Passage

The existence/establishment of formal financial institutions that offer safe, reliable, and alternative financial instruments is fundamental in mobilizing savings. To save, individuals need access to safe and reliable financial institutions, such as banks, and to appropriate financial instruments and reasonable financial incentives. Such access is not always available to all people in developing countries like India and more so in rural areas. Savings help poor households manage volatility in cash flow, smooth consumption, and build working capital. Poor households without access to a formal savings mechanism encourage immediate spending temptations.

QUESTION

CSAT

Easy

Comprehension

Prelims 2015

What is the crucial message conveyed in the above passage?

Select an option to attempt

Explanation

Statement A is incorrect. The passage does not mention the need to "establish more banks" specifically, but rather highlights the importance of access to safe and reliable financial institutions, such as banks, in enabling individuals to save.

Statement B is incorrect. The passage does not directly discuss increasing the Gross Domestic Product (GDP) growth rate. The focus is more on the availability of financial services rather than economic growth indicators.

Statement C is incorrect. The passage does not discuss increasing the interest rate of bank deposits. Instead, it talks about providing appropriate financial instruments and incentives, which are different from simply adjusting interest rates.

Statement D is correct. The passage conveys the crucial message of promoting financial inclusion, especially in rural areas, by emphasizing the need for accessible and reliable financial institutions and savings mechanisms for poor households.