Daily Prelims Notes 18 October 2023

Daily Prelims Notes

18 October 2023

Table Of Contents

1. Committee on the Status of Women in India (CSWI)
2. Speaker not doing his job, giving final opportunity says top court
3. Rafah Border Crossing
4. Indus Shield 2023
5. SC verdict on same sex marriages
6. Transpersons have right to marry under existing law
7. SC divided on allowing unmarried couples to adopt children jointly
8. UN approved a Kenya-led security mission to troubled Haiti
9. SC in Delhi Excise Case: ‘predicate offence’ necessary for PMLA violations
10. Monetary policy transmission in India
11. Penalties Imposed by RBI on Banks
12. Issues with AIFs in India
13. When tigers and jackals get the same protection
14. Modi ‘directs’ ISRO to land man on moon by 2040, work towards interplanetary missions
15. Lao PDR becomes second country in 2023 after Bangladesh to eliminate lymphatic filariasis
16. New evolutionary law explains how living beings, minerals & species evolve
17. Enthusiasm among birdwatchers as orange-headed thrush sighting recorded in Gujarat in a first
18. Nepal and India Agree to Reduce Height of Saptakoshi Dam
19. Red tide

1. Committee on the Status of Women in India (CSWI)

Subject: Schemes

What is Committee on the Status of Women in India (CSWI):

• The Committee on the Status of Women in India (CSWI) was appointed by the Ministry of Education and Social Welfare, Government of India, in 1971. 
• Its primary purpose was to study the status of women in India.
• The CSWI was established in response to a request from the United Nations for a status of women report for International Women’s Year in 1975.
• The committee had two main tasks: 
  • Examining the constitutional, legal, administrative provisions related to the social status of women, their education, and employment, and assessing the impact of these provisions.
• The CSWI’s report, titled “Towards Equality,” concluded that there had been an increase in the marginalization of women in the economy and society. It noted declining sex ratios, disparities in life expectancy and death rates between men and women, and challenges in women’s access to literacy, education, and livelihood opportunities.
• The report contributed to a broader understanding of gender-related challenges and played a role in shaping subsequent policies and initiatives aimed at improving the status of women in India.
• In 1974, the Committee on the Status of Women in India (CSWI) deliberated on women’s reservation in politics. Proponents argued it would boost women’s representation, but the majority upheld gender equality principles, rejecting the idea
• The Committee on the Status of Women in India (CSWI) recommended the setting up of a National Commission for women to fulfil the surveillance functions to facilitate redressal of grievances and to accelerate the socio-economic development of women

What is the Commission on the Status of Women (CSW):

• The UNCSW or simply CSW is the chief international inter-governmental body dedicated to the promotion of women empowerment and gender equality.
• It functions under the Economic and Social Council (ECOSOC), one of the principal organs of the United Nations.
• It was established in 1946 by a resolution of the ECOSOC.
• The CSW documents the condition of women’s lives the world over and also strives for setting global standards on women empowerment and gender equality.
• In 1996, the ECOSOC expanded the mandate of the Commission to include supervising and reviewing progress and problems in the implementation of the Beijing Declaration and Platform for Action.
• The expanded mandate also includes bringing in a gender perspective in all of the UN’s activities.
• The Commission is supported in its work by UN Women, which is its Secretariat.
• CSW is headquartered in New York, USA.

2. Speaker not doing his job, giving final opportunity says top court

Subject :Polity

Section: Parliament

Context: Supreme Court gives ‘final opportunity’ to Maharashtra Speaker to give ‘realistic’ timeline to decide disqualification pleas

More about the news:

• The Supreme Court has given the Speaker of the Maharashtra Legislative Assembly, Rahul Narwekar, a final chance to provide a realistic timeline for resolving disqualification petitions stemming from a rift within the Shiv Sena political party.
• The Court expressed displeasure over the delay in these cases and noted that the Speaker, acting as a tribunal in these proceedings, is subject to the Court’s jurisdiction.
• Previously, a Constitution bench had emphasized the need for expedited resolution of disqualification petitions, and the Court insisted on a more reasonable schedule.
• The next hearing is scheduled for October 30, with the Solicitor General agreeing to work with the Speaker to establish clear modalities for swift resolution.

What is the Anti-Defection Law:

• Defection, in the context of politics, pertains to the act of changing one’s political allegiance. It specifically involves a member of a political party leaving their party to either join another party or become an independent representative.
• Anti-defection Law in India was enacted in 1985 through the 52nd Amendment Act of 1985 as part of the Tenth Schedule of the Constitution of India.
• Anti-defection laws aim to prevent or discourage defection by imposing penalties on politicians who switch parties or otherwise violate party discipline.

What are the important provisions of the Anti-Defection Law:

• Disqualification: A member of a House belonging to any political party becomes disqualified for being a member of the House,
  • If he voluntarily gives up his membership of such a political party; or
  • If he votes or abstains from voting in such House contrary to any direction issued by his political party without obtaining prior permission of such party and his abstention from voting should not be condoned by his party or the authorized person within 15 days of such incident.
• Independent Members: An independent member of a House becomes disqualified from remaining a member of the House if he joins any political party after such an election.
• Nominated Members: A nominated member of a House becomes disqualified for being a member of the House if he joins any political party after the expiry of six months from the date he takes his seat in the House.
• Exceptions: The above disqualification on the ground of defection does not apply in the following two cases:
  • Merger: If a member goes out of his party due to a merger of the party with another party. A merger takes place when two-thirds of the members of the party have agreed to such a merger.
  • Presiding Officer: If a member, after being elected as the presiding officer of the House, voluntarily gives up the membership of his party or rejoins it after he ceases to hold that office. This exemption has been provided in view of the dignity and impartiality of this office. 
• Deciding Authority: The Speaker of the House or the Chairman of the Legislative Council, as the case may be, has the authority to decide on questions relating to defection, and his or her decision is final and cannot be challenged in any court.
• Rule-Making Power: The presiding officer of a House is empowered to make rules to give effect to the provisions of the Tenth Schedule. According to the rules made so, the presiding officer can take up a defection case only when he receives a complaint from a member of the House. 
• Role of Whip:  The whip is responsible for communicating the party’s position to its members and ensuring they vote in line with that position. In the case of a member defying the whip and voting against the party’s official position, they may be subject to disciplinary action under the anti-defection law.

3. Rafah Border Crossing

Subject : IR

Section: Places in news

Context: Egypt is keeping the Gaza Rafah border shut.

Where is the Rafah crossing and who controls it

• It is crossing between the Gaza Strip and Egypt and is the sole route for aid to enter Gaza directly outside Israel.
• It is the only exit that does not lead to Israeli territory.
• The crossing is at the south of the Gaza Strip and wedged between Israel, Egypt and the Mediterranean Sea.
• The crossing is controlled by Egypt.
• There are only two other border crossings i.e. Erez, a border crossing with Israel in north Gaza, and Kerem Shalom, a commercial crossing between Israel and Southern Gaza.

Why is history Of Rafah Crossing

• 1906 Ottoman-British Agreement: Established the border between Ottoman-ruled Palestine and British-ruled Egypt, running from Taba to Rafah.
• 1979 Egyptian-Israeli Peace Treaty: Restored the 1906 border, giving Egypt control of Sinai and Israel control of Gaza. Rafah Crossing became an international border.
• 1982 Gaza-Egypt Border: Opened after the Camp David Accords, but Israel-controlled border crossings remained a concern.
• 1994 Gaza-Jericho Agreement: Gave Palestinian Authority (PA) limited control over Rafah Crossing, but Israel maintained overall security control.
• 2000 Ariel Sharon Incident: Sharon’s visit to Al-Aqsa Mosque triggered the Second Intifada, affecting Rafah Crossing’s complexities.
• 2001 Israeli Ban on Palestinian Workers: Israel excluded Palestinian personnel from working at Rafah Crossing due to the Second Intifada.
• 2005 Agreement on Movement and Access (AMA): Brought the crossing under Palestinian control but allowed Israel to close it at will.
• 2006 Closure after Gilad Shalit’s Capture: Israel closed Rafah Crossing in response to Shalit’s capture, remaining closed for a year.
• 2011 Arab Spring: Mubarak’s exit in Egypt led to regular reopening of Rafah Crossing. However, Sisi’s coup in 2013 closed it again.
• COVID-19: In 2020, Hamas closed the crossing due to the pandemic.
• 2021 Reopening: After international borders eased, Hamas and Egypt held talks and reopened Rafah Crossing.

4. Indus Shield 2023

Subject :IR

Section: Msc

Context: The Pakistan Air Force (PAF) launched Indus Shield 2023, a 14-nation exercise, at one of its operational bases in the country

More about the news:

• The Pakistan Air Force (PAF) launched Indus Shield 2023, a 14-nation exercise, at one of its operational bases in the country.
• The countries participating in the exercise are Azerbaijan, Bahrain, China, Egypt, Germany, Hungary, Indonesia, Iran, Italy, Kuwait, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Türkiye, the UAE, and Uzbekistan.

5. SC verdict on same sex marriages

Subject: Polity

Section: Constitution

More about the news:

• A five-judge Supreme Court bench, led by Chief Justice DY Chandrachud, issued a unanimous ruling against legalizing same-sex marriage in India, also rejecting civil unions for non-heterosexual couples in a 3:2 verdict.
• They stated that Parliament should decide on the issue, emphasizing the inability of the court to alter provisions or interpretations of the Special Marriage Act.
• The petitions aimed for a gender-neutral reading of the Special Marriage Act to include same-sex marriages, but the majority view was that there is no fundamental right to marry.
• The court deliberated for ten days in April and May, considering various arguments related to equality, privacy, legal rights, and the impact on children.
• Opponents included the Central government, the NCPCR, and the Jamiat-Ulama-i-Hind.

What are the key takeaways from the verdict

• Right to marry not a fundamental right
  • All five judges on the Bench agreed that there is no fundamental right to marry under the Constitution.
• Not possible to tweak the Special Marriage Act (SMA), 1954
  • All five judges also unanimously agreed that it is not possible to tweak the Special Marriage Act ,1954 by using gender neutral language to allow same-sex marriage.
  • Alternatively, the petitioners had asked for striking down provisions of the SMA that are gender-restrictive.
  • CJI said striking down the SMA provisions would jeopardize the legal framework for interfaith and inter-caste couples.
  • He added that interpreting the SMA in a gender-neutral way would amount to judicial lawmaking, which would violate the doctrine of separation of powers.
• Declined to allow civil unions for non-heterosexual couples:
  • The bench ruled in a 3:2 verdict against civil unions for non-heterosexual couples.
  • The dissenting judges said that the right to form unions emanates from the fundamental right to freedom of speech and expression, and the right to life.
  • The minority views of the two judges held that the right to enter into a union cannot be restricted on the basis of sexual orientation.
  • Discrimination on the basis of sexual orientation is violative of Article 15 of the Constitution.
  • The majority views held that it was for the legislature, and not the Court, to formally recognise and grant legal status to non-heterosexual relationships.
• On the bouquet of rights
  • All five judges acknowledged that a high-level Cabinet committee will assess the rights for non-heterosexual couples, including joint bank accounts, beneficiary status in financial matters, and the ability to make medical decisions for one another.
• On rights to adopt children
• The Supreme Court unanimously recognized that one’s sexual orientation should not determine their suitability as adoptive parents.
• However, in a 3:2 split verdict, the existing regulations denying unmarried and queer couples the right to adopt children as a couple were upheld.
• Due to the inability for same-sex couples to marry under Indian law, they resorted to designating one partner as the legal parent, a practice subsequently addressed by the Central Adoption Resource Authority (CARA) in 2022.
• CARA imposed stricter regulations, requiring couples to be in a stable marital relationship for two years and prohibiting adoption for those in live-in relationships, thereby rendering queer couples ineligible to adopt.
• The minority view by CJI Chandrachud and Justice Kaul said the CARA guidelines discriminate against atypical, unmarried couples to adopt children.

What is Special Marriage Act:

• The Special Marriage Act of 1954 (SMA) provides an alternate route to religious laws for marriage.
•  It governs a civil marriage where the state sanctions the marriage rather than the religion.

Who can get married under the Special Marriage Act:

• The applicability of the Act extends to the people of all faiths, including Hindus, Muslims, Sikhs, Christians, Sikhs, Jains, and Buddhists, across India.
• The minimum age to get married under the Special Marriage Act is 21 years for males and 18 years for females.

What are the provisions of Special Marriage Act:

• As per Section 5 of the Act, the parties to the marriage are required to give a notice, in writing, to a “Marriage Officer” of the district in which at least one of the parties has resided for at least 30 days immediately preceding the notice.
• The parties and three witnesses are required to sign a declaration form before the Marriage Officer.
• Once the declaration is accepted, the parties will be given a “Certificate of marriage” which is essentially proof of the marriage

6. Transpersons have right to marry under existing law

Subject: Polity

Section: Constitution

Context:

The Supreme Court on Tuesday held that transgender persons in heterosexual relationships have the right to marry under existing law.

About Judgment:

• A Constitution Bench headed by Chief Justice of India D.Y. Chandrachud held that “transgender persons in heterosexual relationships have the freedom and entitlement to marry under the existing statutory provisions”.
• The gender of a person is not the same as their sexuality. A person is a transgender person by virtue of their gender identity. A transgender person may be heterosexual or homosexual or of any other sexuality.
• If a transgender person is in a heterosexual relationship and wishes to marry their partner (and if each of them meets the other requirements set out in the applicable law), such a marriage would be recognised by the laws governing marriage.
• Since a transgender person can be in a heterosexual relationship like a cismale or cis­female, a union between a transwoman and a transman, or a transwoman and a cisman, or a trans man  and a ciswoman can be registered under marriage laws.
• A transgender man has the right to marry a cisgender woman under the laws governing marriage in the country, including personal laws.
• Similarly, a transgender woman has the right to marry a cisgender man. A transgender man and a transgender woman can also marry.

7. SC divided on allowing unmarried couples to adopt children jointly

Subject: Polity

Section: Constitution

Context:

• The Constitution Bench, which delivered a majority judgment in the same­ sex marriage case on Tuesday, was divided in its opinions on whether unmarried couples, including same sex partners, can jointly adopt children.
• Chief Justice D.Y. Chandrachud held that Regulation 5(3) of the Adoption Regulations, which bars unmarried partners from being prospective adoptive parents, was ultra vires the Juvenile Justice (JJ) Act and violative of the  fundamental rights of queer couples.

Laws Related to Adoption in India:

• Adoptions in India are governed by two laws: the Hindu Adoption and Maintenance Act, 1956 (HAMA) and the Juvenile Justice Act, 2015.
• Both laws have their separate eligibility criteria for adoptive parents.
• Those applying under the JJ Act have to register on CARA’s portal after which a specialised adoption agency carries out a home study report.
• After it finds the candidate eligible for adoption, a child declared legally free for adoption is referred to the applicant.
• Under HAMA, a “dattakahom” ceremony or an adoption deed or a court order is sufficient to obtain irrevocable adoption rights.
• Hindus, Buddhists, Jains, and Sikhs are legalized to adopt kids under this Act.

Recent Development:

• The Parliament passed the Juvenile Justice (Care and Protection of Children) Amendment Act, 2021 in order to amend the Juvenile Justice Act (JJ Act), 2015.
• The key changes include authorising District Magistrates and Additional District Magistrates to issue adoption orders under Section 61 of the JJ Act.
• Earlier in JJ Act 2015, adoption of a child is final on the issuance of an adoption order by the civil court.
• The Ministry of Women and Child Development has introduced the Adoption Regulations-2022, which has streamlined the adoption process.
• District Magistrates (DMs) and Child Welfare Committees have been directed to upload adoption orders and case status in real time.
• Since the implementation of the Adoption Regulations-2022, 2,297 adoption orders have been issued by DMs nationwide, resolving a significant portion of pending cases.

What are the Major Challenges Related to Adoption in India?

• Lengthy and Complex Adoption Process: The adoption process in India can be lengthy, bureaucratic, and complex, leading to delays in the placement of children with suitable families.
• India’s tedious and interminable adoption process can clearly be seen in the statistics with the CARA which states that while more than 30,000 prospective parents are currently waiting to adopt, less than 7% the number of children — 2131— are legally free for adoption.
• Around two-third of them are children with special needs, and it takes three years for an adoption process to complete.
• Illegal and Unregulated Practices: Unfortunately, there are instances of illegal and unregulated adoption practices in India. This includes baby trafficking, child-selling, and the existence of unregistered adoption agencies, which exploit vulnerable children and biological parents.
• In 2018, Ranchi’s Mother Teresa’s Missionaries of Charity came under fire for its “baby-selling racket” after a nun from the shelter confessed to selling four children.
• Returning Children after Adoption: India also faces an unusual upsurge in adoptive parents returning children after adopting.
• In 2020, CARA stated that over 1,100 children adopted across the country have been returned to child care institutions by their adoptive parents in the last five years.

8. UN approved a Kenya-led security mission to troubled Haiti

Subject :IR

Section: Places in news

Context:

• The UNSC has approved international intervention in the form of a foreign security mission, led by Kenya, to restore security, and control spiralling violence in Haiti.
• The United Nations Security Council (UNSC) voted to adopt the resolution in this regard.

Where is Haiti?

• Haiti occupies the western one-third of the island of Hispaniola, situated between Cuba and Puerto Rico, which it shares with the Dominican Republic.
• The Atlantic Ocean borders Haiti’s northern shores, while the Caribbean Sea is to the west and south.

Violence in Haiti

• Haiti has experienced a surge in violence over the past year as armed groups took control of large parts of the country, including the capital Port-au-Prince.
• This has resulted in widespread killings of nearly 2,800 people, including 80 minors, between October 2022 and June 2023.
• Human rights groups have reported a rise in sexual violence and crimes against women.
• In addition to this, mass looting and burning of houses have led to the displacement of thousands of people, with around 200,000 fleeing their homes.
• As per estimates, almost half the population is in need of humanitarian assistance.

Why is the UN sending a multinational security mission to Haiti?

• Haitian Prime Minister Ariel Henry first sought international support to assist the national police in October 2022.
• This was after the country plunged into a crisis when a group of gangs called G9 and Family seized control of the entry of the main fuel port Varreux in the capital.
• They were protesting the PM’s decision to cut fuel subsidies.
• To make matters worse, there was a shortage of bottled water in the backdrop of a new outbreak of cholera.
• As the crisis deepened and overwhelmed the short-staffed police force, Haitian leaders turned to the international community for help.
• They sought a specialised armed force to counter gangs and their sponsors.

About the mission:

1. Not operated by the UN

• Unlike the U.N. peacekeeping mission to Haiti that ended in 2017, the multi-national security mission approved by the UNSC will not be operated by the United Nations.
• Kenya has volunteered to lead the force. Other countries like the Bahamas, Jamaica and Antigua and Barbuda have also offered support.

2. Operational support to the Haitian National Police

• The force will provide operational support to the Haitian National Police.
• This includes building its capacity to counter gangs, improve security conditions in the country and secure ports, airports and critical intersections.
• The forces will have the authority to make arrests in coordination with Haitian police.
• It also intends to create favourable conditions in the country to pave the way for elections. Polls have not taken place in Haiti since 2016.

3. Support from US

• The United States has made it clear that it won’t send its troops.
• It, however, has pledged $100 million in logistical support like intelligence, communications, airlift operations and medical aid.

What led to the delay in intervention?

• Haiti’s troubled past with foreign military interventions is being viewed as the primary reason for the delay in the deployment of a multinational security mission to counter the gang violence in the country.
• The last time a force was sent to stabilise Haiti was in 2004 when former Haitian President Jean-Bertrand Aristide was overthrown in a rebellion.
• This was followed by a U.N. peacekeeping mission — the United Nations Stabilisation Mission in Haiti (MINUSTAH) which went on from 2004 to 2017.
• The mission was marred by allegations during its deployment in the country.
• A sewage runoff from a peacekeeper camp was blamed for causing a cholera epidemic which saw more than 10,000 deaths.
• There were also serious allegations of sexual abuse against the U.N. peacekeepers.
• Since then, Haitians have been sceptical about the intervention of a foreign armed force.
• Besides the country’s troubled past with interventions under the aegis of the U.N., countries were also wary of lending support to Prime Minister Henry who does not enjoy the popular support of Haitians.

9. SC in Delhi Excise Case: ‘predicate offence’ necessary for PMLA violations

Subject :Polity

Section: Legislation in news

In News: The Supreme Court has noted the necessity of a predicate offense of bribery against Manish Sisodia for PMLA charge of money laundering to stand.

Key Points:

• Enforcement Directorate (ED) is presently holding Manish Sisodia under arrest under money laundering charges. The Supreme Court (SC) was hearing two separate bail pleas by former Delhi Excise Minister and the Deputy CM Manish Sisodia in corruption and money laundering cases.
• The court noted that for the PMLA norm to be valid there has to be an alleged “predicate offence”.

What is a predicate offence?

• Predicate offenses in money laundering refers to a crime component of a larger crime. Predicate offences or underlying offences serve as the foundation for money laundering activities.
• In a financial context, the predicate offense would be any crime that generates monetary proceeds. These offences encompass a broad range of illegal activities that generate funds from unlawful sources.
• The larger crime would be money laundering or financing of terrorism. Money laundering serves as the mechanism through which the proceeds of predicate offences are concealed, transformed, and integrated into the legitimate financial system.
• A predicate offence is a crime that is a component of a more serious crime. For example, producing unlawful funds is the primary offence, and money laundering is the predicate offence.

What is the Delhi liquor excise case?

• Delhi government implemented the policy on November 17, 2021 but scrapped it at the end of September 2022 amid allegations of corruption.
• Under the new policy, according to the investigating agencies, the profit margin of wholesalers was increased from 5 per cent to 12 per cent for monetary considerations.
• The probe agencies have alleged that the new policy resulted in cartelisation and those ineligible for liquor licences were favoured for monetary benefits.
• However, the Delhi government and Sisodia have denied any wrongdoing and said the new policy would have led to an increase in the state’s excise revenue.
• The High court had declined him bail in the money laundering case linked to alleged irregularities in the city government’s excise policy, holding that the charges against him are “very serious in nature”.

10. Monetary policy transmission in India

Subject :Economy

Section: Monetary Policy

The RBI’s rate hikes since 2022 have highlighted a disparity in the transmission of policy rate changes, with lending rates increasing at a slower pace compared to deposit rates. This phenomenon has been particularly noticeable in the current economic cycle, presenting various implications for different stakeholders in the financial system.

• Deposit Rate Increase: The Weighted Average Domestic Term Deposit Rates (WADTDR) for fresh deposits have witnessed a significant rise, partly driven by banks’ requirements for funds to support rapid credit growth. Larger depositors have received relatively higher rewards compared to smaller ones.
• Limited Transmission in Lending Rates: Despite the policy rate hikes, lending rates have not increased at a proportionate rate. The overall increase in lending rates has been notably lower than that of deposit rates, with existing loan rates exhibiting a slower rise.
• Impact of CASA Deposits: Banks have managed to maintain lower lending rates by leveraging their current account and savings account (CASA) deposits, which constitute a significant portion of their total deposits. These accounts have not experienced any changes in interest rates during this cycle, allowing banks to sustain comparatively lower lending rates.
• Effect of MCLR and EBLR Loans: While a significant proportion of loans (around 44.8%) remain linked to the Marginal Cost of Funds Based Lending Rate (MCLR), the transmission of rate changes is relatively slower due to various operational factors influencing the MCLR calculation. Conversely, loans (around 50.2%) linked to the External Benchmark Linked Loan Rate (EBLR) have the advantage of immediate resetting when policy rates change, ensuring a more rapid transmission of rate changes.
• Competition for Deposits and Incremental Credit: Tight liquidity conditions have intensified competition among banks for deposits, potentially leading to increased rates for depositors. Simultaneously, competition for incremental credit might have restrained some banks from sharply increasing lending rates, especially in specific segments like housing, vehicle, and education loans.

About Internal Benchmark Lending Rate (IBLR):

• Lenders establish an internal benchmark rate for determining interest rates on loans.
• Several benchmark rates were introduced over the years, including BPLR, Base Rate, and MCLR.
• These rates aimed to ensure transparent and efficient pricing in the lending market.

Issues with IBLR Regime:

• Banks often did not pass on the full benefits of RBI’s repo rate cuts to borrowers.
• Complex internal variables within the IBLR-linked loans hindered the seamless transmission of policy changes.

BPLR (Benchmark Prime Lending Rate):

1. Used as a benchmark rate by banks for lending until June 2010.
2. Loans were priced based on the actual cost of funds.
3. The rate varied across banks and depended on the cost of funds, among other factors.

Base Rate:

1. Replaced BPLR and was used for loans taken between June 2010 and April 2016.
2. Considered the minimum interest rate at which commercial banks could lend to customers.
3. Calculated based on the cost of funds, unallocated cost of resources, and return on net worth.

MCLR (Marginal Cost of Funds based Lending Rate):

1. Introduced in April 2016 as a benchmark lending rate for floating-rate loans.
2. Considers the marginal cost of funds, negative carry on account of the cash reserve ratio, operating costs, and tenor premium.
3. Linked to actual deposit rates, ensuring that when deposit rates rise, MCLR increases and lending rates go up accordingly.

External Benchmark Lending Rate (EBLR):

1. RBI mandated the adoption of a uniform external benchmark by banks from October 1, 2019, it was intended to plug the deficiencies in MCLR.
2. Four external benchmarking mechanisms were introduced, RBI repo rate, 91-day T-bill yield, 182-day T-bill yield, any other benchmark market interest rate as developed by the Financial Benchmarks India Pvt. Ltd.
3. Banks have the flexibility to set the spread over the external benchmark, with interest rate resets required at least once every three months.

Significance of EBLR:

1. Aims to facilitate faster and effective transmission of monetary policy changes.
2. Enhances transparency in interest rate setting and standardizes the process of fixing interest rates for different loan categories.
3. Introduces a more dynamic and responsive lending environment in line with the objectives of the RBI’s monetary policy framework.

Monetary Policy Normalization in India:

1. Involves adjustments made by the Reserve Bank of India to control the amount of money in the economy.
2. Entails a shift from a loose monetary policy, involving increased liquidity and reduced interest rates, to a tight monetary policy that raises interest rates and reduces liquidity.

Reverse Repo Normalization:

1. Refers to an increase in the reverse repo rates by the Reserve Bank of India.
2. Part of the broader strategy of monetary policy normalization to counter rising inflation and bring the rates back to their usual positions.
3. Aims to reduce excess liquidity, elevate interest rates across the economy, and discourage excessive borrowing by consumers and businesses.

Repo Rate:

• The rate at which the RBI lends short-term money to banks against securities.
• One of the key tools used by the central bank to control the money supply in the economy.

Reverse Repo Rate:

• The rate at which banks park their short-term excess liquidity with the RBI.
• Used by banks when they have surplus funds that they are not able to invest for reasonable returns.

SLR (Statutory Liquidity Ratio):

• Mandates that every bank maintain a minimum proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash, gold, and un-encumbered approved securities.
• A tool used by the RBI to restrict the bank’s leverage position to pump more money into the economy.

CRR (Cash Reserve Ratio):

• Mandates that banks hold a certain proportion of their deposits in the form of cash with the RBI or currency chests.
• Used by the RBI to control liquidity in the banking system and ensure that banks have enough cash to meet their payment obligations.

Marginal Standing Facility (MSF):

• A window for banks to borrow from the Reserve Bank of India during emergency situations when inter-bank liquidity dries up completely.
• Banks pledge government securities at a rate higher than the repo rate under the Liquidity Adjustment Facility (LAF).

11. Penalties Imposed by RBI on Banks

Subject :Economy

Section: Monetary Policy

• ICICI Bank: Fined ₹12.19 crore for various violations, including sanctioning loans to companies where two directors were board members, marketing non-financial products, and failing to report frauds to the RBI within the prescribed timeline.
• Kotak Mahindra Bank: Penalized ₹3.95 crore for failing to conduct the annual review and due diligence of service providers, breaching customer contact time restrictions, and incorrectly levying interest and foreclosure charges.

Reasons for Penalty: 

• ICICI Bank: Violations of certain sections of the Banking Regulation Act, 1949, and non-compliance with RBI’s directions on loans, advances, financial services, and fraud classification and reporting by commercial banks.
• Kotak Mahindra Bank: Non-compliance with RBI’s directions on managing risks, code of conduct in outsourcing financial services, recovery agents engaged by banks, customer service, and loans and advances statutory restrictions.

Background:

• ICICI Bank previously faced penalties in March 2018 for non-compliance with directions on the direct sale of securities from its HTM portfolio and specified disclosures.
• Both banks were cautioned that the RBI’s action does not determine the validity of any transaction or agreement with their customers.

About Banking Regulation Act, 1949

The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in the country. It was enacted as per the recommendations of the Committee on Indian Financial System (CIFR), also known as the Gadgil Committee report. The primary objective of the act is to consolidate and amend the law related to banking in order to secure monetary stability and ensure a healthy banking system in India.

The Banking Regulation Act, 1949 empowers the Reserve Bank of India (RBI) to regulate the functioning of banks in India. It provides detailed guidelines for the licensing of banks, management of banking companies, regulation of the paid-up capital and reserves of banks, and more. The act also outlines the provisions for the nationalization of private banks in India.

Some key features of the Banking Regulation Act, 1949 include:

1. Licensing of Banks: The act lays down the conditions for obtaining a banking license in India.
2. Reserve Bank’s Powers: The act provides the Reserve Bank of India with the authority to inspect, regulate, and supervise the functioning of banks in India.
3. Shareholding Regulations: The act sets the maximum limit for the shareholding of any individual or entity in a banking company.
4. Branch Expansion: It regulates the opening of new bank branches and imposes certain restrictions on their operations.
5. Control Over Management: The act enables the RBI to control the appointment and functioning of the management of banks.
6. Regulation of Operations: It provides guidelines for various aspects of banking operations, such as loans and advances, investments, and reserves.

About Held-to-Maturity (HTM) securities

• Held-to-Maturity (HTM) securities refer to debt securities that a company or financial institution intends to hold until they mature.
• These securities are accounted for at amortized cost, and any unrealized gains or losses are not recognized in the financial statements.
• They are classified as non-trading assets, and any changes in their market value do not affect the income statement.
• HTM securities provide a stable income stream as they offer fixed interest payments until their maturity date.

12. Issues with AIFs in India

Subject :Economy

Section: Capital market

AIF Investigations by SEBI:

• SEBI and RBI are investigating around a dozen cases of alternate investment funds (AIFs) allegedly being used to circumvent regulations.
• AIFs are under scrutiny for potential misuse, including the practice of “evergreening” stressed loans.

Misuse Cases and Evergreening Loans:

• SEBI has identified cases amounting to ₹15,000-20,000 crore where AIFs were misused to circumvent rules of financial regulators, including the RBI.
• Instances of non-bank lenders using AIFs to repurchase stressed loans to prevent them from turning bad have been reported, which is seen as “classic evergreening.”

Other Investigated Cases:

• AIFs have been reportedly used to bypass foreign investment caps in certain sectors.
• Some cases involving the evasion of insolvency regulations through AIFs are also under investigation.

SEBI’s Measures and Circulars:

• SEBI has asked AIFs to report both assets and liabilities through India’s depositories.
• The regulatory authority has proposed measures to stop priority payouts to investors in credit funds, which have been put on hold following industry resistance.

About AIFs:

As per Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, AIFs refer to privately pooled investment funds, either from Indian or foreign sources, in the form of a trust, company, body corporate, or Limited Liability Partnership (LLP).

AIFs do not include funds covered under SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999, or any other regulations of the Board regulating fund management activities.

Categories of AIFs:

AIFs are classified into three categories based on their investment focus and activities.

Category I:

• Category I AIFs primarily invest in start-ups, small and medium-sized enterprises (SMEs), or sectors deemed economically and socially viable by the government.

Category II:

• Category II AIFs include private equity funds or debt funds that do not receive any specific incentives or concessions from the government or any other regulator.

Category III:

• Category III AIFs encompass hedge funds or funds aimed at making short-term returns, along with open-ended funds that do not receive any specific incentives or concessions from the government or any other regulator.

About Evergreening of Loans:

Evergreening of loans refers to the practice where banks or lenders provide additional funds or take other measures to artificially sustain a loan that is not being repaid as scheduled.

The primary objective is to avoid classifying the loan as a non-performing asset (NPA) which could necessitate setting aside more provisions for potential losses.

Purpose of Evergreening:

Evergreening is a temporary measure employed by banks to maintain the appearance of a performing asset, thereby safeguarding their profitability and financial stability.

Risk Associated:

While evergreening loans may temporarily alleviate the stress on a bank’s balance sheet, it can conceal the true extent of non-performing assets and potentially lead to a more significant financial crisis if not addressed effectively.

Classic Evergreening

Instances of non-bank lenders selling stressed loans to AIFs partially set up by the lender itself, with the fresh funds being used to repay the original debt to prevent the loans from turning bad, is “classic evergreening”.

Definition of Non-Performing Asset (NPA):

NPA refers to a classification for loans or advances that are in default or are in arrears on scheduled payments of principal or interest.

Categories of Non-Performing Assets:

Sub-standard Assets:

Sub-standard assets are those classified as NPAs for a period less than or equal to 12 months.

Doubtful Assets:

Doubtful assets are those that have been non-performing for a period exceeding 12 months.

Loss Assets:

Loss assets are considered uncollectible, with little or no hope of recovery, and require complete write-off from the bank’s books.

13. When tigers and jackals get the same protection

Subject :Environment

Section: Environment laws

Context:

• An inordinate number of species have been included in the new schedules of the Wildlife Protection (Amendment) Act, 2022, without an objective or replicable process.
• Schedule 1, which confers the highest protection, contains about 600 species of vertebrates and hundreds of invertebrates, while Schedule 2 contains about 2,000 species (with 1,134 species of birds alone).

Issues for conservation:

• The WLPA was originally intended to regulate the use of various species (including hunting), restrict trade, and police the trafficking of species.
• The amended Act goes one step further by aligning itself with CITES, and including the CITES appendices. Nowhere in the Act is there a clear connection between endangerment and conservation.
• It is unclear where resources should be allocated on the basis of this list.
  • A particular consequence of listing has been the presence of the spotted deer (chital) in Schedule 1. Common throughout India, these are invasive in the Andaman Islands and have caused untold harm to the vegetation and herpetofauna. But they cannot be legally culled or removed because of the WLPA.
• The Tree Preservation Acts of Kerala and Karnataka proscribe the felling of native trees. Instead of promoting conservation, these Acts disincentivise plantation owners from planting native trees, and promote exotics such as Silver Oak, that they can cut any time they need to.
• The new Act elevates wild pigs and nilgai to Schedule 1.

Source: TH

14. Modi ‘directs’ ISRO to land man on moon by 2040, work towards interplanetary missions

Subject :Science and tech

Section: Space tech

Context:

• Indian Space Research Organisation (ISRO)’s space projects include:
  • Gaganyaan mission, India’s first manned mission to space, is scheduled for 2025.
  • To set up an Indian-crafted, indigenous space station (Bharatiya Antariksha Station) by 2035 and
  • Land an Indian on the moon by 2040.
  • Interplanetary missions, including a space vehicle to orbit Venus and one that will land on Mars.

Details:

• The Department of Space, under which the ISRO functions, presented the state of preparedness and technologies developed for Gaganyaan.
• Crew Escape System Test vehicle– a component of Gaganyaan, is scheduled for the test.
• TV-D1 test flight: Test Vehicle Abort Mission-1 (TV-D1) will be a high altitude abort test as part of the Gaganyaan program.
  • It would be a short-duration mission, and visibility from the launch view gallery of the Satish Dhawan Space Centre in Sriharikota would be limited.
• The DoS will make a road map for moon exploration, which will consist of a series of Chandrayaan missions, developing a new generation launch vehicle, constructing a new launch pad, setting up human-centric laboratories and associated technologies.
• The International Space Station, developed and maintained by the U.S., Russia, Canada, Japan, and European agencies, is the largest space station but is expected to be decommissioned by 2030.

About the Gaganyaan mission:

• Gaganyaan project envisages demonstration of human spaceflight capability by launching a crew of 3 members to an orbit of 400 km for a 3 days mission and bring them back safely to earth, by landing in Indian sea waters.
• The project is accomplished through an optimal strategy by considering inhouse expertise, experience of Indian industry, intellectual capabilities of Indian academia & research institutions along with cutting edge technologies available with international agencies. The prerequisites for Gaganyaan mission include development of many critical technologies including human rated launch vehicle for carrying crew safely to space, Life Support System to provide an earth like environment to crew in space, crew emergency escape provision and evolving crew management aspects for training, recovery and rehabilitation of crew.
• Various precursor missions are planned for demonstrating the Technology Preparedness Levels before carrying out the actual Human Space Flight mission. These demonstrator missions include Integrated Air Drop Test (IADT), Pad Abort Test (PAT) and Test Vehicle (TV) flights. Safety and reliability of all systems will be proven in unmanned missions preceding manned mission.

Major milestone planned:

Source: TH

15. Lao PDR becomes second country in 2023 after Bangladesh to eliminate lymphatic filariasis

Subject :Science and tech

Section: Health

Context:

• Lao People’s Democratic Republic has eliminated lymphatic filariasis (LF), a disease that cripples and has significant social and economic impact on the affected communities according to the World Health Organization (WHO).
• This is the country’s second neglected tropical disease (NTD) to be eliminated in six years, following the elimination of trachoma as a public health hazard in 2017.

Countries that have eliminated the LF:

• Lao PDR is now the second country after Bangladesh to eliminate lymphatic filariasis (LF) in 2023.
• Nineteen countries have been able to eliminate LF.
  • 11 belong to the WHO Western Pacific Region (WPR).Lao PDR is the 11th country in the WPR region to successfully eliminate LF.
  • Four countries viz. Bangladesh, the Maldives, Sri Lanka and Thailand in the WHO South-East Asia region have eliminated LF.
  • In the WHO Africa region, two countries — Malawi and Togo – have eliminated the disease.
  • In the WHO Eastern Mediterranean’s Yemen have eliminated the LF.

About LF:

• LF, also known as elephantiasis, is a preventable mosquito-borne infectious disease targeted for global elimination as a public health problem. It occurs when one of the filarial parasites — Wuchereriabancrofti, Brugiamalayi and B. timori — are transmitted to humans through mosquito bites.
• The parasites nest in the lymph vessels, damaging them. This leads to hydrocele, lymphedema, and elephantiasis.

Tackling LF:

• The most cost-effective method for treating all affected residents of LF-endemic areas and stopping future transmission is mass drug administration (MDA).
• WHO recommends the triple therapy combination of ivermectin (I), diethylcarbamazine (D) and albendazole (A), for MDA against LF. Multiple rounds of MDA,covering over 65 per centof the population, are required.
• 10 countries stopped MDA nationally, which means these are on the right track to eliminating LF. These include — Benin, Cameroon, Eritrea, Mali, Sao Tome and Principe, Uganda, Brazil, Dominican Republic, Timor-Leste and Brunei Darussalam.

Global efforts to eliminate LF:

• Global Programme to Eliminate Lymphatic Filariasis:
  • Launched in 2000 by the World Health Organisation (WHO).
  • Over the last 15 years, the global population requiring LF interventions has decreased by 53 per cent.
  • China participated in the program and became LF free in 2007.
• The Road Map for NTDs 2021-2030 had a target to eliminate LF from 23 countries by 2023.
• The elimination of NTDs by 2030 is one of the primary objectives of the United Nations-mandated global sustainable development goal of “health for all” (SDG 3).

Source: DownToEarth

16. New evolutionary law explains how living beings, minerals & species evolve

Subject :Science and tech

Section: Msc

Context:

• Scientists have proposed a new evolutionary law that can explain the evolution of living and non-living entities, from minerals to stars. The findings were published in the journal Proceedings of the National Academy of Sciences.
• Natural systems, living and non-living entities, evolve to states of greater patterning, diversity and complexity, the study noted.

About the new evolutionary law:

• As life evolved from single-celled to multi-celled organisms, Earth’s minerals, for example, became more complex, creating diversity. This, in turn, drove biological evolution.
• Biodiversity leads to mineral diversity and vice-versa. The two systems, biological and mineral, interacted to create life as we know it today.
• Evolution occurs when a new configuration or a new arrangement of atoms and molecules works well and functions improve.

Selection of function is key to evolution:

• Darwin defined function as primarily with survival but the new study highlights at least three kinds of functions that occur in nature.
  • The first function is stability, which means systems made up of stable arrangements of atoms or molecules will continue to survive.
  • The second one includes dynamic systems with energy supply.
  • The third is “novelty”- the tendency of evolving systems to explore new configurations or arrangements that can give rise to new behaviors or characteristics.
    • An example of novelty is when single-celled organisms evolved to use light to make food. Other examples include new behaviors among multicellular species such as swimming, walking, flying and thinking.
• Early minerals on Earth possessed a stable arrangement of atoms, which acted as foundations for the evolution of the next generations of minerals.
• These minerals were then incorporated into life. For example, minerals are present in living organisms’ shells, teeth and bones.
  • In the early years of the Solar System, Earth was home to 20 minerals, which evolved to almost 6,000 known minerals.

Star formation and evolution:

• The first ones that formed after the Big Bang had two main ingredients: Hydrogen and helium.
• Those earliest stars used these ingredients to make about 20 heavier chemical elements. The next generation of stars consequently produced almost 100 more elements.
• The universe generates novel combinations of atoms, molecules, cells, etc. Those combinations that are stable and can go on to engender even more novelty will continue to evolve.

Source: DownToEarth

17. Enthusiasm among birdwatchers as orange-headed thrush sighting recorded in Gujarat in a first

Subject :Environment

Section: Species in news

Context:

• The orange-headed thrush (Geokichlacitrinacitrina), usually spotted in the Himalayas, Eastern Ghats, and Sri Lanka, was seen in Ahmedabad early this year.

Details:

• The number of species of birds recorded in Gujarat has gone up to 117.
• This is also the first record of this species in Gujarat, taking the species count to 618.

About Orange-headed thrush (Geokichlacitrinacitrina):

• Geokichlacitrinacyanotus, a subspecies of orange-headed thrush, is a resident bird in forests of north and south Gujarat regions and there are scattered records of this subspecies in the Saurashtra region also.
• The orange-headed thrush is omnivorous, eating a wide range of insects, earthworms and fruit. It nests in trees but does not form flocks.
• Geokichla c cyanotus can be distinguished from Geokichla c. cintrina by its black vertical stripes across the eye and the ear coverts.
• They forage on the foliage on the forest floor and their range extends into south-east Asia.
• Birds of this species are known to migrate from their breeding grounds in the Himalayas to their wintering grounds in the Eastern Ghats and Sri Lanka.

Source: IE

18. Nepal and India Agree to Reduce Height of Saptakoshi Dam

Subject :Geography

Section: Places in news

Context:

• Nepal and India have agreed to reduce the height of the proposed Saptakoshi High Dam amid concerns in Nepal over the potential inundation of a large swathe of land upstream of the dam.

Details:

• A Nepal-India Joint Team of Experts was established to study the Saptakoshi High Dam Multipurpose Project and the Sunkoshi Storage and Diversion Project.
• It will reduce the hydropower generation to around 2,300MW, down from the earlier proposed 3,000MW from the multipurpose project.

Proposed hydropower projects between India- Nepal:

• Saptakoshi High Dam Multipurpose Project
• Sunkoshi Storage and Diversion Project
• A 756MW Tamor Storage Hydroelectric Project on theTamor river.
• The 635MW Dudh Koshi Hydropower Project.
• The 683MWSunkoshi 3 Hydropower Project.

Saptakoshi river:

• The Kosi or Koshi is a transboundary river which flows through China, Nepal and India. It drains the northern slopes of the Himalayas in Tibet and the southern slopes in Nepal.
• From a major confluence of tributaries north of the Chatra Gorge onwards, the Kosi River is also known as Saptakoshi for its seven upper tributaries. These include the Tamur River originating from the Kanchenjunga area in the east and Arun River and Sun Kosi from Tibet.
• The Sun Koshi’s tributaries from east to west are Dudh Koshi, LikhuKhola, Tamakoshi River, Bhote Koshi, Tamorand Indravati.
• The Saptakoshi crosses into northern Bihar, India where it branches into distributaries before joining the Ganges near Kursela in Katihar district.
• Kosi is the 3rd largest tributary of the Ganges by water discharge after Ghaghra and Yamuna.

Source: The Wire

19. Red tide

Subject :Environment

Section: Pollution

Context: Beach-goers in Puducherry were shell-shocked on Tuesday, October 17, 2023 after they witnessed the strange phenomenon of the sea turning red.

What is the news?

The entire stretch of coastal waters from Vaithikuppam on the northern side of the Promenade, up until Gandhi statue has become red, reportedly due to algal bloom

Why beach has become red?

“Industrial pollution or ‘Red Tide’ can be factors behind the sea turning red. This phenomenon has been observed in Vaithikuppam and a few other patches on the coastline over the past one week. Red Tide is a toxic algal bloom and is known to be harmful to marine life.

What is a red tide?

Harmful algal blooms, or HABs, occur when colonies of algae—plant-like organisms that live in the sea and freshwater—grow out of control while producing toxic or harmful effects on people, fish, shellfish, marine mammals, and birds. The human illnesses caused by HABs, though rare, can be debilitating or even fatal.

While many people call these blooms ‘red tides,’ scientists prefer the term harmful algal bloom. One of the best known HABs in the nation occurs nearly every summer along Florida’s Gulf Coast. This bloom, like many HABs, is caused by microscopic algae that produce toxins that kill fish and make shellfish dangerous to eat. The toxins may also make the surrounding air difficult to breathe. As the name suggests, the bloom of algae often turns the water red.

HABs are a national concern because they affect not only the health of people and marine ecosystems, but also the ‘health’ of local and regional economies.

Are all Algal blooms harmful?

But not all algal blooms are harmful?

Most blooms, in fact, are beneficial because the tiny plants are food for animals in the ocean. In fact, they are the major source of energy that fuels the ocean food web.

A small percentage of algae, however, produce powerful toxins that can kill fish, shellfish, mammals, and birds, and may directly or indirectly cause illness in people. HABs also include blooms of non-toxic species that have harmful effects on marine ecosystems. For example, when masses of algae die and decompose, the decaying process can deplete oxygen in the water, causing the water to become so low in oxygen that animals either leave the area or die.