2013 CSAT, all questions

UPSC Prelims 2013 · CSAT

Question 27: Reading Comprehension

Passage · as printed by UPSC
Passage beginning “Financial markets in India have acquired greater…”Passage beginning “Financial markets in India have acquired greater…”

Risk and liquidity management assumes more importance in the Indian banking system in future due to

  1. 1.further globalization.
  2. 2.more consolidation and deregulation of the financial system.
  3. 3.further diversification of the financial system.
  4. 4.more financial inclusion in the economy.

Select the correct answer using the code given below :

a1, 2 and 3
b2, 3 and 4
c1 and 2 only
d3 and 4 only

AnswerUPSC’s answer is (a).

The passage ends by saying that further globalisation, consolidation, deregulation and diversification may make banking more complex and riskier, so risk and liquidity management and skill-building gain importance. That supports statements 1, 2 and 3; statement 2 bundles consolidation and deregulation, and both are named. Financial inclusion is not mentioned anywhere, so statement 4 is out.

  • 1. Further globalisation is named as making banking riskier.
  • 2. Consolidation and deregulation are both named.
  • 3. Further diversification of the financial system is named.
  • 4. Financial inclusion is not mentioned in the passage.

How you could have got this

  1. If you were sure statement 1 is correct, (b) and (d) go: each of them leaves 1 out.

    What you needed to know: Further globalisation is named as making banking riskier.

  2. Then, if you were sure statement 3 is correct, (c) goes: it leaves 3 out.

    What you needed to know: Further diversification of the financial system is named.

Only (a) is left. You didn’t need statements 2 or 4.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Right. Globalisation, consolidation with deregulation, and diversification are all named.
  • (b) Wrong. It adds financial inclusion and leaves out globalisation.
  • (c) Wrong. It leaves out diversification.
  • (d) Wrong. It adds financial inclusion and drops the three factors the passage names.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2013, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.