UPSC Prelims 2016 · GS Paper I
Question 29: Economy and Social Development
The term ‘Core Banking Solutions’ is sometimes seen in the news. Which of the following statements best describes/describe this term?
- 1.It is a networking of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
- 2.It is an effort to increase RBI’s control over commercial banks through computerization.
- 3.It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.
Select the correct answer using the code given below.
AnswerUPSC’s answer is (a).
Core Banking Solution links all of a bank's branches on a centralised network, so a customer can operate the account from any branch of the bank, regardless of where it was opened. It is a technology system within a bank, not a means for RBI to control commercial banks and not a procedure for taking over a bank with large non-performing assets.
- 1. It networks a bank's branches so accounts work from any branch.
- 2. It is a bank's own technology platform, not a tool of RBI control.
- 3. Takeover of a bank with large bad loans is a different process, such as merger.
How you could have got this
- If you were sure statement 3 is not correct, (b), (c) and (d) go: each of them includes 3.
What you needed to know: Takeover of a bank with large bad loans is a different process, such as merger.
Only (a) is left. You didn’t need statements 1 or 2.
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: only the networking of branches describes core banking.
- (b) Statements 2 and 3 are wrong; it is not an RBI control tool or a takeover procedure.
- (c) Statement 3 is wrong; takeover of weak banks is merger or resolution.
- (d) Statements 2 and 3 are wrong, so 'all three' fails.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2016, General Studies Paper I, Series A. The paper on upsc.gov.in.