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English Reading Comprehension Passage is the most important topic in almost all the competitive exams - IBPS Exams, SBI Clerk and SBI PO exams, LIC exam, SSC CGL and SSC CHSL, Railways Recruitment Exams, MAT, NIFT, CLAT, etc. Here's one English Comprehension Passage based on Economy which is designed keeping the new pattern English questions for Bank exams in mind. Practise this and check how good you are at reading comprehension skills. 

Directions: Kindly study the passage given below and answer the questions given beside.

Paragraph 1: The RBI Annual Report reveals that almost all demonetized notes have been returned to the central bank. This number does not include the old notes with District Central Cooperative Banks for the short window when they were allowed to accept deposits. It also does not include the notes within Nepal. The shortfall of Rs 16,050 crore between the notes in circulation when the notes were demonetised and those that were returned, could therefore also be made up once these notes are returned to the RBI.
Paragraph 2: It should come as no surprise that almost all the notes have been returned, including the stock of black money held as cash. To the extent that it was possible to exchange money legally, individuals did so. When cash limits for withdrawal made it difficult, friends and families participated. The inconvenience of long queues was overcome by household staff. A private company offered booking of “chhotus”, who would stand in long queues for people for Rs 90 an hour until their turn came. Bank employees were averse to being unhelpful to regular customers and found ways to serve them. Innumerable ways were found to work around the changing rules of exchange, cash limits, indelible ink and specified uses of old notes.
Paragraph 3: Those who could not exchange money legally found money changers. Innumerable anecdotes, media reports and arrests of bank staff tell stories about how this was done all over the country.  When the government announced that old notes could no longer be exchanged, but only deposited, new ways of changing the stock of unaccounted cash emerged. Individuals with bank accounts, including Jan Dhan accounts, and companies showing cash accrual from sales came into business. Large amounts could be laundered through this route as it did not involve immediate cash payouts by banks, since cash shortages still persisted with the RBI and banks scrambling to remonetise the economy.
Paragraph 4: It was to be expected that even if people have to pay tax on their hoarded cash, and a change fee, they would prefer to do that rather than lose the whole amount. Data from Prowess, a database of companies in India, shows that in the quarter of demonetisation, when purchasing power had fallen sharply, net sales by companies rose significantly. At the same time, the number of tax payers and tax collections rose. The tax department is said to have found thousands of shell companies which were possibly engaging in the activity of depositing money in their accounts during the demonetisation period, claiming that it was cash from sales. This provided a means for laundering money.
Paragraph 5: The total currency in circulation, according to the RBI’s annual report, is about Rs 2 lakh crore short of the pre-demonetisation period. This is partly due to the increase in focus on printing of lower denomination currency notes. Initially, the RBI had focused on printing the Rs 2,000 notes to rapidly remonetise the economy. In addition, there could be some reluctance to hold cash. The replacement of cash transactions by digital transactions, the slowdown in small-scale industry, in the rural economy, construction and other informal segments of the economy could also lead to somewhat lower demand for cash. However, it is less probable that the cash of black money holders has not been withdrawn because they are unlikely to leave that in the bank accounts of the money launderers for long. It might have partly been settled for bitcoins, gold, or similar assets that are difficult to trace.

  • 1.
    As per paragraph 5, which of the following may not be reason/reasons for a decrease in cash in circulation?
    Some amount of cash transactions have been replaced by digital transactions.
    Demonetization has hit the small-scale industry which is heavily cash dependent, leading to a slowdown in terms of demand.
    Multiple sectors of the economy were hit by demonetization affecting the aggregate demand in the economy.
    There has been a decrease in printing of lower denomination currency notes.
    Most of the Black money holders withdrew their money at the first available opportunity.

  • 2.
    With reference to paragraph 2, which of the following is not true?
    The notes returned include some stock of black money as well.
    People came up with many innovative ideas for exchanging money.
    Bank employees were generally unhelpful and reluctant to even serve their regular customers.
    Demonetization was utilized as a new business opportunity.
    E. None of the above

  • 3.
    As per paragraph 1, what factors account for the shortfall between notes before demonetization and notes returned?
    Old notes deposited with Regional Rural Banks for the period where they were allowed to accept deposits.
    Old notes from neighbouring nations like Nepal, Bangladesh and Pakistan.
    Notes were smuggled overseas via hawala transactions.
    Money was laundered via fraudulent investment in real estate.
    Old notes that were deposited with District Central Cooperative Banks were not included.

  • 4.
    What is the tone of the author in the passage?
    A. Appreciative
    B. Angry
    C. Sarcastic
    D. Gloomy
    E. Analytical

  • 5.
    What could be an appropriate title for the passage?
    A. RBI and Government at odds on demonetization
    B. Demonetization- how effective was it really?
    C. India in a new cashless phase
    D. Crackdown on money launderers
    E. Pre-demonetization tax evasion

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