(Papers) IBPS PO Exam Paper - 2015 "Held on: 31-10-2015" ::ENGLISH LANGUAGE::

(Papers) IBPS PO Exam Paper - 2015 "Held on: 31-10-2015"

::ENGLISH LANGUAGE::

DIRECTIONS (Qs. 1-15): Read the following passage based on an Interview to answer the given questions based on it. Certain words are printed in bold to help you locate them while answering some of the questions.

A spate of farmer sucides linked to harassment by recovery agents employed by Micro Finance Institutions (MFIs) in Andhra Pradesh spurred the state government to bring in regulation to protect consumer interests. But, while the Bill has brought into sharp focus the need for consumer protection, it tries to micro-manage MFI operations and in the process it could scuttle some of the crucial benefits that MFls bring to farmers, says the author of Microfinance India, State of the Sector Report 2010. In an interview he points out that prudent regulation can ensure the original goal of the MFIs–social uplift of the poor. Do you feel the AP Bill to regulate MFIs is well thought out ? Does it ensure fairness to the borrowers and the long-term health of the sector ? The AP bill has brought into sharp focus the need for customer protection in four critical areas First is pricing. Second is tender’s liability — whether the Lender can give too much loan without assessing the customer’s ability to pay. Third is the structure of loan repayment –
whether you can ask money on a weekly basis from people who don’t produce weekly incomes. Fourth is the practices that attend to how you deal with defaults. But the Act should have looked at the positive benefits that institutions could bring in, and where they need to be regulated in the interests of the customers. It should have brought only those features in. Say, you want the recovery practices to be consistent with what the customer can really manage. If the customer is aggrieved and complains that somebody is harassing him, then those complaints should be investigated by the District Rural Development Authority. Instead what the Bill says is that MFIs cannot go to the customer’s premises to ask for recovery and that all transactions will be done in the Panchayat office. With great difficulty, MFIs brought services to the door of people. It is such a relief for the customers not to be spending time out going to banks or Panchayat offices, which could be 10 km away in some cases. A facility which has brought some relief to people is being shut. Moreover, you are practically telling the MFI where it should do business and how it should do it. Social responsibilities were in-built when the MFIs
were first conceived. If MFIs go for profit with loose regulations, how are they different from moneylenders? Even among moneylenders there are very good people who take care of the customer’s circumstance, and there are really bad ones. A large number of the MFIs are good and there are some who are coercive because of the kind of prices and processes they have adopted. But Moneylenders never got this organised. They did not have such a large footprint. An MFI brought in organisations, it mobilized the equity, it brought in commercial funding. It invested in systems. It appointed a large number of people. But some of then exacted a much higher price than they should have. They wanted to break even very fast and greed did take over in some cases. Are the for-profit MFIs the only ones harassing people for recoveries ? Some not-for-profit outfits have also adopted the same kind of recovery methods. That may be because you have to show that you are very efficient in your recovery methods and that your portfoilo is of a very high quality if you want to get commercial funding from a bank. In fact, among for-profits there are many who have sensible recovery practices. Some have fortnightly recovery, some have monthly recovery. So we have differing practices. We just describe a few dominant ones and assume every for-profit MFI operates like that. How can you introduce regulations to ensure social upliftment in a sector that is moving towards for -profit models ? I am not really concerned whether someone wants to make a profit or not. The bottom-line for me is customer protection. The first area is fair practices. Are you telling your customers how the loan is structured ? Are you being transparent about your performance ? There should also be a lender’s lilability attached to what you do. Suppose you lend excessively to a customer without assessing their ability to service the loan, you have to take the hit. Then there’s the question of limiting returns. You can say that an MFI cannot have a return on assets more than X,
a return on equity of more than Y. Then suppose there is a privately promoted MFI, there should be a regulation to ensure the MFI cannot access equity markets till a certain amount of time. MFIs went to markets perhaps because of the need to grow too big too fast. The government thought they were making profit off the poor, and that’s an indirect reasons why they decided to clamp down on MFIs. If you say an MFI won’t go to capital market, then it will keep political compulsions under rein.

1. Which of the following best explains ‘Structure of loan repayment’ in the context of the first question asked to the author ?

(a) Higher interest rate
(b) Payment on weekly basis
(c) Giving loan without assessing ability to pay
(d) Method of dealing with defaults
(e) Total amount of loan

2. The author is of the view that _____

(a) the bill to regulate MFIs is not needed
(b) the bill neglects the interests of the customers
(c) the positive aspects of MFIs should also be considered.
(d) most of the MFIs are not good.
(e) MFIs must be told what and where they should do business

3. One of the distinct positive feature of MFIs is that _____.

(a) they brought services to the door of people
(b) they dealt with defaulters very firmly
(c) they provided adequate customer protection
(d) they are governed by the local people
(e) they have highly flexible repayment plan

4. What is the difference between MFIs and moneylenders ?

(a) There is no difference.
(b) A large number of money lenders are good whereas only a few MFIs are good
(c) Money lenders gave credit at lower rate of interest than that of MFIs
(d) MFIs adopted a structure and put a process in place, which was not the case with moneylenders
(e) Moneylender appointed large number of local people as against more outside people in MFIs

5. Which of the following is positive outcome of the AP Bill to regulate MFIs ?

(a) The banks have started this service in remote areas
(b) It highlighted some areas of customer protection
(c) It highlighted the bad practices being followed by moneylenders
(d) MFIs is invested in systems and broguth in commercial funding.
(e) It will help convert MFIs into small banks

6. The author is recommending ____.

(a) Not-for profit MFIs
(b) For-profit MFIs
(c) Stoppage of commercial funding to MFIs
(d) Customer satisfaction irrespective of ‘Not-for profit’ or ‘for profit’ MFIs
(e) Public sector promoted MFIs

7. Why did MFIs go to the equity markers ?

(a) To repay the loan
(b) To lower interest rate
(c) There were political compulsions
(d) To become a public sector institution
(e) To grow very fast

8. Which of the following has not been indicated as one of the features of air practices for customer protection ?

(a) Providing information about loan structuring.
(b) MFIs should also be held liable for some of their actions
(c) Not to raise money from capital market
(d) MFIs should also inform public about their own performance also
(e) To provide credit as per the rational assessment of their ability to service the loan

9. Which of the following could possibly be most plausible reason for banning recovery by going to customer’s premises ?

(a) To protect the family members
(b) To protect the customer from harassment and coercion
(c) To reduce the undue expenses of MFIs is resulting in lower interest rates.
(d) To account systematically the money recovered in the books of accounts
(e) To keep Panchayat office out of these transactions

DIRECTIONS (Qs. 10-13) : Choose the word which is most nearly the same in meaning as the word/group of words printed in bold.

10. manage

(a) afford
(b) assess
(c) thrust
(d) administer
(e) use

11. exacted

(a) perfected
(b) demanded
(c) estimated
(d) corrected
(e) accurate

12. scuttle

(a) delay
(b) mix
(c) shuffle
(d) destroy
(e) smoothen

13. spurred

(a) agitated
(b) instigated
(c) reflected
(d) disapproved
(e) prompted

DIRECTIONS (Qs. 14-15) : Choose the word or group of words which is most opposite in meaning of the word printed in bold.

14. under rein

(a) under wrap
(b) without target
(c) let loose
(d) no cloud
(e) under cloud

15. coercive

(a) gentle
(b) promoting
(c) progressive
(d) natural
(e) opinionated

DIRECTIONS (Qs. 16-20) : Rearrange are following six sentences (A), (B), (C), (D), (E) and (F) in the proper sequence to form a meaningful paragraph; then answer the questions given below them.

(A) There are a number of item in the atomic energy programme which are being made indigenously.
(B) Given the overall energy situation in India, the use of nuclear power in some measure is inescapable even while thermal and hydro power continue to be the dominant
elements.
(C) However, commercial aspects of exploiting nuclear capabilities, especially for power-generation programmes, have been recently given high priority.
(D) Atomic energy programmes have been subject to severe restrictions for every obvious reason as the Department of Atomic energy is becoming self-reliant in areas in which only a few countrices have such capability.
(E) Even to meet these nuclear power requirements, India critically requires a commercia level power-generation capability, with its commensurate safety and nuclear waste
management arrangements.
(F) Thus, in Indian context energy security is also crucial, perhaps much more than it is for the U.S.A.. because India imports a good part of its crude oil requirements, paying
for it with precious foreign exchange.

16. Which of the following will be the FIFTH sentence after rearrangement ?