English Reading Comprehension Practice for Banking Exams

Reading Comprehension is quite an important concept for all banking aspirants and even for those who are preparing for any sort of competitive examinations. All the major banking exams including RBI Assistant, SBI PO, IBPS PO, or any other clerical level exam aspirants cannot skip this one. We are here to guide the candidates with English Reading Comprehension Practice for Banking Exams. Mentioned below is the explanation of the concept followed by a reading comprehension passage and practice questions related to that.

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Important Concept

Reading comprehension passages are very important for both Preliminary and Mains stages as they account for 25-50% of the weightage. You can expect one passage with 5 to 10 questions at the prelims level. 

Read the complete passage and try to understand not only the facts, but also what the whole passage is about.

It is important to pay attention to the beginning and the end of the passage. The first few lines give the background or set the mood of the passage. The last paragraph usually sums up the idea being discussed in the passage.

Keep in mind what idea is being conveyed in different paragraphs. For instance, if the author talks about negative effects of globalisation in the second paragraph, you should keep in mind which paragraph lists negative effects. This will help you quickly refer to the passage in case you need to. This will also help you answer questions based on the central idea of a particular paragraph.

All questions should be answered based only on the information given in the passage. You should not let outside knowledge influence your answers.

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Reading Comprehension Tips

• You should approach reading comprehension questions after you have attempted other types of questions, which take considerably less time.
• Reading the questions before reading the passage can help you understand the passage better and help you attempt the questions faster.
• When attempting an RC, you should first attempt vocabulary-based questions as these usually take the least amount of time.
• Work on improving your vocabulary, this will not only help you understand the passage better, but also improve your accuracy in vocab-based questions.
• Read articles on different topics to improve your reading speed. This will also help you remember the contents of the passage.

SBI Clerk Prelims Free Mock Test 2023

English Reading Comprehension Practice for Banking Exams

Directions: Read the following passage and answer the questions.

Over the past two decades people across the world have seen digital services transform the economy and their lives. Taxis, films, novels, noodles, doctors and dog-walkers can all be summoned with a tap of a screen. Giant firms in retailing, carmaking and the media have been humbled by new competitors. Yet one industry has withstood the tumult: banking. In rich countries it is perfectly normal to queue in branches, correspond with your bank by post and deposit cheques stamped with the logo of firms founded in the 19th century. In Asia payment apps are a way of life for over 1 billion users. In the West mobile banking is reaching critical mass—49% of Americans bank on their phones—and tech giants are muscling in. Apple unveiled a credit card with Goldman Sachs and Facebook is proposing a payments service to let users buy tickets and settle bills.

Banks are so vital that the economy reels when they stumble, as the crisis of 2008-09 showed. Bankers and politicians may thus be tempted to resist technological change. But that would be wrong because its benefits—a leaner, more user-friendly and more open financial system—easily outweigh the risks. Banking is late to the smartphone age because entrepreneurs have been put off by regulations. And, since the financial crisis, Western banks have been preoccupied with repairing their balance-sheets and old-fashioned cost-cutting. Late is better than never, however. Several new business models are emerging. In Asia payment apps are bundled with e-commerce, chat and ride-hailing services offered by firms such as Alibaba and Tencent in China and Grab in South-East Asia. These networks link to banks but are vying to control the customer relationship.

In America and Europe big banks are still more or less in control and are rushing to offer digital products. But threats loom. Mobile-only neo-banks that do not bear the cost of branches are nibbling at customer bases. Payments firms like PayPal work with Western banks but are expected to capture a greater share of profits. Lucrative niches like foreign exchange and asset management are being harried by new entrants. The pace of change will accelerate. Younger people no longer stay with the same bank as their parents—15% of British 18- to 23-year-olds use a neo-bank. Tech firms that people trust, such as Apple and Amazon, are natural candidates to grow big financial arms. The biggest four American banks are spending a total of over $25bn a year on perfecting better customer applications and learning to mine data more cleverly. Venture-capital firms invested $37bn in upstart financial firms last year.

The benefits of technological change are likely to be vast. Costs should tumble as branches are shut, creaking mainframe systems retired and bureaucracy culled. If the world’s listed banks chopped expenses by a third, the savings would be worth $80 a year for every person on Earth. In 2000 the Netherlands had more bank branches per head than America; it now has just a third as many. The system will get better at its vital job of allocating capital. Richer data will allow banks to take risks that currently baffle underwriters. Fraud should be easier to spot. Lower costs and the democratising effect of social media will give more people better access to finance. And more firms with good ideas should be able to get loans faster, boosting growth. Yet change also poses risks. Because the financial system is embedded in the economy, innovation tends to create turbulence. The credit card’s arrival in 1950 revolutionised shopping but also sparked America’s consumer-debt culture.

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Question 1: What is the primary purpose of the author in the first paragraph of the passage?

A) to illustrate the contribution of technology in ensuring access to banking services

B) to illustrate how technology has brought the world together

C) to illustrate how technology has revolutionised the service sector and how the banking sector is next in line for disruption

D) to illustrate the trust that people have in tech companies and how these companies have become too big to fail

E) None of the above

Question 2: Why has the author cited the example of Apple and Facebook in the first paragraph of the passage?

A) to highlight the growing role of tech companies in the economy

B) to highlight the growing influence of tech companies in the lives of the people

C) to highlight the growing popularity of mobile banking services in the West

D) to highlight the growing need of diversification of tech companies.

E) None of the above

Question 3: How did the 2008 financial crisis impact the banking sector?

1. It has made the bankers and politicians cautious because of which they have been resisting technological change.

2. Most of the western banks have adopted cost-cutting measures.

3. It led to the imposition of regulations which discouraged new ventures.

A) Only 1

B) Only 1 and 2

C) Only 2 and 3

D) Only 1 and 3

E) All 1, 2 and 3

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Question 4: As per the passage,which of the following statements is TRUE?

1. Neo-banks have threatened the dominance of big banks in America and Europe.

2. Venture capital firms see huge potential in the financial sector.

3. Neo banks do not have physical branches.

A) Only 1

B) Only 1 and 2

C) Only 2 and 3

D) Only 1 and 3

E) All 1, 2 and 3

Question 5: What would be the advantages of technological change in the banking sector?

A) Decrease in cost of operations, less intervention from bureaucracy

B) More transparency and creation of new job profiles

C) Better returns from investments and better premiums on insurance

D) Greater access to formal credit and lesser interest rates

E) None of the above

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Directions: Read the following passage carefully and answer the questions.

America has been baking this weekend. An estimated 128 million people along the East Coast and in the Midwest were affected by excessive-heat warnings. This particular heatwave is likely to fade quickly, but such events are becoming more common. The US Global Change Research programme has projected that by mid-century, there may be 20-30 more days each year in most parts of America when maximum temperatures exceed 32°C. It is a similar story elsewhere. Researchers think that a record-breaking heatwave in France earlier this summer was five times more likely than it would have been without global warming. Europe is set to experience another bout of very hot weather this week.

The prospect of more frequent and intense heat waves raises especially pointed questions for city officials, because surface air temperatures are higher in urban environments. This “urban heat-island effect” has several causes—including traffic and city layout. But its principal cause is simply that paved environments absorb more heat, whose release then warms the surrounding air. Daytime temperatures are 1-3°C higher in American cities than in surrounding rural areas; the differences are even starker at night. This phenomenon was first documented in the early 19th century by a meteorological pioneer called Luke Howard. In his three-volume The Climate of London, Howard concluded that “the temperature of the city is not to be considered as that of the climate; it partakes too much of an artificial warmth, induced by its structure, by a crowded population, and the consumption of great quantities of fuel in fires.”

The stakes are far higher today. More people are living in cities and temperatures are rising. This increases the risks to human health: one study into a heatwave in 2003 in the Midlands in Britain suggested that the heat-island effect was responsible for about half of the total heat-related mortality then experienced. Heat also worsens urban air quality by producing higher concentrations of ozone. Heat islands also have profound effects on emissions, as higher temperatures outside increase demand for energy inside. Higher urban air temperatures are responsible for 5–10% of peak electricity demand for air conditioning in America.

The structure of cities matters. Street canyons, roads flanked on both sides by high buildings, create shade but also have less exposure to the sky and less chance for heat to be transferred away into the surrounding air. A study in 2018 from the Massachusetts Institute of Technology found that grid layouts, like those in New York and Chicago, are considerably hotter than those that are more chaotic, such as Boston or London. Researchers surmised that heat coming off one building is more likely to be absorbed by another one opposite in grid layouts. Such lessons are more useful in places where cities are still being built out. Elsewhere, the emphasis is on changing the surfaces of cities. More vegetation is one obvious answer. Trees in particular offer lots of shade and, through a process called evapotranspiration, use energy from the sun to evaporate water within their leaves. That has a cooling effect; a study of street trees in California calculated that they were responsible for lower demand for air conditioning and net annual energy savings worth just over $100m. But trees take time to grow, and research is still needed on which varieties have the greatest cooling impact and grow best in cities.

Question 6: As per the passage, what is the chief cause of the urban heat-island effect?

1. Traffic

2. City layout

3. Paved environments

A) Only 3

B) Only 1 and 2

C) Only 1 and 3

D) Only 2 and 3

E) All 1,2 and 3

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Question 7: As per the passage, which of the following statements is true?

A) Luke Howard criticised the industrialists in his book.

B) Luke Howard was the first to establish a link between global warming and climate change.

C) In his book, Luke Howard talked about the ill-effects of industrialisation.

D) Luke Howard attributed the warm climate of London to global warming.

E) Luke Howard first documented the urban heat-island effect.

Question 8: Which of the following is an implication of the urban heat-island effect?

1. Increase in expenditure for the maintenance of infrastructure

2. Rise in energy demand

3. Adverse effect on emissions

A) Only 3

B) Only 1 and 2

C) Only 1 and 3

D) Only 2 and 3

E) All 1,2 and 3

Question 9: What course of action/(s) does the passage suggest in order to bring the urban temperatures down?

A) deploying shades to decrease exposure to sky

B) increasing vegetation cover in cities

C) flanking of roads on both sides

D) using grid layouts in cities

E) All of the above

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Question 10: Which of the following is closest in meaning to the word ‘worsens’ as used in the passage?

A) defends

B) typical

C) exacerbates

D) imitates

E) None of the above

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ANSWER KEYS and SOLUTIONS:

Solution 1: C)

(c) is the right answer. Refer to the lines: Over the past two decades people across the world have seen digital services transform the economy and their lives. Taxis, films, novels, noodles, doctors and dog-walkers can all be summoned with a tap of a screen. Giant firms in retailing, carmaking and the media have been humbled by new competitors. Yet one industry has withstood the tumult: banking.

Thus, the purpose of the author is to highlight the changes that have been brought by technology in the service sector. Moreover, the author has also singled out banking sector because he believes that the banking sector has been able to avoid disruption despite technological advances in the past decades.

Solution 2: C)

(c) is the right answer. Refer to the lines: In the West mobile banking is reaching critical mass—49% of Americans bank on their phones—and tech giants are muscling in. Apple unveiled a credit card with Goldman Sachs on March 25th. Facebook is proposing a payments service to let users buy tickets and settle bills. The passage states that mobile banking in the West has become popular and tech companies want to leverage the situation to their advantage.

A is incorrect. The passage does not discuss the role of tech companies in the economy.

B is incorrect. The passage does not talk about the impact of tech companies on the lives of people.

D is incorrect. The passage does not talk about the need of diversification of tech companies.

Solution 3: E)

(e) is the right answer. All three statements are correct.

1 is correct. Refer to the lines: Bankers and politicians may thus be tempted to resist technological change.

2 is correct. Refer to the lines: Banking is late to the smartphone age because entrepreneurs have been put off by regulations.

3 is correct. Refer to the lines: And, since the financial crisis, Western banks have been preoccupied with repairing their balance-sheets and old-fashioned cost-cutting.

Solution 4: E)

(e) is the right answer. All the three statements.

1 is correct. Refer to the lines: In America and Europe big banks are still more or less in control and are rushing to offer digital products. But threats loom.

2 is correct. Refer to the lines: Venture-capital firms invested $37bn in upstart financial firms last year.

3 is correct. Refer to the lines: Mobile-only neo-banks that do not bear the cost of branches are nibbling at customer bases.

Solution 5: A)

(a) is the right answer. Refer to the lines: The benefits of technological change are likely to be vast. Costs should tumble as branches are shut, creaking mainframe systems retired and bureaucracy culled. Thus, decrease in the cost of operations and less intervention from bureaucracy are the advantages of technological change in the banking sector. The other options have not been stated in the passage.

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Solution 6: A)

(a) is the right answer. Refer to the lines: This “urban heat-island effect” has several causes—including traffic and city layout. But its principal cause is simply that paved environments absorb more heat, whose release then warms the surrounding air. The passage explicitly states that the main reason behind the urban heat-island effect are paved environments as they absorb more heat and they warm up the surrounding air. Neither (1) nor (2) has been listed as the major cause of the urban heat-island effect.

Solution 7: E)

(e) is the right answer. Refer to the lines: This phenomenon was first documented in the early 19th century by a meteorological pioneer called Luke Howard. The phenomenon that is being referred to here is the urban heat-island effect. The other options are incorrect as they are neither mentioned nor can they be deduced from the passage.

Solution 8: D)

(d) is the right answer. Refer to the lines: Heat islands also have profound effects on emissions, as higher temperatures outside increase demand for energy inside. Higher urban air temperatures are responsible for 5–10% of peak electricity demand for air conditioning in America. Thus, both (2) and (3) can be caused by urban heat-island effect. (1) is incorrect as it has not been mentioned in the passage.

Solution 9: E)

(e) is the right answer. All the options have been mentioned in the passage.

(a) and (c) are correct. Refer to the lines: Street canyons, roads flanked on both sides by high buildings, create shade but also have less exposure to the sky and less chance for heat to be transferred away into the surrounding air.

(b) is correct. Refer to the lines: More vegetation is one obvious answer.

(d) is correct. Refer to the lines: Researchers surmised that heat coming off one building is more likely to be absorbed by another one opposite in grid layouts.

Solution 10: C)

(c) is the right answer. If a bad situation WORSENS or if something worsens it, it becomes more difficult, unpleasant, or unacceptable. EXACERBATES is a synonym.

DEFEND- resist an attack made on (someone or something); protect from harm or danger

TYPICAL- having the distinctive qualities of a particular type of person or thing

IMITATE- to copy someone

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This brings us to the end of the article. Practice these passages and be english ready for the upcoming SBI Clerk Prelims & RBI Assistant Mains exams.

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