Nearly all the Banking, Insurance, and Government exams have English as an indispensable section. The section checks aspirants’ grasp on a range of factors like vocabulary, grammar, and comprehension. While reading the editorials of a couple of good newspapers is an excellent medium to improve all the three aspects, it becomes at times boring as well. This happens mainly because of two reasons: either the subject is not interesting enough to keep you glued on the article or you stumble across a lot of new and complicated words which you don’t understand. Read the tips to master your vocabulary here.
Generally, it so happens that if there is only one unknown word in a sentence, you kind-of get its sense by reading the remaining sentence. But if there are two or more words placed interwovenly, the sense of the sentence is generally lost and you need to use a dictionary and attempt hard to understand what the sentence is trying to convey. It is for this reason that we are coming up with this series of articles to help you out with the senses of the difficult words used in the editorial of reputed newspapers.
|Difficult Word/ Meaning||Contextual Meaning|
|Pre-emptive||serving or intended to preempt or forestall something, especially to prevent attack by disabling the enemy|
|Imposition||the act of introducing something such as a new law or rule, or a new tax|
|Moratorium||a temporary prohibition of an activity|
|Flailing||beset by difficulties|
|orchestrated||plan or coordinate the elements of (a situation) to produce a desired effect, especially surreptitiously|
|Ward off||to prevent something from harming you|
|Bolster||support or strengthen|
|Legacy||a situation that has developed as a result of past actions and decisions|
|Contagion||the communication of disease from one person to another by close contact|
|Lurking around||To move or hang about (some place) in a suspicious, sneaking, or slinking manner.|
Another bailout: On Lakshmi Vilas Bank
Overall banking sector health is a concern despite the RBI’s pre-emptive (serving or intended to preempt or forestall something, especially to prevent attack by disabling the enemy) rescue efforts
The RBI’s decision to recommend the imposition (the act of introducing something such as a new law or rule, or a new tax) of a one-month moratorium (a temporary prohibition of an activity) on Lakshmi Vilas Bank (LVB) and almost simultaneously announce a draft scheme of amalgamation that entails the Indian unit of the Singapore government-controlled DBS Bank taking over the capital-starved private lender marks a welcome intervention by the banking regulator. The well-choreographed move will protect the interests of depositors and employees, while shareholders will see the value of their holdings written off once the merger is operationalised. Coming just about eight months after another flailing (beset by difficulties) private lender, Yes Bank, was rescued by an RBI-orchestrated (plan or coordinate the elements of (a situation) to produce a desired effect, especially surreptitiously) capital infusion, the Karur-based bank’s proposed bailout signals that the regulator is keen to proactively step in to ward off (to prevent something from harming you) risks to wider financial sector stability. That the LVB had become a candidate for regulatory intervention was evident after its continuous losses, steady erosion of its net worth and inability to raise fresh capital to bolster (support or strengthen) its balance sheet. Despite being placed under the RBI’s Prompt Corrective Action framework in September 2019, the lender’s finances deteriorated to the point where its gross ratio of non-performing assets to advances shot up to 25.4% in March 2020 and the Tier 1 Capital ratio turned a negative 0.88% at the end of that quarter. The capital ratio subsequently worsened to -4.85% by the end of September, tipping the central bank’s hand.
Overall banking sector health, however, remains a significant concern notwithstanding this latest rescue effort. On Wednesday, Gita Gopinath, the IMF’s chief economist, flagged the wide-ranging damage the COVID-19 pandemic had inflicted on the global economy and warned of deeper legacy (a situation that has developed as a result of past actions and decisions) scars — more stress on corporate balance sheets and governments burdened with large debt. For all its liquidity bolstering measures since March, the RBI now faces the prospect of having to maintain a heightened vigil over scheduled commercial banks, as well as non-banking financial companies and mortgage lenders, given the threat of contagion (the communication of disease from one person to another by close contact) from a failure here. The RBI had in its Financial Stability Report in July pointed out that its stress tests indicated that the gross NPA ratio of commercial banks could worsen to 14.7% by March 2021, from 8.5% a year earlier, if the pandemic’s adverse economic impact caused the GDP to contract by 8.9% in the current fiscal. In October, the bank forecast India’s GDP would shrink by 9.5% and earlier this month cautioned that “lurking around (To move or hang about (some place) in a suspicious, sneaking, or slinking manner) the corner” was the major risk of stress intensifying among households and firms that could spill over into the financial sector. The RBI has its task cut out in ensuring it keeps the crucial engine of credit ticking over as the economy strives to revive.
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