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


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[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%.




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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)






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