit ?
following is not a benefit of joining a chit ?
(a) There will be a compulsory saving.
(b) Through it dividends can be earned every month.
(c) The total dividend earned by chit can be more than the
bank interest rate.
bank interest rate.
(d) It gives flexibility to borrow or save.
(e) None of these
5. Which of the
following statement is true in the context of the passage ?
following statement is true in the context of the passage ?
(a) Many chit funds with working history of over 30 years
reveals that they have not defaulted in defaulted in repayment of any person’s
money.
reveals that they have not defaulted in defaulted in repayment of any person’s
money.
(b) All chit funds in the interest of its subscribers offers
a discount of 2% of the installment, if the installments are paid before the 10th
of every month.
a discount of 2% of the installment, if the installments are paid before the 10th
of every month.
(c) The investors pays an amount at specific intervals
usually upto a fix period.
usually upto a fix period.
(d) All of the above
(e) None of these
Direction (Q. 6 – 8)
: Choose the word which is most OPPOSITE in meaning of the word printed in bold
as used in the passage.
: Choose the word which is most OPPOSITE in meaning of the word printed in bold
as used in the passage.
6. Stringent
(a) Lenient (b) Stiff (c) Weak (d) Inexact (e) Kind
7. Discretion
(a) Omission (b) Diplomacy (c) Disregard (d) Tact (e) Heed
8. Accrued
(a) Accumulate (b) Dwindle (c) Flow (d) Spend (e) Enlarge
Direction (Q. 9 –10)
: Choose the word which is most nearly the SIMILAR in meaning of the word
printed in bold as used in the
passage.
: Choose the word which is most nearly the SIMILAR in meaning of the word
printed in bold as used in the
passage.
9. Stern
(a) Mild (b) Gentle (c) bland (d) firm (e) stubborn
10. Perpetrated
(a) Committed (b) Failed (c) abstained (d) Presented (e)
Neglected
Neglected
Regards
Team ExamPundit
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