Passage

India has banking correspondents, who help bring people in the hinterland into the banking fold. For them to succeed, banks cannot crimp on costs. They also cannot afford to ignore investing in financial education and literacy. Banking correspondents are way too small to be viewed as a systemic risk. Yet India’s banking regulator has restricted them to serving only one bank, perhaps to prevent arbitrage. Efforts at banking outreach may succeed only if there are better incentives at work for such last-mile workers and also those providers who ensure not just basic bank accounts but also products such as accident and life insurance and micro pension schemes.

QUESTION

CSAT

Easy

Comprehension

Prelims 2019

Which one of the following is the most logical, rational, and crucial inference that can be derived from the above passage?

Select an option to attempt

Explanation

Statement 1 is incorrect. The passage discusses the challenges and requirements for success in bringing people into the banking fold but does not state that these efforts are not successful. Hence, this inference is not correct.

Statement 2 is incorrect. The passage does not specifically call for "more" correspondents, but it implies that increasing the number of effective correspondents and incentivizing them could play a crucial role in making financial inclusion successful.

Statement 3 is correct. It can be inferred as a logical interpretation because effective financial inclusion requires more than just providing basic banking services. Banking correspondents must have the skills to handle a variety of financial products, educate the public, and manage complex financial needs, which aligns with the idea of having "diverse skills.

Statement 4 is incorrect. It simply mentions this regulatory restriction without suggesting that outreach would be impossible without it being changed. The focus is on the incentives and better engagement for the correspondents, not necessarily on allowing them to work for multiple banks.

Trusted by 2L aspirants