UPSC Prelims 2005 Q140: Indian Economy – Banking & Financial Sector
Consider the following statements:
1. Global Trust Bank has been amalgamated with the Punjab National Bank.
2. The second report of the Kelkar Committee dealing with direct and indirect taxes has
maintained its original recommendations, including the abolition of exemptions relating to
housing loans.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer: (d) Neither 1 nor 2
Explanation
Global Trust Bank and the Kelkar Committee
| Statement | Verdict |
|---|---|
| 1. GTB amalgamated with Punjab National Bank | False: GTB was merged with Oriental Bank of Commerce (2004) |
| 2. Kelkar Committee kept its housing-loan exemption recommendations | False: the second report did not retain the abolition of such exemptions |
Neither statement is correct.
Answer: (d) Neither 1 nor 2.
Why each option is right or wrong
- (a) Incorrect. GTB merged with Oriental Bank of Commerce.
- (b) Incorrect. The second report revised the earlier stand.
- (c) Incorrect. Both statements are false.
- (d) CORRECT. Neither statement is correct.
Key point
GTB: Oriental Bank of Commerce, 2004; Kelkar Task Force on direct and indirect taxes.
Remember
Global Trust Bank merged with Oriental Bank of Commerce.
Common mistakes
- Choosing PNB as the acquirer of the bank.
- Assuming the Kelkar panel never changed its stand.
- Mixing the Kelkar report with the Chelliah report.
Exam tip
Bank mergers: GTB with OBC, Bank of Madura with ICICI.
Sources
- Reserve Bank of India — Annual Report 2004–05
- Ministry of Finance, Government of India — Report of the Task Force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003 (Kelkar Task Force), 2004