IBPS Reading Comprehension Passages 5

Question 1

Passage: 'The Unified Payments Interface (UPI) has revolutionised retail payments in India by enabling instant, interoperable fund transfers across banks using a single mobile application. Its adoption has outpaced that of similar systems globally.' What is the BEST conclusion supported by the passage?

Accepted Answer

India's UPI adoption has been exceptionally rapid compared to global peers

Answer

The passage states UPI adoption has outpaced similar global systems, indicating exceptionally rapid uptake in India.

Question 2

A passage reads: 'Cybersecurity threats in banking range from phishing attacks targeting customers to sophisticated ransomware assaults on core banking infrastructure. Banks must adopt multi-layered defence strategies to mitigate these risks.' The word 'mitigate' most nearly means:

Accepted Answer

Reduce or lessen

Answer

'Mitigate' means to reduce the severity or impact of something, in this case, cybersecurity risks.

Question 3

Passage: 'Credit ratings issued by agencies like CRISIL and ICRA provide investors with an independent assessment of a borrower's ability to repay debt. However, the global financial crisis of 2008 exposed significant conflicts of interest within the rating agency model.' What weakness in the rating agency model does the passage highlight?

Accepted Answer

The issuer-pays model creates conflicts of interest that can compromise rating integrity

Answer

The passage references the 2008 crisis as evidence of conflicts of interest within the rating model, specifically the issuer-pays structure.

Question 4

A passage says: 'Central bank digital currencies (CBDCs) are digital forms of sovereign currency issued and regulated by central banks. Unlike cryptocurrencies, CBDCs are backed by the full faith and credit of the issuing government.' How do CBDCs differ from cryptocurrencies?

Accepted Answer

CBDCs are government-backed, giving them sovereign guarantee unlike decentralised cryptocurrencies

Answer

The passage explicitly states CBDCs are sovereign-backed, distinguishing them from decentralised cryptocurrencies like Bitcoin.

Question 5

Passage: 'The marginal cost of funds-based lending rate (MCLR) system was introduced to ensure faster transmission of RBI's policy rate changes to bank lending rates, replacing the earlier base rate system which was criticised for its rigidity.' Why was MCLR introduced?

Accepted Answer

To ensure policy rate changes are transmitted more quickly to borrowers

Answer

The passage states MCLR was introduced to ensure faster transmission of policy rate changes, addressing the base rate system's rigidity.

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS Reading Comprehension Passages 5