The option to be eliminated is A, which talks of the effect of NPA accumulation – a plunge in industrial credit growth rate. None of the other sentences relate to this. B is slightly tricky to place right away, so let's look at C and D. C states that NPAs have arisen in the Indian banking system due to reasons beyond the control of public sector banks. So what are the reasons for this problem? D provides the answers. So, D follows C. Now, according to B, there are cases of bad loans where the repayment problems have been caused by "diversion of funds". Clearly, B relates to the idea in C and D, as it talks of why loans turn bad. B concedes that some bad loans are caused by diversion of funds. D, on the other hand, states the reasons for the bulk of the problem. So, D follows B. CBD makes a cogent paragraph. The option to be eliminated is A. Correct Answer: Choice (A)
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