English Quiz for IBPS PO Mains | 16th December English Quiz

English Quiz for IBPS PO Mains :

Improve your English with English quiz. English Quiz to help you improve your score for exams like Bank, SSC, Railway, UPSC, UPSSSC, CDS, UPTET, KVS, DSSSB and other Government exams.

Directions (1-5): Read the following passage carefully and answer the questions given below them.

Paragraph 1: Many commercial banks in India are under financial stress. This has imparted a fragility to the banking system as a whole. Scams and scandals surface from time to time, making headline news. There is also a quiet crisis that runs deep. It is not audible yet. But it is mounting, since recurring failures of regulation or governance have not led to any accountability or corrective action. Some erosion of confidence is no surprise. If the problem continues to be neglected, a trust deficit could develop over time.

Paragraph 2: The fundamental problem is the non-performing assets (NPAs) of commercial banks. An asset becomes non-performing when it ceases to yield any interest or income for the bank. Simply put, it is a bad loan. Such NPAs are rising rapidly. This rise is partly a consequence of the far more rigorous asset quality review by the Reserve Bank of India (RBI) based on its income-recognition and asset-classification norms. The RBI financial stability report shows that for all commercial banks, gross NPAs as a proportion of total assets were 9.6% in March 2017 and an estimated 10.8% in March 2018. For public sector banks, these proportions were higher at 11.4% and 14.5%, respectively. The problem is obviously serious in public sector banks. Even if private sector banks fare better, they also have the same problem. The systemic problem of bad loans needs to be addressed.

Paragraph 3: The underlying factors are common. Lending at political behest plagues public sector banks but private sector banks are not immune either. Lending could be driven by corrupt behaviour if bank managers collude with corporate borrowers to collect margins for themselves without assessing risk before extending bad loans. Lending could also be inept if bank managers do not have the ability to assess risk or do not exercise due diligence. These reasons have always existed. The problem is not new. It has just grown rapidly over the past decade.

Paragraph 4: Until the early 2000s, development finance institutions (DFIs) had done much of the lending to corporate entities for investment in the manufacturing or services sectors. These began winding down in 2000 and were closed down in 2005. For a while, companies used retained profits or cash reserves, before turning to external commercial borrowing, the domestic bond market, or equity markets as sources of finance. It was not long before borrowing from commercial banks emerged as an important alternative source of corporate financing. Apart from behest, corrupt or inept lending, some systemic problems arose. Commercial banks simply did not have the capability to assess credit risk on long-term investment lending because they have always been engaged in advancing short-term working capital. Moreover, commercial banks were caught in a maturity mismatch, because they borrowed short from depositors but had to lend long to investors.

Paragraph 5: In countries that are latecomers to industrialization, this role has always been performed by development banks, which meet the investment financing needs of new firms in underdeveloped manufacturing sectors that are not met by capital markets or commercial banks because, in their calculus, the risk is too great. Starting around 1950, this model was adopted not only by several underdeveloped countries in Asia and Latin America seeking to industrialize, but also by Germany and Japan, which were seeking to reconstruct their economies. India was a pioneer in establishing DFIs, its equivalent of development banks elsewhere, to kick-start industrialization.

Q1. What is meant by the statement “It is not audible yet” as used in the passage?

(a) The regulatory policies formulated to evade the situation of financial stress in banking system are not feasible to implement.
(b) Banks are under financial stress which is difficult to overcome.
(c) The scams and scandals in the banking system are still unknown to everyone.
(d) The adversities facing by banking system have not been yet taken into consideration by the regulatory body.
(e) The crises in the banking system are due to weak regulation and governance.

Answer & Explanation
Ans.1.(d)
Exp. We can infer from first paragraph of the passage that sentence (d) is the correct choice.
The recurring failures (scams and scandals) of regulation or governance have not been corrected yet. Hence it needs to be taken into consideration by the regulatory body to avoid this situation.
Hence option (d) is the correct choice.
Refer the lines “There is also a quiet crisis that runs deep. It is not audible yet. But it is mounting, since recurring failures of regulation or governance have not led to any accountability or corrective action.”

Q2. How we can deduce the fact that “privatization is no solution”?

(a) As private sector banks have larger proportion of NPA as compared to public sector banks.
(b) As both public sector and private sector banks are undergoing the rising problem of non- performing assets.
(c) As both public and private sector banks are not capable of resolving their issues.
(d) Both (b) and (c)
(e) All are correct

Answer & Explanation
Ans.2.(b)
Exp. “privatization is no solution” is the fact that we can deduct from second paragraph of the passage. As mentioned in the paragraph that even the gross NPA as a proportion of total assets of private sector banks are better than public sector banks but they are facing the same problem. Hence privatizing the public- sector banks is not a solution.
Options (a) and (c) are incorrect in context to the passage.
This makes option (b) as correct.
Refer the lines “For public sector banks, these proportions were higher at 11.4% and 14.5%, respectively. The problem is obviously serious in public sector banks. Even if private sector banks fare better, they also have the same problem. The systemic problem of bad loans needs to be addressed.”

Q3. According to the passage, How can the problem of Bad Loan in Banking system be avoided?

(I) Banks should mortgage necessary assets of the borrower to avoid the loss.
(II) Asset Quality must be reviewed by RBI strictly and carefully.
(III) Bank managers should have the ability to assess the risks before lending.

(a) Only (I)
(b) Only (III)
(c) Both (II) and (III)
(d) Both (I) and (III)
(e) All are correct

Answer & Explanation
Ans.3.(b)
Exp. Only sentence (III) is correct with respect to the third paragraph of the passage.
Refer the lines “Lending could also be inept if bank managers do not have the ability to assess risk or do not exercise due diligence.”
Hence option (b) is the correct choice.

Q4. How did India plan to start industralisation at faster pace?

(a) by infusing large capital in the banking system
(b) by imposing high interest rate on borrowed sum of money.
(c) by reducing the lending rate to new firms as it is risky.
(d) by investing through development banks.
(e) All are correct

Answer & Explanation
Ans.4.(d)
Exp. Only option (d) is correct according to the last paragraph of the passage where it has been mentioned that India was a pioneer in establishing DFIs to start industralisation.
Hence option (d) is the most appropriate choice.
Refer the lines “India was a pioneer in establishing DFIs, its equivalent of development banks elsewhere, to kick-start industrialization.”

Q5. What is/ are the problem(s) related to commercial borrowings?

(I) maturity mismatch
(II) Not capable to assess credit risk on long term investment lending
(III) corrupt and inept lending

(a) Only (I)
(b) Only (II)
(c) Both (II) and (III)
(d) Both (I) and (III)
(e) All are correct

Answer & Explanation
Ans.5.(e)
Exp. Refer the fourth paragraph of the passage “Apart from behest, corrupt or inept lending, some systemic problems arose. Commercial banks simply did not have the capability to assess credit risk on long-term investment lending because they have always been engaged in advancing short-term working capital. Moreover, commercial banks were caught in a maturity mismatch, because they borrowed short from depositors but had to lend long to investors.”
Hence option (e) is the correct choice.

Directions (6-10): Answer the following questions after rearranging the following sentences into a coherent paragraph and identify the sentence that doesn’t fit into the context of the paragraph.

(A) India can’t ignore the environmental consequences of its rapid growth. Over the last few decades, water-intensive and polluting industries such as textiles, leather, sugar and paper have shifted from developed to developing countries.
(B) They withdraw huge quantities of water and discharge effluents without adequate treatment. Before 1980, countries like the U.K. and the U.S. played a vital role in textile production and export.
(C) Supporters of EKC believe that countries need to reach a particular average income level before they can afford to allocate the resources needed to protect the environment.
(D) India is on the upward part of the environmental Kuznets curve (EKC). For achieving sustainable development, it must move to the next stage. However, it is not wise to wait for that stage.
(E) One of the factors attributed to this shift is that there are relatively less stringent environmental policies in developing nations. Countries like India are now manufacturing products which contribute to pollution for domestic and international markets.
(F) But by 2000, their dominance had substantially reduced and the share of developing countries like India and China had increased.[/su_spoiler]

Q6. Considering statement (D) “India is on the upward part of the environmental Kuznets curve (EKC). For achieving sustainable development, it must move to the second stage. However, it is not wise to wait for that stage” as the first sentence of the rearranged paragraph, then which among the following fails to become the part of coherent paragraph?
(a) C
(b) F
(c) E
(d) B
(e) A

Answer & Explanation
Ans.6.(a)
Exp. Taking a hint from the first statement of the rearranged paragraph, the theme of the paragraph can be deduced which is about the imperativeness of the movement towards sustainable development by several countries. It has also described about the menace caused by pollution in achieving the stage of sustainable development by different countries. All the given statements perfectly belong to the theme of the paragraph except for statement (C). Statement (C) is mentioning about EKC which is a phenomenon that assumes that after the country reaches a certain level of economic development, the quality of its environments begins to improve. It fails to coherently connect with the paragraph. Hence, option (a) becomes the most suitable answer choice.

Q7. Considering statement (D) “India is on the upward part of the environmental Kuznets curve (EKC). For achieving sustainable development, it must move to the second stage. However, it is not wise to wait for that stage” as the first sentence of the rearranged paragraph, then which one among the following can consecutively follow the last statement after the rearrangement (excluding the incoherent one)?
(a) India’s developmental activities are affecting the environment to a considerable extent, through over-exploitation of natural resources and indiscriminate discharge of waste.
(b) However, experiences from the U.S. and Europe reveal that pollution mitigation can yield large gains to human health and the economy.
(c) Pollution is not a disease, it is only a symptom. Hence, its root cause should be investigated.
(d) Hence, pollution leads to the real and potential loss of the overall development opportunity in an economy.
(e) None of these

Answer & Explanation
Ans.7.(a)
Exp. Taking a clue from the first sentence we can deduce that the theme of the paragraph is about the imperativeness of the movement towards sustainable development by several countries. It has also described about the menace caused by pollution in achieving the stage of sustainable development by different countries. The first sentence indicates about the sentence that should follow it. Sentence (D) is describing about the urgency for achieving sustainable development. Therefore, the next sentence should include the reason for such crises. Only sentence (A) connects logically with the first sentence. Statement (B) follows statement (A) as the pronoun “they” in sentence (B) is used for textiles, leather, sugar and paper industries mentioned in statement (A). Moreover, statements (F) and (B) also make a pair as the determiner “their” mentioned in statement (F) is used for the developed countries like U.S and U.K. Thus, the last statement becomes statement (E) of the rearranged paragraph which describes about the cause of the shift in manufacturing harmful products for the environment from developed countries to the developing countries. Hence, the correct sequence of the sentences to form a coherent paragraph is DABFE excluding the incoherent statement (C). Therefore, only option (a) can consecutively follow the last statement of the paragraph as it is further describing the shift of exploitation of natural resources for developmental activities from developed countries to the developing countries like India.

Q8. Among the following pairs which one of them is formed with two consecutive statements after the rearrangement?
(a) A – E
(b) C – E
(c) B – F
(d) A – F
(e) B – C

Answer & Explanation
Ans.8.(c)
Exp. Taking a clue from the first sentence we can deduce that the theme of the paragraph is about the imperativeness of the movement towards sustainable development by several countries. It has also described about the menace caused by pollution in achieving the stage of sustainable development by different countries. Statements (B) and (F) make a pair as the determiner “their” mentioned in statement (F) is used to refer the developed countries like U.S and U.K mentioned in statement (B). Moreover, the conjunction “but” is used to introduce a contrasting statement. Since, statement (B) is describing about the vital role played by developed countries, the usage of “but” in the next statement to introduce a contradiction [their dominance had substantially reduced] is a logical connection. Hence, option (c) is the most viable answer choice.

Q9. Which one among the following sentences can interlink the first and the second sentence of the rearranged paragraph?
(a) For instance, in developing countries, water pollution has not been a major topic of political debate, but political instruments including Environmental Quality Objectives and Uniform Standards are in the political agendas of Western countries.
(b) In developing countries like India, pollution is increasing beyond the carrying capacity of the environment.
(c) The government has largely failed to make people aware of how the pollution affects them, what the main pollutants are, what precautions they should take, the types of masks they should wear, and suchlike.
(d) Wastewater in large cities is let out untreated and flows to large water bodies, where it remains, contaminating surface water.
(e) None of these

Answer & Explanation
Ans.9.(b)
Exp. The correct sequence of the sentences after the rearrangement is DABFE. Sentence (A) that follows sentence (D) is describing about the developmental activities that are causing harmful effects on environment through several industries. Therefore, option (b) is the most suitable choice that can interlink both the statements as it is describing about the deteriorating condition of the environment due to increase in developmental activities leading to pollution. Hence, it becomes the most viable answer choice.

Q10. Considering statement (D) “India is on the upward part of the environmental Kuznets curve (EKC). For achieving sustainable development, it must move to the second stage. However, it is not wise to wait for that stage” as the first sentence of the rearranged paragraph, identify the correct sequence of the sentences to form a coherent paragraph (excluding the incoherent one).
(a) DCBFE
(b) DAEFB
(c) DFEAB
(d) DABFE
(e) DCBEA

Answer & Explanation
Ans.10.(d)
Exp. Taking a clue from the first sentence we can deduce that the theme of the paragraph is about the imperativeness of the movement towards sustainable development by several countries. It has also described about the menace caused by pollution in achieving the stage of sustainable development by different countries. The first sentence indicates about the sentence that should follow it. Sentence (D) is describing about the urgency for achieving sustainable development. Therefore, the next sentence should include the reason for such crises. Only sentence (A) connects logically with the first sentence. Statement (B) follows statement (A) as the pronoun “they” in sentence (B) is used for textiles, leather, sugar and paper industries mentioned in statement (A). Moreover, statements (F) and (B) also make a pair as the determiner “their” mentioned in statement (F) is used for the developed countries like U.S and U.K. Thus, the last statement becomes statement (E) of the rearranged paragraph which describes about the cause for the shift in manufacturing harmful products for the environment from developed countries to the developing countries. Hence, the correct sequence of the sentences to form a coherent paragraph is DABFE excluding the incoherent statement (C). Therefore, option (d) becomes the most suitable answer choice.

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