englishwalapage June 25, 2020
cloze test 
quiz 3 



Former RBI Governor Raghuram Rajan’s note of caution on the next financial crisis that could be building up needs to be taken in all _A_ (consideration). In his note to Parliament’s Estimates Committee on bank non-performing assets (NPAs), Mr. Rajan has _B_ (established) three major sources of potential trouble: Mudra credit, which is basically small-ticket loans granted to micro and small enterprises; _C_ (contributing) to farmers through Kisan Credit Cards; and contingent liabilities under the Credit Guarantee Scheme for MSMEs, run by the Small Industries Development Bank of India. The disbursement under Mudra loans alone is ?6.37 lakh crore, which is over 7% of the total outstanding bank credit. These loans have been _D_ (sanctioned) under the Pradhan Mantri Mudra Yojana, which aims to ‘fund the unfunded’, and is a _E_ (signature) scheme of the NDA government. Given that these are small loans up to Rs10 lakh each, with the borrowers mostly from the informal sector, banks have to monitor them very closely. It is _F_ (debatable) whether banks have the resources and manpower to do this when they are chasing the bigger borrowers for business and, increasingly these days, recoveries. The _G_ (risk) is that these small-ticket loans will drop under the radar and build into a large credit issue in course of time. The same _H_ (function) holds true for crop loans made through Kisan Credit Cards. Mr. Rajan’s advice on loan waivers has been made by him and others in the past. But the political class has chosen to turn a _I_ (deaf) ear to this advice, vitiating the credit culture and creating a moral hazard where farmer-borrowers assume that their loans will _J_ (intentionally) be waived off. The former RBI Governor has strongly defended the RBI against criticism, often unfair, over its policies on NPA recognition and resolution.


Join
Our Telegram group : https://t.me/englishwalapage
Tags
Reactions

Post a Comment

0 Comments