1
CROPORATION BANK (YEAR – 2004)
Directions (1-15): Read the following passage carefully and answer the questions given below it. Certain
words/phrases in the passage are given in bold to help you locate them while answering some of the
questions.
Banking sector reforms in India were introduced in order to improve efficiency in the process of
financial intermediation. It was expected that banks would take advantage of the changing operational
environment and improve their performance. Towards this and, the Reserve Bank of India initiated a host
of measures for the creation of a competitive environment. Deregulation of interest rates on both the
deposit and lending sides imparted freedom to banks to appropriately price their products and services. To
complete effectively with non-banking entities, banks were permitted to undertake newer activities like
investment banking, securities trading and insurance business. This was facilitated through amendments in
the relevant Acts which permitted PSBs to raise equity from the market up to threshold limit (49 per cent)
and also enabling the entry of new private and foreign banks. This changing face of banking led to an
erosion of margins on traditional banking business, promoting banks to search for newer activities to
augment their fee incomes. At the same time, banks also needed to devote focused attention to
operational efficiency in order to contain their transaction costs. Simultaneously with the deregulation
measures prudential norms were instituted to strengthen the safety and soundness of the banking system.
Recent internal empirical research found that over the period 1992-2003, there has been a discernible
improvement in the efficiency of Indian banks. The increasing trend in efficiency has been fairy uniform,
irrespective of the ownership pattern. The rate of such improvement has, however, not been sufficiently
high. The analysis also reveals that PSBs and private sector banks in India did not differ significantly in
terms of their efficiency measures. Foreign bank, on the other hand, recorded higher efficiency as
compared with their Indian counterparts.
1. Which of the following is/are the measure(s) b) Containing the non-performing assets
taken by Reserve Bank of India to create a c) Strengthening the soundness of banking
competitive environment in the Banking sector? system
d) Improving the customer service
(i) Banks were given freedom to take up newer
e) None of these
activities.
3. Banking sector reforms in India were
(ii) Entry of new private and foreign banks in the
introduced for the purpose of
field.
(a) Giving more and more employment
(iii) Amendments in the relevant Acts to enable
opportunities to the educated unemployed
PSBs to raise equity from the market.
(b) Taking care of the downtrodden masses
(a) None (b) I & ii only (c) I & iii only
(c) Increasing efficiency in the banking activities
(d) ii & iii only (e) All the three
(d) Giving better return to the central
2. Prudential norms were initiated in the banking
Government
sector with a view to
(e) None of these
a) Increasing operational efficiency
, 2
4. Banks can control their transaction costs by (c) Reduction in margins on banking business
(a) Restricting their lending activities (d) Formation of militant unions in the banks
(b) Undertaking more and more non-banking (e) None of these
activities
8. What is the position of Indian banks as far as
(c) Encouraging the customers to bank with other efficiency is concerned?
banks
(a) The Indian banks did not bother about
(d) Devoting more attention to operational efficiency.
efficiency
(b) Compared to foreign counters parts, Indian
(e) None of these banks lagged behind in efficiency.
5. The recent internal empirical research (c) The position of Indian banks cannot be
conducted by the RBI found that estimated due to various factors.
(a) There is cut-throat competition in banking (d) Indian banks accorded high efficiency.
industry.
(e) None of these
(b) The rate of return is not commensurate with
9. Which of the following can be the most
the operational cost.
appropriate title to the passage?
(c) The rate of improvement has not been high.
(a) Indian Banks and foreign Banks
(d) Nationalised banks private sector banks did
(b) Customer Service in Banking Industry
differ in the efficiency measures.
(c) Non-performing Assets in banking sector
(e) None of these
(d) Efficiency in Indian Banking
6. Which of the following statements recognizing
improvement in efficiency is TRUE in the context (e) RBI as a Regulatory Body
of the passage?
Directions (10-13): Choose the word which
(a) There is no discernible difference in efficiency is most nearly the SAME in meaning as the word
parameters. printed in bold as used in the passage.
(b) The foreign banks recorded higher efficiency. 10. RELEVANT
(c) The efficiency of foreign banks is not (a) Recorded (b) opposite (c) appropriate
comparable with Indian banks.
(d) Stringent (e) germane
(d) The rate of such improvement in efficiency
was very higher. 11. AUGMENT
(e) None of these (a) Make (b) become (c) enlarge
7. Changing face of banking led to (d) Increase (e) envelop
(a) Closure of several banks in the country 12. DEVOTE
(b) Entry of private banks and foreign banks (a) Activate (b) apply (c) apportion
CROPORATION BANK (YEAR – 2004)
Directions (1-15): Read the following passage carefully and answer the questions given below it. Certain
words/phrases in the passage are given in bold to help you locate them while answering some of the
questions.
Banking sector reforms in India were introduced in order to improve efficiency in the process of
financial intermediation. It was expected that banks would take advantage of the changing operational
environment and improve their performance. Towards this and, the Reserve Bank of India initiated a host
of measures for the creation of a competitive environment. Deregulation of interest rates on both the
deposit and lending sides imparted freedom to banks to appropriately price their products and services. To
complete effectively with non-banking entities, banks were permitted to undertake newer activities like
investment banking, securities trading and insurance business. This was facilitated through amendments in
the relevant Acts which permitted PSBs to raise equity from the market up to threshold limit (49 per cent)
and also enabling the entry of new private and foreign banks. This changing face of banking led to an
erosion of margins on traditional banking business, promoting banks to search for newer activities to
augment their fee incomes. At the same time, banks also needed to devote focused attention to
operational efficiency in order to contain their transaction costs. Simultaneously with the deregulation
measures prudential norms were instituted to strengthen the safety and soundness of the banking system.
Recent internal empirical research found that over the period 1992-2003, there has been a discernible
improvement in the efficiency of Indian banks. The increasing trend in efficiency has been fairy uniform,
irrespective of the ownership pattern. The rate of such improvement has, however, not been sufficiently
high. The analysis also reveals that PSBs and private sector banks in India did not differ significantly in
terms of their efficiency measures. Foreign bank, on the other hand, recorded higher efficiency as
compared with their Indian counterparts.
1. Which of the following is/are the measure(s) b) Containing the non-performing assets
taken by Reserve Bank of India to create a c) Strengthening the soundness of banking
competitive environment in the Banking sector? system
d) Improving the customer service
(i) Banks were given freedom to take up newer
e) None of these
activities.
3. Banking sector reforms in India were
(ii) Entry of new private and foreign banks in the
introduced for the purpose of
field.
(a) Giving more and more employment
(iii) Amendments in the relevant Acts to enable
opportunities to the educated unemployed
PSBs to raise equity from the market.
(b) Taking care of the downtrodden masses
(a) None (b) I & ii only (c) I & iii only
(c) Increasing efficiency in the banking activities
(d) ii & iii only (e) All the three
(d) Giving better return to the central
2. Prudential norms were initiated in the banking
Government
sector with a view to
(e) None of these
a) Increasing operational efficiency
, 2
4. Banks can control their transaction costs by (c) Reduction in margins on banking business
(a) Restricting their lending activities (d) Formation of militant unions in the banks
(b) Undertaking more and more non-banking (e) None of these
activities
8. What is the position of Indian banks as far as
(c) Encouraging the customers to bank with other efficiency is concerned?
banks
(a) The Indian banks did not bother about
(d) Devoting more attention to operational efficiency.
efficiency
(b) Compared to foreign counters parts, Indian
(e) None of these banks lagged behind in efficiency.
5. The recent internal empirical research (c) The position of Indian banks cannot be
conducted by the RBI found that estimated due to various factors.
(a) There is cut-throat competition in banking (d) Indian banks accorded high efficiency.
industry.
(e) None of these
(b) The rate of return is not commensurate with
9. Which of the following can be the most
the operational cost.
appropriate title to the passage?
(c) The rate of improvement has not been high.
(a) Indian Banks and foreign Banks
(d) Nationalised banks private sector banks did
(b) Customer Service in Banking Industry
differ in the efficiency measures.
(c) Non-performing Assets in banking sector
(e) None of these
(d) Efficiency in Indian Banking
6. Which of the following statements recognizing
improvement in efficiency is TRUE in the context (e) RBI as a Regulatory Body
of the passage?
Directions (10-13): Choose the word which
(a) There is no discernible difference in efficiency is most nearly the SAME in meaning as the word
parameters. printed in bold as used in the passage.
(b) The foreign banks recorded higher efficiency. 10. RELEVANT
(c) The efficiency of foreign banks is not (a) Recorded (b) opposite (c) appropriate
comparable with Indian banks.
(d) Stringent (e) germane
(d) The rate of such improvement in efficiency
was very higher. 11. AUGMENT
(e) None of these (a) Make (b) become (c) enlarge
7. Changing face of banking led to (d) Increase (e) envelop
(a) Closure of several banks in the country 12. DEVOTE
(b) Entry of private banks and foreign banks (a) Activate (b) apply (c) apportion
