Directions(1-10): Read the passage and answer the question given below.
� The Indian banking system is characterized by a large number of banks with mixed ownership. The commercial banking segment comprises 27 public sector banks in which the Government has majority ownership, 40 private sector banks, and 33 foreign banks. Total bank assets constituted a little over 70 percent of GDP, in 2003-04, and public sector banks had 75 percent of the assets of the banking system.
� Prior to the initiation of financial sector reforms in 1992, the Indian financial system essentially catered to the needs of planned development and the government sector had a predominant role in every sphere of economic activity. The preemption of a large proportion of bank deposits in the form of reserves and an administered interest rate regime resulted in high-cost and low-quality financial inter mediation. The existence of a complex structure of interest rates arising from economic and social concerns about providing concessional credit to certain sectors resulted in cross subsidization, which implied that higher rates were charged to non-concessional borrowers. The system of administered interest rates was characterized by detailed regulatory prescriptions on lending and deposits, leading to a multiplicity of interest rates. As a result, the spreads between deposit and lending rates of commercial banks increased, and the administered lending rates did not factor in credit risk. The lack of transparency, accountability, and prudential norms in the operations of the banking system led also to a rising burden of non-performing assets. On the expenditure front, inflexibility in licensing of branches and management structures constrained the operational independence and functional autonomy of banks and raised overhead costs. The financial environment during this period was characterized by segmented and underdeveloped financial markets. This resulted in a distortion of interest rates and the inefficient allocation of scarce resources.
� The period 1992-97 saw the implementation of prudential norms pertaining to capital adequacy, income recognition, asset classification, provisioning, and exposure norms. As a consequence of the reforms, public sector banks’ share of total assets in the banking system was reduced from 90 percent to 75 percent between 1991 and 2004.
� The entry of new banks in the private sector reduced asset concentration, which may have strengthened competition. The general notion is that competition enhances efficiency. This may not always be true. It is also argued that increased competition may lead to excessive risk-taking. Others have argued that concentration/consolidation is needed to gain economies of scale and scope so that increased concentration leads to efficiency improvements. A number of factors make the banking sector in India an interesting case study. India underwent liberalization of the banking sector with the objective of enhancing efficiency, productivity, and profitability. It is interesting to examine if diversification of public sector banks and penetration of private and foreign banks have had an impact on competition
1. What is the central idea of the passage?
1. Competition in Indian banking sector in pre and post economic reforms of 1992
2. Concerns about the pre-economic reforms of 1992 in Indian banking sector and the promising alternatives
3. Shift from administered and regulated Indian banking to liberalised banking and effect on competition
4. Comparison between the administered policies and market forces affecting the operational efficiency of the Indian banking sector
5. Transformation of the Indian banking sector from public-owned to private sector owned
2. What was the reason for inferior financial inter mediation before the economic reforms in India?
1. The administration of interest structure was not fully developed.
2. Indian economy was burdened with heavy subsidies which resulted into high-cost loans.
3. The credit disbursement procedures were of low quality and below global standards.
4. The interest rates were fixed by the government and not by the market forces.
5. The majority of the Indian banking sector was dominated by public sector banks.
3. What was the impact of giving lower interest rate to certain sections of the society?
1. It resulted in over-charging of interest rates from the subsidized sector.
2. It helped in providing subsidy to the deserving sector.
3. A section of the borrowers had to bear higher interest rates.
4. A large section of society received interest free credit for some period.
5. The surplus reserves of the banks were utilised for the betterment of the society.
4. Which of the following options is the reason behind increased running costs of the banks?
1. The banks were more focused towards concessional credit which deprived them of the potential earning.
2. The rigidity of the banking structure and the lack of freedom caused the costs to go up.
3. The number of branches being few resulted in decreased performance and higher costs.
4. The operational managers were not independent enough to curtail expenses.
5. The regulatory restrictions on the banks did not allow them to fix interest rates and cover the expenditures.
5. Which of following can undermine the benefits of liberalization in Indian banking sector?
1. It can create multiple interest rates in the economy.
2. It can increase the spread between deposit and lending rates of commercial banks.
3. It can cause concentration of assets, thus depriving of the economies of scale.
4. It can lead to higher competition with the entrance of foreign banks.
5. It can expose the banks to more chances of loss and damage.
6. Which of following is/are correct in the context of the given passage?
I. Public sector banks held 90% of the assets in banking system before reforms of 1992.
II. Licensing of new branches led to increased overhead costs.
III. Efficiency can be brought into banking sector through competition and not through consolidation of assets.
1. Only I
2. Only I and II
3. Only I and III
4. Only II and III
5. All three I, II and III
7. Directions: Choose the word/group of ords which is most similar in meaning to the word printed in bold as used in the passage. “Preemption”
1. Prediction
2. Appropriation
3. Prevention
4. Assumption
5. Probation
8. Directions: Choose the word/group of words which is most similar in meaning to the word printed in bold as used in the passage. “Prudential”
1. Conservative
2. Shrewd
3. Sanity
4. Lucid
5. Reckless
9. Directions: Choose the word/group of words which is most opposite in meaning to the word printed in bold as used in the passage. “Segmented”
1. Aligned
2. Amalgamated
3. Associated
4. Attached
5. Affiliated
10. Directions: Choose the word/group of words which is most opposite in meaning to the word printed in bold as used in the passage. “Penetration”
1. Withdrawal
2. Entrance
3. Cancellation
4. Abscondment
5. Shift
Directions(11-15): Rearrange the following sentences (A), (B), (C), (D) and (E) to make a meaningful paragraph and then answer the question that follows.
A. Many people believe that it is cruel to make use of animals for laboratory studies.
B. It is in view of these facts that the government of India has banned the export of monkeys from America.
C. They point out that animals too, have nervous systems like us and can feel pain.
D. Monkeys, rabbits, mice and other animals are used in large numbers by scientists and many of them are made to suffer diseases artificially produced in them.
E. We can avoid such cruelty to animals if we use alternative methods such as tissue culture, gas chromatography and chemical techniques.
11. Which shall be the FIFTH sentence after rearrangement?
1. A
2. B
3. C
4. D
5. E
12. Which shall be the FOURTH sentence after rearrangement?
1. A
2. B
3. C
4. D
5. E
13. Which shall be the THIRD sentence after rearrangement?
1. A
2. B
3. C
4. D
5. E
14. Which shall be the SECOND sentence after rearrangement?
1. A
2. B
3. C
4. D
5. E
15. Which shall be the FIRST sentence after rearrangement?
1. A
2. B
3. C
4. D
5. E
Directions(16-20): Read the passage having some numbered blanks.
I don’t think we care about getting things absolutely right. Small silly mistakes – the sort that could easily be eliminated – creep into everything we do. In fact, it happens all the time. Yet no one objects. We accept the inaccurate, we tolerate the careless, we ___(1)____ the mistaken. God alone knows why. No doubt there are high-flown psychological explanations, ___(2)___ in our sociology or, at least, our society, but the fact of the matter is they don’t change anything. We continue as we are. We happily, cheerfully ___(3)____ along, not quite right but also never really horribly wrong. Of course, our __(4)___ for getting things wrong is not simply restricted to spelling mistakes, failing to change names or ___(5)____ overlooking the need to update and refresh. Sometimes we just don’t realise what we are doing or, worse, what we’re saying. The result can be hilarious.
16. Fill in the blank (1)?
1. disregard
2. Condone
3. loathe
4. censure
5. accommodate
17. Fill in the blank (2)?
1. assumed
2. Inveterate
3. rooted
4. boomed
5. burgeoned
18. Fill in the blank (3)?
1. fail
2. Stumble
3. Flounder
4. dance
5. irk
19. Fill in the blank (4)?
1. discretion
2. Intention
3. fallacy
4. penchant
5.conduct
20. Fill in the blank (5)?
1. blithely
2. Overtly
3. deliberately
4. concisely
5. conceivably
Directions(21-25): Read the sentence to find out whether there is any grammatical error or idiomatic error in it. The error, if any, will only be in one part of the sentence. The number of that part is the answer. If there is no error, the answer is (5). (Ignore errors of punctuation, if any.)
21. (1) The boy would not/ (2) have been careless as/ (3) to leave the/ (4) door of the stable unbolted/ (5) No error
1. (1)
2. (2)
3. (3)
4. (4)
5. (5)
22. (1) Many a questions/ (2) that appeared in the question paper/ (3) were too difficult/ (4) to solve./ (5) No error
1. (1)
2. (2)
3. (3)
4. (4)
5. (5)
23. (1) Everyone was surprised to know/ (2) that Rahim had managed to marry a/ (3) girl who was/ (4) more beautiful and more tall than Rani./ (5) No error.
1. (1)
2. (2)
3. (3)
4. (4)
5. (5)
24. (1) Hardly she likes/ (2) to hear my name being taken,/ (3) after the dispute/ (4) which occurred between us last year./ (5) No error
1. (1)
2. (2)
3. (3)
4. (4)
5. (5)
25. (1) Four years have passed/ (2) that I retired from/ (3) the army and/ (4) settled here./ (5) No error
1. (1)
2. (2)
3. (3)
4. (4)
5. (5)
