In order to improve your vocabulary, below is an article related to the latest happening and is taken from a leading newspaper name Economics Times. Solve the below quiz and strengthen your preparation.
Governor Urjit Patel did some tough talk on state-run banks' recapitalisation on Wednesday.
"It will be a reform and recap package and not just recap package so as to ensure that this money is used to strengthen public sector bank balance sheets and that we don't sow the seeds of the next boom and bust cycle of lending,'' said Dr Patel.
Governor Patel's words may bring some distant memory to minds of some.
"This is the price we have to pay for having long tolerated management practices in banks and types of lending, which paid inadequate attention to portfolio practices and recoveries. I may add that while undertaking such a large injection of capital into the banks, specific commitments will be required from each bank to ensure that their future management practices ensure a high level of portfolio quality so that the earlier problem does not recur."
The above para not part 2 of Governor Patel's speech on Wednesday. It was Dr. Manmohan Singh, Finance Minister, in his 1994 budget speech, after throwing ? 5,740 crores of taxpayers' money to keep the banks afloat. This time round, it is ?2.1 lakh crores of your hard-earned money to pay for the defaults of companies which could have funded a few thousand schools and hospitals.
What are the chances of a future Governor repeating Dr Patel's words 25 years down the line? Fairly high. How can it be "this time is different"?
To draw up financial metrics to receive capital is the easy part. Operational freedom, a chief executive with commitment, conviction, and a vision need more attention if banks have to avoid going back to the government with a hat-in-hand. State-run banks are a treasure trove of talent, but attitudes need to change if they are of to be of use. Not all 21 banks would succeed, but the task is to make many win.
A curse of the state-run banking system is the limited tenure of a chief executive. No one has a magic wand, so anything less than five years is meaningless to make an impact. State Bank of India, though different than the rest, was lucky to have a chairman for five years in OP Bhatt. Not many liked his style, but he showed a competitive spirit with things like teaser rate loans that shook rivals and regulator alike. Of course, there are men who did nothing in a five-year term.
Selection of candidates would play a crucial role. The concept of 'seniority' is to be buried. If there are promising general managers and chief general managers, they should be promoted as chief executive with freedom and no back-seat driving by bureaucrats.
Single ownership of these banks brings with it a unique problem. It is difficult to imaging a finance minister or a finance secretary to have 21 different ideas for 21 different banks. They end up conveying one vision that's stifling.
Banks Board Bureau (BBB) is embroiled in a power struggle in the North Block after a promising start. It is not too late to revive.
Every CEO has to present his idea for the bank. Bureaucrats in the ministry may be the appointed guardians of citizens' money, but they have done as poor a job as the bankers, if not worse. Empower the BBB to choose a professional board and a good CEO. Of course, it is easier said than done.
Like any old institution, state-run banks are dragged down by legacy. It needs leaders to initiate change, have conviction, and an ability to inspire. The legacy needs to be broken down.
The nature of democracy may make decision making difficult, but time's not on the government's side. There are leaders who are up to the challenge. Two personalities stand out in dismantling conventions - Prime Minister Narendra Modi and former RBI Governor Raghuram Rajan. State-run banks need some Mini Modis and Chhota Rajans to make a difference.
1. Recap (verb): Go over something again
Synonym: reiterate, recapitulate, review, epitome, repeat, abstract, recite, rehearse, brief
Antonym: enlargement, extension, increase, expansion
Sentence: Could you recap that theory so that I can also join the discussion.
2. Afloat (Adjective/adverb): floating or in a floating condition, out of debt or difficulty, moving without guided or controlled, in circulation
Synonym: float, send off, set in motion, flooded, plan less, buoyant, aimless
Antonym: aground, sunken, submerged, sunk, hollow, empty, purpose full
Sentence: The Central Government of India will be needed to keep public sector banks afloat so that banks can meet basel III norms.
3. Wand (noun): A rod believed to have magic properties, used in performing illusion tricks.
Synonym: baton, stick, rod, scepter, verge, pole
Sentence: The chairman of public sector banks has not any magical wand to wave and recover all the NPA in such a limited period of time.
4. Spirit (Noun): an immaterial force within a human being thought to give the body life, energy, and power
Synonym: courage, enthusiasm, humor, motivation, jazz, energy, essence, temperament, will, attitude, mindset, soul,
Antonym: inactivity, discouragement, timidity, idleness, weakness, lethargy, cowardice
Sentence: During all the terrible winter which followed, the energy and spirit of Indian soldiers never failed them.
5. Teaser (Noun): an advertisement that allures customers by offering lucrative schemes or bonus or gift, a person or thing that teases
Synonym: fighter, slighter, risk-taker, adventurer, twister, secret, puzzler,
Antonym: protector, rescuer, savior, defender, deliverer, guard
Sentence: I did not get time to solve that teaser puzzle in the examination hall.
6. Stifling (adjective): airless
Synonym: suffocating, muggy, confined, stagnant, breathless, close, stuffy, unventilated, close
Antonym: refreshing, airy, arousing, slight, breezy
Sentence: Did she feel stifled in that relationship?
7. Embroiled (Verb): to involve in difficulties or conflicts, to throw into disorder or confusion
Synonym: entangle, involve, encumber, enmesh, ensnare, mire, disturb, trap
Antonym: emancipate, free, liberate, release, interpret, disentangle, explicate, clarify
Sentence: The country becomes embroiled in the riots that ended after two months with the independence.
8. Conviction (noun): a state of mind in which one is free from doubt
Synonym: confidence, sentiment, doctrine, faith, assurance, certainty, sureness, satisfaction
Antonym: disturb, disbelief, unbelief, doubt, uncertainty, mistrust
Sentence: His conviction was on her face, anyone can observe the same.
9. Dismantling: the process of ending an organization or system gradually in an organized way, to ruin the integrity or functioning of the system or programme
Synonym: break up, demolish, destroy, raze, denude, annihilate, strike, disassemble, wreck
Antonym: build, repair, restore, combine, construct, assemble, put together
Sentence: The beautiful city lost all its importance after dismantled by the muslim attack in 1555.
10. Bureaucrat (noun): a member of bureaucracy
Synonym: public servant, office-holder, civil servant, administrator, office-holder, functionary, chiefs, procurators, government official
Sentence: Ajit Dival is one of most reliable and energetic bureaucrat in India.
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