Quiz: Reading Comprehension

Hello Readers,
                              In today’s comprehension, the concern has been raised on the increasing number of NPA (Non Performing Assets). It is expected to be approx 6% in the year 15-16. Do read it carefully as it can be asked in exams like SBI, IBPS, SSC and other Govt Exams.

Directions (Q.1-10): Read the
following passage carefully and answer the questions given below. Certain
words/phrases have been printed in bold to help you locate them.

        With the Indian economy not picking up speed as was
being anticipated, the spotlight is on the banking industry. It has been asked
why the industry has been reluctant to pass on the double-dose rate
reduction effected by the Reserve Bank of India in twin installments outside
the policy cycle this year. The answer is not difficult to find. The rising
load of bad loans has put banks — especially those in the public sector — in a
pincer-like situation. A combination of factors saw gross Non Performing Assets
drop from a high of 12 per cent in 2000-01 to 2.5 per cent in 2008-09. These
factors included an improved economy, the establishment of debt recovery
tribunals, and the enactment of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002. But the trend
was reversed and the figure rose to 4.6 per cent in September 2014. An estimate
by rating agency Crisil suggests that ‘stressed assets’ could stay flat at 6
per cent in 2015-16. And Crisil put the value of such assets at a mind-boggling
Rs.5.3 trillion. RBI Governor Raghuram Rajan has said he isn’t quite sure if
the banking system has seen the peak yet in bad loans. Since public sector
banks account for two-thirds of all banking activity, it is turning out to be a
huge worry.
        Are bad loans a transitory phenomenon, or are they a
chronic problem? If it indeed is a transitory issue, it should slowly evaporate
as the economy picks up. If they are the consequence of systemic ills,
then the solution lies in fixing the causes. If the economic slowdown is a part
of the problem, scam-induced, court-ordained interventions in vital sectors
such as coal, mining and telecom have added to the banks’ misery with bad
loans. The stressed banks are wary of fresh lending. The need for stricter provisioning
in view of the new Basel stipulations will add to their problems.
Moreover, banks will no longer be allowed to treat restructured loans as
standard ones. The revamped 5/25 scheme is essentially meant to remedy
the situation. It allows banks to rejig long-term infrastructure loans by
refinancing or selling loans every five years. But the scheme will at best mask
stressed assets since banks need not report such loans. Bad loans have put the
government in a moral predicament. Can it use the taxpayers’ money to
nurse the banks back to health? Besides putting in place a watertight loan
appraisal mechanism, the situation calls for a new framework outside the normal
banking system to address the funding needs of long-term projects. Bad loans bode
ill not just for banks but also the economy. The issue needs to be addressed
with the utmost priority.
-Source The Hindu, Delhi Edition,
21st May
Q.1. Choose an appropriate title for the
passage.
1) Interventions in Banking Activities
2) Asset Recovery by Banks
3) Asset and NPA
4) Bad Loans are Bad News
5) None Of these
Q.2.Which remark of the Governor of RBI is a
huge worry for the Economy of our country?
A) The stressed assets could stay flat
at 6 per cent in 2015-16.
B) Indian banking system has not seen its worst phase yet.
C) The value of NPA in the year 15-16 is going to be 5.3 trillion.
1) Only A
2) Only C
3) Only B
4) Only A and C
5) Only B and C
Q.3.Which of the following is true according
to the passage?
A) The rising burden of bad loans, especially on public sector,
has put them in a difficult situation.
B) CRISIL has alarmed about the rising trend of Indian economy to
the Govt.
C) Banks will no longer be allowed to
treat restructured loans as standard ones
1) Only A
2) Only B
3) Only C
4) Only A and C
5) All A, B and C
Q.4.What solution did the author offer if this rising NPA is a
transitory phenomenon?
1) The author has not offered any solution but suggested that it
will go away on its own when international market stabilizes.
2) The author has not offered any solution but suggested
that it will go away on its own when Indian economy picks.
3) This situation is on its own and it doesn’t matter what we do,
and what we try, it will only go away if the political situation stabilizes.
4) All of the above
5) None of the above
Q.5. What does the
author mean by the phrase “If they are the consequence of systemic ills”?
1) If they are the upshot of the faults in the system.
2) If they are the consequences of systematic steps taken by the
RBI.
3) If they are the result of the steps taken in the time of
economic slowdown.
4) If they are the outcome of the meeting held between Govt. and
RBI.
5) None
Q.6.Which of the following is not the synonym
of the word “remedy”?
1) Abjure
2) Harm
3) Bawdy
4) Canard
5) All of the above
Q.7.Which of the following is not the synonym
of the word “reluctant”?
1) Denizen
2) Deride
3) None
4) Willingness
5) Expatiate
Q.8.Which of the following is the synonym of
the word “stipulations”?
1) Proviso
2) Stimulation
3) Fresco
4) Grouse
5) Homily
Q.9. Which of the following is the synonym of
the word “predicament”?
1) Indolent
2) Mendicant
3) Laconic
4) Paucity
5) Quandary
Q.10. Which of the following is the synonym of
the word “bode”?
1) Augur
2) Presage
3) Portend
4) Foretell
5) All
of the above

1. (4)
2. (3)
3. (4)
4. (2)
5. (1)
6. (2)
7. (4)
8. (1)
9. (5)
10. (5)