- 06/21/2019 at 9:13 am #1176332EduGorillaKeymasterSelect Question Language :
Direction : Read the following passage carefully and answer the questions given below it. Certain words have been printed in the bold to help you locate them while answering some of the questions.
With barely nine months to go before the Lok Sabha election, how serious is the crisis in our banking system? Put simply, it is not going to be resolved any time soon, although the government is scrambling to force more medicine into the patient on life support.
The Reserve Bank of India’s latest financial stability report tries to sound optimistic. It says credit picked up in 2017-18 despite sluggish deposit growth; but it sees banks’ gross non-performing advances (GNPA) ratio worsening from 11.6 percent in March 2018 to 12.2 percent in March 2019. A Credit Suisse (CS) report says banks’ GNPAs climbed to Rs 10.09 trillion at end-March from Rs 8.82 trillion at end-December.
Last year the RBI placed 11 of 21 public-sector banks (PSBs) on its prompt corrective action (PCA) list: in other words, under constant watch in the ICU. Over the past three years, the government has injected Rs 1.4 trillion of capital into PSBs. The sickest banks have received nearly two-thirds or Rs 810 billion – almost matching those 11 banks’ losses in the three years. The government has budgeted Rs 650 billion of fresh capital infusion in 2018-19, but this will not suffice.
The PCA banks’ pallor is turning greyer. The RBI says their GNPA ratio may worsen from 21 percent at end-March to 22.3 percent by March next year. Nine of them will see severe capital shortfalls. At the same time, PCA banks’ loan books are shrinking.
Two of the 21 PSBs reported modest profits in fiscal 2017-18. But losses at the other 19 widened to Rs 873.5 billion. IDBI Bank, which has GNPAs of 28 percent and is pityingly called the Industrial Dust Bin of India, will now be controlled 51 percent by the Life Insurance Corporation. This could be a temporary vitamin boost, because there are reports that the government plans to merge IDBI with three other ailing PSBs.
The viewpoint of the author can be best described as:
A. Ideologically biased
B. Socially irrelevant
C. Economically referenced
D. Historically bound
E. Politically referenced
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