Write off of irrecoverable loans and advances: ?->(Show Answer!)

1. Write off of irrecoverable loans and advances:

Answer: Art. 265 kfc vol I.

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MCQ-> In the following questions, read the following passage carefully and answer the questions given below it. Certain words/phrases are given in bold to help you locate them while answering some of the questions. Over the past few days alone. the China’s central bank has pumped extra cash into the financial system and cut interest rates. The aim is to free more cash for banks to lend and provide a boost for banks seeking to improve the return on their assets. The official data though, suggested that bad loans make up only 1.4% of their balance sheets. How to explain the discrepancy? One possible answer is that bad loans are a tagging indicator i.e. it is only after the economy has struggled for while that borrowers began to suffer. Looked at this way, China is trying to anticipate problems keeping its banks in good health by susteining economic growth of nearly 7% year on year. Another more worrying possibility is that bad loans are worse than official data indicate. This does not look to be the cause for China’s biggest banks, which are managed conservatively and largely focus on the county’s biggest value and quality borrowers. But there is mounting evidence that when it comes to smaller banks, especially those yet to list on the stock market, bad loans piling up. That is important because unlisted lenders account for just over a third of the Chinese banking sector, making them as big as Japan’s entire banking industry. Although, non-performing loans have edged up slowly, the increase in specialmention loans (a category that includes those overdue but not yet classified as impaired loans.) has been much bigger. Special-mention loans are about 2% at most of China’s big listed banks, suggesting that such loans must be much higher at their smaller, unlisted peers. Many of these loans are simple bad debts which banks have not yet admitted to. Another troubling fact is that fifteen years ago, the government created asset-management companies (often referred to as badbanks) to take on the non-performing loans of the lenders. After the initial transfer these companies had little to pay. But, last year, Cinda, the biggest of the bad banks, bought nearly 150 billion Yuan ($24 billion) of distressed assets last year, two-thirds more than in 2013. These assets would have raised the banks badloans ratio by a few tenths of a percentage point. Although such numbers do not seem very alarming, experts who reviewed last year’s results for 158 banks, of which only 20 are listed found that “shadow loans”, loans recorded as investments which may be a disguise for bad loans have grown to as much as 5.7 billion Yuan, or 5 of the industry’s assets. These are heavily concentrated on the balance sheets of smaller-unlisted banks, and at the very least, all this points to a need for recapitalisation of small banks.Choose the word which is most nearly the same in meaning to the word ‘TAGGING’ given in bold as used in the passage....

MCQ-> Read the following passage carefully and answer the questions given at the end.Passage 4Public sector banks (PSBs) are pulling back on credit disbursement to lower rated companies, as they keep a closer watch on using their own scarce capital and the banking regulator heightens its scrutiny on loans being sanctioned. Bankers say the Reserve Bank of India has started strictly monitoring how banks are utilizing their capital. Any big-ticket loan to lower rated companies is being questioned. Almost all large public sector banks that reported their first quarter results so far have showed a contraction in credit disbursal on a year-to-date basis, as most banks have shifted to a strategy of lending largely to government-owned "Navratna" companies and highly rated private sector companies. On a sequential basis too, banks have grown their loan book at an anaemic rate.To be sure, in the first quarter, loan demand is not quite robust. However, in the first quarter last year, banks had healthier loan growth on a sequential basis than this year. The country's largest lender State Bank of India grew its loan book at only 1.21% quarter-on-quarter. Meanwhile, Bank of Baroda and Punjab National Bank shrank their loan book by 1.97% and 0.66% respectively in the first quarter on a sequential basis.Last year, State Bank of India had seen sequential loan growth of 3.37%, while Bank of Baroda had seen a smaller contraction of 0.22%. Punjab National Bank had seen a growth of 0.46% in loan book between the January-March and April-June quarters last year. On a year-to-date basis, SBI's credit growth fell more than 2%, Bank of Baroda's credit growth contracted 4.71% and Bank of India's credit growth shrank about 3%. SBI chief Arundhati Bhattacharya said the bank's year-to-date credit growth fell as the bank focused on ‘A’ rated customers. About 90% of the loans in the quarter were given to high-rated companies. "Part of this was a conscious decision and part of it is because we actually did not get good fresh proposals in the quarter," Bhattacharya said.According to bankers, while part of the credit contraction is due to the economic slowdown, capital constraints and reluctance to take on excessive risk has also played a role. "Most of the PSU banks are facing pressure on capital adequacy. It is challenging to maintain 9% core capital adequacy. The pressure on monitoring capital adequacy and maintaining capital buffer is so strict that you cannot grow aggressively," said Rupa Rege Nitsure, chief economist at Bank of Baroda.Nitsure said capital conservation pressures will substantially cut down "irrational expansion of loans" in some smaller banks, which used to grow at a rate much higher than the industry average. The companies coming to banks, in turn, will have to make themselves more creditworthy for banks to lend. "The conservation of capital is going to inculcate a lot of discipline in both banks and borrowers," she said.For every loan that a bank disburses, some amount of money is required to be set aside as provision. Lower the credit rating of the company, riskier the loan is perceived to be. Thus, the bank is required to set aside more capital for a lower rated company than what it otherwise would do for a higher rated client. New international accounting norms, known as Basel III norms, require banks to maintain higher capital and higher liquidity. They also require a bank to set aside "buffer" capital to meet contingencies. As per the norms, a bank's total capital adequacy ratio should be 12% at any time, in which tier-I, or the core capital, should be at 9%. Capital adequacy is calculated by dividing total capital by risk-weighted assets. If the loans have been given to lower rated companies, risk weight goes up and capital adequacy falls.According to bankers, all loan decisions are now being assessed on the basis of the capital that needs to be set aside as provision against the loan and as a result, loans to lower rated companies are being avoided. According to a senior banker with a public sector bank, the capital adequacy situation is so precarious in some banks that if the risk weight increases a few basis points, the proposal gets cancelled. The banker did not wish to be named. One basis point is one hundredth of a percentage point. Bankers add that the Reserve Bank of India has also started strictly monitoring how banks are utilising their capital. Any big-ticket loan to lower rated companies is being questioned.In this scenario, banks are looking for safe bets, even if it means that profitability is being compromised. "About 25% of our loans this quarter was given to Navratna companies, who pay at base rate. This resulted in contraction of our net interest margin (NIM)," said Bank of India chairperson V.R. Iyer, while discussing the bank's first quarter results with the media. Bank of India's NIM, or the difference between yields on advances and cost of deposits, a key gauge of profitability, fell in the first quarter to 2.45% from 3.07% a year ago, as the bank focused on lending to highly rated customers.Analysts, however, say the strategy being followed by banks is short-sighted. "A high rated client will take loans at base rate and will not give any fee income to a bank. A bank will never be profitable that way. Besides, there are only so many PSU companies to chase. All banks cannot be chasing them all at a time. Fact is, the banks are badly hit by NPA and are afraid to lend now to big projects. They need capital, true, but they have become risk-averse," said a senior analyst with a local brokerage who did not wish to be named.Various estimates suggest that Indian banks would require more than Rs. 2 trillion of additional capital to have this kind of capital adequacy ratio by 2019. The central government, which owns the majority share of these banks, has been cutting down on its commitment to recapitalize the banks. In 2013-14, the government infused Rs. 14,000 crore in its banks. However, in 2014-15, the government will infuse just Rs. 11,200 crore.Which of the following statements is correct according to the passage?
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MCQ-> Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you locate them while answering some of the question. Political ploys initially hailed as master-strokes often end up as flops. The Rs. 60,000 crore farm loan waiver announced in the budget writes off 100% of overdues of small and marginal farmers holding upto two hectares, and 25% of overdues of larger farmers. While India has enjoyed 8%-9% GDP growth for the past few years, the boom has bypassed many rural areas and farmer distress and suicides have made newspaper headlines. Various attempts to provide relief (employment guarantee scheme, public distribution system) have made little impact, thanks. to huge leakages from the government’s lousy delivery systems. So, many economists think the loan waiver is a worthwhile alternative to provide relief. However the poorest rural folk are landless labourers, who get neither farm loans nor waivers. Half of the small and marginal farmers get no loans from banks and depend entirely on money-lenders, and will not benefit. Besides, rural India is full of the family holdings rather than individual holdings and family holdings will typically be much larger than two hectares even for dirt-poor farmers, who will, therefore, be denied the 100% waiver. It will thus fail in both economic and political objectives. IRDP loans to the rural poor in the 1980s demonstrated that crooked bank officials demand bribes amounting to one-third the intended benefits. Very few of the intended beneficiaries who merited relief received it. After the last farm loan waiver will Similarly slow down fresh loans to deserving farmers. While overdues to cooperatives may be higher, economist Surjit Shalla says less than 5% of farmer loans to banks are overdue i.e. overdues exist for only 2.25 million out of 90 million farmers. If so, then the 95% who have repaid loans will not benefit. They will be angry at being penalised for honesty. The budget thus grossly overestimates the number of beneficiaries, It also underestimates the negative effects of the waiver-encouraging willful default in the future and discouraging fresh bank lending for some years. nstead of trying to reach the needy, through a plethora of leaky schemes we should transfer cash directly to the needy using new technology like biometric smart cards, which are now being used in many countries, and mobile phones bank accounts. Then benefits can go directly to phone accounts operable only by those with biometric cards, ending the massive leakages of current schemes. The political benefits of the loan waiver have also been exaggerated since if only a small fraction of farm families benefit, and many of these have to pay bribes to get the actual benefit, will the waiver really be a massive vote- winner? Members of joint families will feel aggrieved that, despite having less than one hectare per head, their family holding is too large. Lo qualify for the 100% waiver. Alliance ministers, of central or state governments, give away freebies in their last budgets, hoping to win electoral regards, Yet, four-fifth of all incumbent governments are voted out. This shows that beneficiaries of favours are not notably grateful, while those not so favoured may feel aggrieved, and vote for the opposition. That seems to be why election budgets constantly fail to win elections in India and the loan waiver will not change that pattern.Why do economists feel that loan waivers will benefit farmers in distress?
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MCQ-> Read the following passage carefully and answer the questions given at the end.The movement to expel the Austrians from Italy and unite Italy under a republican government had been gaining momentum while Garibaldi was away. There was a growing clamour, not just from Giuseppe Mazzini's republicans, but from moderates as well, for a General capable of leading Italy to independence. Even the King of Piedmont, for whom Garibaldi was still an outlaw under sentence of death, subscribed to an appeal for a sword for the returning hero. Meanwhile, the 'year of revolutions', 1848, had occurred in which Louis Philippe had been toppled from the French throne. In Austria, an uprising triggered off insurrections in Venice and Milan, and the Austrian garrisons were forced out. The King of Piedmont, Charles Albert ordered his troops to occupy these cities. There had also been insurrections in Sicily, causing the King Ferdinand II, to grant major constitutional freedoms in 1849, prompting both the Pope and Charles Albert to grant further concessions.Meanwhile, largely ignorant of these developments, Garibaldi was approaching Italy at a leisurely pace, arriving at Nice on 23 June 1848 to a tumultuous reception. The hero declared himself willing to fight and lay down his life for Charles Albert, who he now regarded as a bastion of Italian nationalism.Mazzini and the republicans were horrified, regarding this as outright betrayal: did it reflect Garibaldi's innate simple-mindedness, his patriotism in the war against Austria, or was it part of a deal with the monarchy? Charles Albert had pardoned Garibaldi, but to outward appearances he was still very wary of the General and the Italian Legion he had amassed of 150 'brigands'. The two men met near Mantua, and the King appeared to dislike him instantly. He suggested that Garibaldi's men should join his army and that Garibaldi should go to Venice and captain a ship as a privateer against the Austrians.Garibaldi, meanwhile, met his former hero Mazzini for the first time, and again the encounter was frosty. Seemingly rebuffed on all sides, Garibaldi considered going to Sicily to fight King Ferdinand II of Naples, but changed his mind when the Milanese offered him the post of General - something they badly needed when Charles Albert's Piedmontese army was defeated at Custoza by the Austrians. With around 1,000 men, Garibaldi marched into the mountains at Varese, commenting bitterly: 'The King of Sardinia may have a crown that he holds on to by dint of misdeeds and cowardice, but my comrades and I do not wish to hold on to our lives by shameful actions'.The King of Piedmont offered an armistice to the Austrians and all the gains in northern Italy were lost again. Garibaldi returned to Nice and then across to Genoa, where he learned that, in September 1848, Ferdinand II had bombed Messina as a prelude to invasion - an atrocity which caused him to be dubbed 'King Bomba'. Reaching Livorno he was diverted yet again and set off across the Italian peninsula with 350 men to come to Venice's assistance, but on the way, in Bologna, he learned that the Pope had taken refuge with King Bomba. Garibaldi promptly altered course southwards towards Rome where he was greeted once again as a hero. Rome proclaimed itself a Republic. Garibaldi's Legion had swollen to nearly 1,300 men, and the Grand Duke of Tuscany fled Florence before the advancing republican force.However, the Austrians marched southwards to place the Grand Duke of Tuscany back on his throne. Prince Louis Napoleon of France despatched an army of 7,000 men under General Charles Oudinot to the port of Civitavecchia to seize the city. Garibaldi was appointed as a General to defend Rome.The republicans had around 9,000 men, and Garibaldi was given control of more than 4,000 to defend the Janiculum Hill, which was crucial to the defence of Rome, as it commanded the city over the Tiber. Some 5,000 well-equipped French troops arrived on 30 April 1849 at Porta Cavallegeri in the old walls of Rome, but tailed to get through, and were attacked from behind by Garibaldi, who led a baton charge and was grazed by a bullet slightly on his side. The French lost 500 dead and wounded, along with some 350 prisoners, to the Italians, 200 dead and wounded. It was a famous victory, wildly celebrated by the Romans into the night, and the French signed a tactical truce.However, other armies were on the march: Bomba's 12,500-strong Neapolitan army was approaching from the south, while the Austrians had attacked Bologna in the north. Garibaldi too, a force out of Rome and engaged in a flanking movement across the Neapolitan army's rear at Castelli Romani; the Neapolitans attacked and were driven off leaving 50 dead. Garibaldi accompanied the Roman General, Piero Roselli, in an attack on the retreating Neapolitan army. Foolishly leading a patrol of his men right out in front of his forces, he tried to stop a group of his cavalry retreating and fell under their horses, with the enemy slashing at him with their sabres. He was rescued by his legionnaires, narrowly having avoided being killed, but Roselli had missed the chance to encircle the Neapolitan army.Garibaldi boldly wanted to carry the fight down into the Kingdom of Naples, but Mazzini, who by now was effectively in charge of Rome, ordered him back to the capital to face the danger of Austrian attack from the north. In fact, it was the French who arrived on the outskirts of Rome first, with an army now reinforced by 30,000. Mazzini realized that Rome could not resist and ordered a symbolic stand within the city itself, rather than surrender, for the purposes of international propaganda and to keep the struggle alive, whatever the cost. On 3 June the French arrived in force and seized the strategic country house, Villa Pamphili.Garibaldi rallied his forces and fought feverishly to retake the villa up narrow and steep city streets, capturing it, then losing it again. By the end of the day, the sides had 1,000 dead between them. Garibaldi once again had been in the thick of the fray, giving orders to his troops and - fighting, it was said, like a lion. Although beaten 'off for the moment, the French imposed a siege in the morning, starving the city of provisions and bombarding its beautiful centre.On 30 June the French attacked again in force, while Garibaldi, at the head of his troops, fought back ferociously. But there was no prospect of holding the French off indefinitely, and Garibaldi, decided to take his men out of the city to continue resistance in the mountains. Mazzini fled to Britain while Garibaldi remained to fight for the cause. He had just 4,000 men, divided into two legions, and faced some 17,000 Austrians and Tuscans in the north, 30,000 Neapolitans and Spanish in the south, and 40,000 French in the west. He was being directly pursued by 8,000 French and was approaching Neapolitan and Spanish divisions of some 18,000 men. He stood no chance whatever. The rugged hill country was ideal, however, for his style of irregular guerrilla warfare, and he manoeuvred skilfully, marching and counter-marching in different directions, confounding his pursuers before finally aiming for Arezzo in the north. But his men were deserting in droves and local people were hostile to his army: he was soon reduced to 1500 men who struggled across the high mountain passes to San Marino where he found temporary. refuge.The Austrians, now approaching, demanded that he go into exile in America. He was determined to fight on and urged the ill and pregnant Anita, his wife, to stay behind in San Marino, but she would not hear of it. The pair set off with 200 loyal soldiers along the mountain tracks to the Adriatic coast, from where Garibaldi intended to embark for Venice which was still valiantly holding out against the Austrians. They embarked aboard 13 fishing boats and managed to sail to within 50 miles of the Venetian lagoon before being spotted by an Austrian flotilla and fired upon.Only two of Garibaldi's boats escaped. He carried Anita through the shallows to a beach and they moved further inland. The ailing Anita was placed in a cart and they reached a farmhouse, where she died. Her husband broke down into inconsolable wailing and she was buried in a shallow grave near the farmhouse, but was transferred to a churchyard a few days later. Garibaldi had no time to lose; he and his faithful companion Leggero escaped across the Po towards Ravenna.At last Garibaldi was persuaded to abandon his insane attempts to reach Venice by sea and to return along less guarded routes on the perilous mountain paths across the Apennines towards the western coast of Italy. He visited his family in Nice for an emotional reunion with his mother and his three children - but lacked the courage to tell them what had happened to their mother.Find the correct statement:
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MCQ-> Study the following information carefully and answer the questions given below :Seven people N, K, T, B, M, W and R have their weekly offs on different days of the week i.e. Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday not necessarily in that order. Each of them has a liking for different cuisine i.e. Indian, Italian, Mexican, Chinese, Spanish, Continental and Thai, not necessarily in that order. K likes Thai food and gets his weekly off on Thursday. B likes Italian food and does not have off on Sunday. M has weekly off on Saturday and R has his weekly off on Tuesday. W likes continental food whereas the one who has weekly off on Monday likes Mexicancuisine. T does not like Spanish cuisine and has weekly off on Wednesday. The one who likes Indian food does not have a weekly off on Tuesday or Wednesday.Who has a weekly off on Friday ?
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