Model Questions for UPSC PRE CSAT PAPER SET - 25
Passage: Instruction for question- read the following passage and
answer the questions that follow. Your answers to the questions should be based
on the passage only.
Reserve Bank of India deputy governor K.C. Chakrabarty maintained the while
high interest rate was not solely responsible for the economic slowdown. High
inflation was definitely one of the reasons for the sluggish growth, interacting
with journalistic on the growth, inflation issues at an assoc ham event, Dr.
Chakrabarty said, “ slowdown in the growth is for a variety of reasons what we
are trying to say is the interest rate is not the only reason for the slowdown
in growth. But inflation is definitely a reason for slowing down the growth”
Dr. chakrabarty also went on to admit that in a way, monetary policy was also
responsible for the tepid growth in that it was unable to contain inflation .yes
to the extent monetary policy is not responsible. We cannot say something wrong
happening in the economy, we are not responsible, collectively we are all
responsible. In his address at the event, exhorted banks to provide credit to
the productive sectors of the economy and not shy away from given loans to them
in view of their own rising NPAs (non performing assets).
Because of NPA fear banks need not stop lending but banks must improve their
credit management capability for which there is enough scope when NPAs are high,
your risk management system has to be improved. Dr. Chakrabarty said while
pointing out that banks need to pay more attention to the credit need of
agriculture and SMEs. Dwelling further on the NPA issue, Dr Chakrabarty sought
to blame the corporate for most of the rising bad loans and for which the honest
borrows have to pay more NPA is creation of the corporate sector, a major part
of NPA. You borrow from banks. You don’t.’ pay them in time they because NPA in
the books of the books, so why you are not able to pay back. Because your cost
is more and income is less.
1. Which one of the following statements conveys the inference of the
passage?
(a) High inflations is definitely one of the reasons for sluggish growth
(b) Monetary policy is also a reason for the tepid growth
(c) Corporates are mainly to blame for NPA issue
(d) Monetary policy is not effective enough to check inflation
2. Consider the following statements with reference to the passage.
1. Honest borrowers will have to pay less in the corporates were able to
bring down the risk perception of the banks
2. There is a complete policy paralysis on growth of inflation issue for which
collectively we are all responsible
(a) Only1
(b) Only 2
(c) Both are correct
(d) Both incorrect
3. According to the passage, the economic growth can be effected by
focusing on
(a) check on high interest rate
(b) effective monetary policy
(c) lowering of inflation rate
(d) improvement in risk management
4. According to the passage what could be the obstacles to the high
economic growth?
1. The NPA fear of the Banks created by the corporate
2. High interest rates
3. High inflation
4. Ineffective monetary policy
(a) Only 1 and 2
(b) 2, 3 and 4
(c) 1, 3 and 4
(d) All
5. According to the passage banks need to pay more attention on
(a) their credit management capability
(b) their credit appraisal system
(c) their risk management system
(d) credit needs of agriculture SMECs ( small and medium enterprises) and retail
