GATE2019 IN: GA-6

Question

Since the last one year after a $125$ basis point reduction in repo rate by the Reserve Bank of India, banking institutions have been making a demand to reduce interest rates on small saving schemes. Finally, the government announced yesterday a reduction in interest rates on small saving schemes to bring them on par with fixed deposit interest rates.

Which one of the following statements can be inferred from the given passage?

• A. Whenever the Reserve Bank of India reduces the repo rate, the interest rates on small saving schemes are also reduced
• B. Interest rates on small saving schemes are always maintained on par with fixed deposit interest rates
• C. The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving scheme
• D. A reduction in interest rates  on small savings scheme follow only after a reduction in  repo rate by the Reserve Bank Of India

Answer 1

"banking institutions have been making a demand to reduce interest rates on small saving schemes. Finally, the government announced yesterday a reduction in interest rates on small saving schemes"

This means that government after considering the demand reduced the interest rates. So, option C can be inferred from the given passage.
Options A, B and D cannot be inferred from the given passage.
Correct option: C

Comments

Why not D? Banks demanded as result of reduction in repo rate by the Reserve Bank of India.

Answer 2

Option B

Interest rates on small saving schemes are always maintained on per with fixed deposit interest.

Comments

we have to conclude our answer from the given para only.

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why not d?