Verbal Ability

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1). Let us take a look at the manner in which the traditional bank adds value to the customer.

2). The ability to retain deposits, in itself, is not enough to ensure long-term survival and growth.

3). The ability to deploy invested funds into productive economic activity at a higher rate of return, hence contributing to the prosperity of both the economy and the institution, is the other loop in the banking cycle.

4). Further, as only a small portion of the actual deposit base is retained with the bank in a liquid form, the very survival of the bank lies in building enough trust with its clientele so as to prevent the occurrence of a sizeable chunk of simultaneous customer withdrawal (a run on the bank).

5). The bank's basic job is risk absorption- it takes money, which has a lot of attached risk, and provides the customer an assured rate of return.









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Option(D) is correct

The paragraph has to begin with 1, and it is 5(not 2) which explains the purpose of banking. 2 qualifies it further. Thus option D is correct.

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