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    Question

    Consider the following statements about the banking

    sector's performance in FY24 and FY25: 1. Crisil forecasts a 14% credit growth for the banking sector in FY25, which is a decline from the previous year. 2. Deposit growth was projected to surpass credit growth in FY25. 3. The slowdown in credit growth in FY25 is partially attributed to the RBI's higher risk weights on unsecured loans. Which of the statements is/are correct?
    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C 1 and 3 only Correct Answer Incorrect Answer
    D 2 and 3 only Correct Answer Incorrect Answer
    E 1, 2, and 3 Correct Answer Incorrect Answer

    Solution

    Statement 1 is correct as Crisil indeed forecasts a decline in credit growth to 14% in FY25. Statement 3 is also correct; the slowdown is attributed to higher risk weights on unsecured loans by the RBI. However, Statement 2 is incorrect; deposit growth is not projected to surpass credit growth but is lagging, which could restrain credit expansion.

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