SBIClerk06Jan2008 Related Question Answers

51. Read the following passage carefully and answer the questions given below it. Certain words are printed in bold to help you to locate them while answering some of the questions.A large majority of the poor in India are outside the formal banking system. The policy of financial inclusion sets out to remedy this by making available a basic banking ‘no frills’ account either with nil or very minimum balances as well as charges that would make such accounts accessible to vast sections of the population. However, the mere opening of a bank account in the name of every household or adult person may not be enough, unless these accounts and financial services offered to them are used by the account holders. At present, commercial banks do not find it viable to provide services to the poor especially in the rural areas because of huge transaction costs, low volumes of savings in the accounts, lack of information on the account holder, etc. For the poor. interacting with the banks with their paper work, economic costs of going to the bank and the need for flexibility in their accounts, make them turn to other informal channels or other institutions. Thus, there are constraints on both the supply and the demand side.Till now, banks were looking at these accounts from a purely credit perspective. Instead, they should look at this from the point of view of meeting the huge need of the poor for savings. Poor households want to save and, contrary to the common perception, do have the funds to save, but lack control. Informal mutual saving systems like the Rotating Savings and Credit Associations (ROSCAs), widespread in Africa, and ‘thrift and credit groups’ in India demonstrate that poor households save. For the poor household, which lack access to the formal insurance system and the credit system, savings provide a safety net and help them tide over crises. Savings can also keep them away from the clutches of moneylenders, make formal institutions more favourable to lending to them, encourage investment and make them shift to more productive activities, as they may invest in slightly more risky activities which have an overall higher rate of return.Research shows the efficacy of informal institutions in increasing the savings of the small account holders. An MFI in the Philippines, which had existing account holders, was studied. They offered new products with ‘commitment features’. One type had withdrawal restrictions in the sense that it required individuals to restrict their right to withdraw any funds from their own accounts until they reached a self-specified and documented goal. The other type was deposit options. Clients could purchase a locked box for a small fee. The key was with the bank and the client has to bring the box to the bank to make the deposit. He could not dip into the savings even if he wanted to. These accounts did not pay extra money and were illiquid. Surprisingly, these products were popular even though these had restrictions. Results showed that those who opted for these accounts with restrictions had substantially greater savings rates than those who did not. The policy of financial inclusion can be a success if financial inclusion focuses onboth saving needs and credit needs, having a diversified product portfolio for the poor but recognising that self-control problems need to be addressed by having commitment devices. The products with commitment features should be optional. Furthermore transaction costs for the poor could be cut down, by making innovative use of technology available and offering mobile vans with ATM and deposit collection features which could visit villages periodically.What is the aim of the financial inclusion policy ?

52. The author’s main objective in writing the passage is to…………..

53. Which of the following can be inferred about products with commitment features ? (A) Demand for such products was high. (B) They were an effective means of increasing the savings of small account holders. (C) Such facilities can only be offered by informal institutions like MFIs.

54. Why do the poor not utilise banking services ? (A) Informal institutions offer higher rates of interest than those in banks. (B) Costs of reaching banks have to be borne by the poor. (C) Bank personnel do not treat the poor respectfully because their savings amounts are minimal.

55. Which of the following is a recommendation made by the author regarding financial inclusion ?

56. Which of the following factors affects ‘savings’ behaviour among the poor? (A) Threats from moneylenders if they avail of banking services. (B) Documentation required before availing of banking services. (C) Lack of self-control.

57. What do the results of the study conducted in the philippines indicate ?

58. What is/are the outcome(s) of encouraging savings for the poor ? (A) It frees them from the exploitation of moneylenders. (B) Banks are more willing to disburse loans to those who save. (C) They should invest in risky but high return ventures.

59. What was the view of banks regarding the bank accounts of the poor in the past ?

60. Choose the word which is most nearly the SAME in meaning to the word printed in bold as used in the passage.Purely

61. Choose the word which is most nearly the SAME in meaning to the word printed in bold as used in the passage.Demonstrate

62. Choose the word which is most nearly the SAME in meaning to the word printed in bold as used in the passage.Remedy

63. Choose the word which is most OPPOSITE in the meaning of the word printed in bold as used in the passage.Optional

64. Choose the word which is most OPPOSITE in the meaning of the word printed in bold as used in the passage.Accessible

65. Read each of the following sentences to find out whether there is any error in it. The error; If any, will be in one part of the sentence. The number of that part is the answer. If there is no error; the answer is e:. (Ignore errors of punctuation, if any).The scheme failed because (a)/ some states could not, (b)/ manage not to raise (c)/the necessary funds. (d)/ No error (e)

66. Real estate prices in the (a)/ business district of the city (b)/ are expected to rise (c)/ at 15% this year. (d)/ No error (e)

67. By so early as next year (a)/ that leading investment bank (b)/ has plants to open (c)/ an office in New Delhi. (d)/ No error (e)

68. There is lots of (a)/ supports from the employees (b)/ for the proposal to (c)/ merge with the parent company. (d)/ No error (e)

69. Experts have recommended that (a)/ the government reconsidered (b)/ restrictions imposed on foreign (c)/ investment in real estate. (d)/ No error (e)

70. The crucial point to (a)/ be discussed at the (b)/ meeting is how to (a)/ well implement the policy. (d)/ No error (e)

71. He wants to (a)/ set up a laboratory (b)/ to undertake research (c)/ into a vaccine for cancer. (d)/ No error (e)

72. According to him (a)/ two factors which are (b)/ needy for success (c)/ are discipline and diligence. (d)/ No error (e)

73. Because of the pace at (a)/ which the company is growing (b)/ I believe it will easily (c)/ achieve their target. (d)/ No error (e)

74. It is truth (a)/ that India is (b)/ the largest consumer of (c)/ gold in the world. (d)/ No error (e)

75. Which of the phrases at a, b, c and d. given below should replace the phrase given in bold in the following sentence to make the sentence grammatically meaningful and correct If the sentence is correct as it is and ‘No correction is required’, mar* e: as the answerThe bank is overstaffed, has led to low productivity.

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