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In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the following suggested courses of actions logically follow(s) for pursuing. Statement: Former RBI chief Raghuram Rajan has dissected the banking crisis in his recent analysis of non-performing assets (NPAs). He implies that cronyism is an important cause. Rajan says one reason for NPAs was over-optimism after the initial success of public-private partnerships (PPPs) in infrastructure during 2006-08, leading to explosive expansion without due diligence. Second, slower GDP growth after 2008 meant that traffic and industrial demand were far less than projected. This was exacerbated by delays in land acquisition, and non-availability of gas and coal for power plants.  Courses of action: I. Rajan says he sent a list of prominent bank fraud cases to the PMO, but heard nothing more about it. This has led to accusations that cronyism has been the root cause of record NPAs. That is simply wrong.  II. Besides, bond buyers - mutual funds, pension funds, insurance companies - will be decimated if bond defaults are as common as bank NPAs, and the human and economic impact may be just as bad.  III. Banks should not be forced to get into project finance at all, let alone on a grand scale. They grew for decades through working capital and retail lending. They had no ability to judge project costs or risks. But they jumped in, often on political orders or pressures. 

In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the following suggested courses of actions logically follow(s) for pursuing. Statement: Former RBI chief Raghuram Rajan has dissected the banking crisis in his recent analysis of non-performing assets (NPAs). He implies that cronyism is an important cause. Rajan says one reason for NPAs was over-optimism after the initial success of public-private partnerships (PPPs) in infrastructure during 2006-08, leading to explosive expansion without due diligence. Second, slower GDP growth after 2008 meant that traffic and industrial demand were far less than projected. This was exacerbated by delays in land acquisition, and non-availability of gas and coal for power plants.  Courses of action: I. Rajan says he sent a list of prominent bank fraud cases to the PMO, but heard nothing more about it. This has led to accusations that cronyism has been the root cause of record NPAs. That is simply wrong.  II. Besides, bond buyers - mutual funds, pension funds, insurance companies - will be decimated if bond defaults are as common as bank NPAs, and the human and economic impact may be just as bad.  III. Banks should not be forced to get into project finance at all, let alone on a grand scale. They grew for decades through working capital and retail lending. They had no ability to judge project costs or risks. But they jumped in, often on political orders or pressures.  Correct Answer None follows

A course of action is something that needs to be done considering the present scenario in mind. From the statement, it is evident that it is in context of the NPA and it lays out the views of Rajan in accordance to the NPA.

From the courses of actions mentioned none of them is relevant to be considered as an appropriate course of action keeping in mind the given statement.

Course of action I, itself is a problem and itself mentions the outcomes of the action and is thus, not correct.

 Course of action II is not an action, it is just a statement stating general information.

Course of action III is also irrelevant as it does not suggest any course of action rather it presents a general picture in context of banks. As it does not state any course of action, thus, it can also be rejected.

Thus, the correct answer is option 3.

Related Questions

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