Daily Prelims Notes 22 September 2021

September 22, 2021
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Category: DPN

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Daily Prelims Notes

22 September 2021

Table Of Contents

1. The Deposit Insurance and Credit Guarantee Corporation (DICGC)

Subject – Economy

Context – DICGC to engage chartered accountant firms to complete depositor verification

Concept –

The Deposit Insurance and Credit Guarantee Corporation (DICGC) has set in motion the process of engaging Chartered Accountant firms to complete the Herculean task of verification/ certification of claims list and books of records of 55 insured urban co-operative banks (UCBs) under the RBI’s All Inclusive Direction (AID).
This is aimed at ensuring that the first list of depositors get paid by the corporation within the stipulated time frame of 90 days from the date (September 1) when the provisions of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act 2021 came into force.
The DICGC Act was amended last month with a provision in Section 18A, allowing depositor’s access to up to ₹5 lakh within 90 days of a bank being placed under moratorium/AID.

About DICGC –

Deposit Insurance and Credit Guarantee Corporation (DICGC) is a specialised division of Reserve Bank of India which is under the jurisdiction of Ministry of Finance, Government of India.
It was established on 15 July 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities.
DICGC insures all bank deposits, such as saving, fixed, current, recurring deposit for up to the limit of Rs. 500,000 of each depositor in a bank.
It is a fully owned subsidiary of and is governed by the RBI.

Which banks are insured by the DICGC?

Commercial Banks : All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.
At present all co-operative banks are covered by the DICGC.
Primary cooperative societies are not insured by the DICGC.

What does the DICGC insure?

The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits
Deposits of foreign Governments;
Deposits of Central/State Governments;
Inter-bank deposits;
Deposits of the State Land Development Banks with the State co-operative bank;
Any amount due on account of and deposit received outside India
Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.

What is the maximum deposit amount insured by the DICGC?

Each depositor in a bank is insured upto a maximum of ₹ 5,00,000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

What is the procedure for depositors to claim the money from a failed bank?

The DICGC does not deal directly with depositors.
The RBI (or the Registrar), on directing that a bank be liquidated, appoints an official liquidator to oversee the winding up process.
Under the DICGC Act, the liquidator is supposed to hand over a list of all the insured depositors (with their dues) to the DICGC within three months of taking charge.
The DICGC is supposed to pay these dues within two months of receiving this list.

The Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021

The Bill seeks to amend the Deposit Insurance and Credit Guarantee Corporation Act, 1961. The Act established the Corporation to provide insurance for bank deposits and guarantee credit given by banks and financial institutions. The Bill seeks to provide depositors time-bound access to their insured deposit amount, in case they are restricted from accessing their bank deposits.
Under the Act, the Corporation is liable to pay the insured deposit amount to depositors of an insured bank. Such liability arises when an insured bank undergoes: (i) liquidation, i.e., sale of all assets on closing down of the bank, (ii) reconstruction or any other arrangement under a scheme, or (iii) merger or acquisition by another bank, i.e., transferee bank. Once the Corporation makes the payment to the depositors, the liquidator or the insured or transferee bank (as the case may be) becomes liable to repay the same amount to the Corporation. The amount paid by the Corporation in respect of a deposit reduces its liability against the deposit by that amount.
Interim payment to depositors: The Bill adds that the Corporation will be liable to pay the insured deposit amount to depositors on an interim basis. The liability will arise on the date the depositors are restricted from accessing their bank deposits. This liability will arise if such restrictions get imposed under any order or scheme under the Banking Regulation Act, 1949. This will also apply if such order or scheme is made before the enactment of the Bill, but the business of the insured bank remains suspended at the time of enactment.
The Corporation will not be liable to make the interim payment if: (i) the Reserve Bank of India (RBI) removes the restrictions put on the bank for payment to depositors, and (ii) the insured or transferee bank is in a position to pay the depositors without any restrictions.
Once the Corporation makes the interim payment to a depositor, the value of his deposit in the insured bank will reduce by the amount paid. The insured bank will then be liable to pay that amount to the Corporation.
Timeline for interim payment: The Bill mandates the Corporation to pay the insured amount to the depositors within 90 days of the date such liability arises. Within the first 45 days, the insured bank must furnish the details of all outstanding deposits to the Corporation. Within 30 days of the receipt of details, the Corporation will verify the authenticity of the claims and check with each depositor if they are willing to receive the insured deposit amount. Within 15 days of the verification, the Corporation must make the payment to such depositors.
The date on which the Corporation becomes liable to pay the depositors may be extended by an additional 90 days. The extension may be given if RBI finds it expedient for finalising a scheme for the reconstruction, arrangement, merger, or acquisition of the insured bank.
Premium paid by banks to the Corporation: Under the Act, insured banks are required to pay a premium to the Corporation on their deposits. The rate of premium for a bank is notified by the Corporation with the prior approval of RBI. The Act limits the rate of premium (per annum) for a bank at 0.15% of its total outstanding deposits. The Bill allows the Corporation to increase this maximum limit with the prior approval of RBI. It may increase the limit considering its financial position and the interests of the banking system of the country.
Repayment by the bank to the Corporation: Under the Act, once the Corporation makes a payment to the depositors, the insured or transferee bank, as the case may be, becomes liable to repay the same amount to the Corporation. The bank is required to repay within such time as prescribed by the Board of Directors of the Corporation. The Bill adds that the Corporation may change this time limit for such period and on such terms as prescribed by the Board through regulations. These regulations must also provide for: (i) prudential principles to assess the capability of the bank to repay the Corporation, and (ii) prohibition on the bank to discharge other specified liabilities until repayment.
The Bill provides that the Corporation may charge a penal interest for delay in repayment. The penal interest rate may be up to two percent points higher than the repo rate (the rate at which RBI lends money to banks).

2. Kharif Crops

Subject – Agriculture

Context – Kharif output seen at record 150.5 mt

Concept –

Kharif crops are grown with the onset of monsoon in different parts of the country and these are harvested in September-October.
Important crops grown during this season are paddy, maize, jowar, bajra, tur (arhar), moong, urad, cotton, jute, groundnut and soyabean

Rabi Crops –

Rabi Crops are harvested in the spring season while it is sown in winter. The rabi crops are sown around mid-November, preferably after the monsoon rains are over, and harvesting begins in April / May.
The crops are grown either with rainwater that has percolated into the ground or using irrigation. A good rain in winter spoils the rabi crops but is good for Kharif crops.

3. Fertilisers

Subject – Agriculture

Context – Ministry calls for meeting on fertilizer shortage

Concept –

Fertilizer is any material of natural or synthetic origin added to the soil to supply one or more plant nutrients.

Classification Of Fertilisers

Straight fertilizers: Straight fertilizers are those which supply only one primary plant nutrient, namely nitrogen or phosphorus or potassium.
eg. Urea, ammonium sulphate, potassium chloride and potassium sulphate.
Complex fertilizers: Complex fertilizers contain two or three primary plant nutrients of which two primary nutrients are in chemical combination. These fertilisers are usually produced in granular form.
eg. Diammonium phosphate, nitrophosphates and ammonium phosphate.
Mixed fertilizers: are physical mixtures of straight fertilisers. They contain two or three primary plant nutrients. Mixed fertilisers are made by thoroughly mixing the ingredients either mechanically or manually.

Fertilisers can also be classified based on physical form:

Solid
Liquid fertilizers

Solid fertilizers are in several forms viz.

Powder (single superphosphate),
Crystals (ammonium sulphate),
Prills (urea, diammonium phosphate, superphosphate),
Granules (Holland granules),
Supergranules (urea supergranules) and
Briquettes (urea briquettes).

Liquid fertilizers:

Liquid form fertilizers are applied with irrigation water or for direct application.
Ease of handling, less labour requirement and possibility of mixing with herbicides have made the liquid fertilisers more acceptable to farmers.

For more details on classification of fertilizers, please click here.

Organisational Set up and Functions

The main functions of the Department of Fertilizers include planning, promotion and development of the fertilizer industry, planning and monitoring of production, import and distribution of fertilizers and management of financial assistance by way of subsidy/concession for indigenous and imported fertilizers.
Secretary of the Department is the Chief Accounting Authority of the Department of Fertilizers who is assisted by a Financial Adviser and a Chief Controller of Accounts to perform his/her duties.

Fertilizer Industry in India

It is 1 of the 8 core industries. Fertilizer has the minimum share in Index of Core Industries.
India is the 2nd largest consumer of Urea fertilizers after China. India also ranks 2nd in the production of nitrogenous fertilizers and 3rd in phosphatic fertilizers. Potash requirement is met through imports since we have limited reserves of potash. There are 2 types of Fertilizers

Primary Fertilizers: classified on the basis of nutrients they supply to soil like N:P:K:
1. Nitrogenous (Urea),
2. Phosphatic (di-ammonium phosphate – DAP) and
3. Potassic (muriate of potash (MOP) fertilizers.
Secondary Fertilizers includes Calcium, Magnesium and Sulphur.
Micronutrients include Iron, Zinc, Boron, Chloride etc.

Fertilizer subsidy (Food > Fertilizer > Petroleum > Interest payments)

Earlier no Fertilizer subsidy was paid till 1977. Oil crisis of 1973led to increase in Fertilizer prices leading to a decline in consumption and an increase in food prices. In 1977, Govt subsidized manufacturers.
After 1991 crisis, Govt decontrolled the import of Phosphate and Potashbut Urea imports is restricted.

4. Religious Structures Bill

Subject – Governance

Context – Karnataka Assembly passes Religious Structures bill to protect unauthorised temples in public places

Concept –

The Karnataka Assembly on Tuesday passed the Karnataka Religious Structures (Protection) Bill, a day after introducing it.
Purpose: “protection of religious constructions on a public place constructed before the date of commencement of this Act, in order to protect communal harmony and not hurt the religious sentiments of the public.”
The bill defines “religious structure” as a “temple, church, mosque, gurudwara, Bodh vihar, Majaretc, constructed on a public place without authority of law”.
The law says that “no religious structure and construction shall be allowed by the state government or any local authority in future on a public place”.
A Supreme Court order of September 29, 2009, in a Union of India vs State of Gujarat case, said that “no unauthorized construction shall be carried out or permitted in the name of Temple, Church, Mosque or Gurudwara etc. on public streets, public parks or other public places.”

5. Kasturirangan-led panel to develop new curriculum for schools

Subject – Governance

Context – THE GOVERNMENT on Tuesday initiated the process to revise the NCERT textbooks, which are taught in CBSE-affiliated schools across the country, by setting up a committee for drafting the document that will lay down the broad guidelines for changes in the curriculum.

Concept –

The Government initiated the process to revise the NCERT textbooks, which are taught in CBSE-affiliated schools across the country, by setting up a committee for drafting the document that will lay down the broad guidelines for changes in the curriculum.
The 12-member National Steering Committee will be headed by former ISRO chief K Kasturirangan, who also headed the drafting committee of the National Education Policy (NEP) 2020. The document, known as the National Curriculum Framework (NCF), was last prepared in 2005 under the UPA government, and before that, it was revised in 1975, 1988 and 2000.
The formation of the committee comes a year after Prime Minister Narendra Modi’s announcement that school students will study under a new curriculum drawn from the NEP by 2022 when the country celebrates the 75th year of Independence.
The steering committee has been given a tenure of three years to complete its task.
The subsequent revision of textbooks by the National Council of Educational Research and Training will draw from the new NCF.
In fact, the steering committee will develop four such frameworks, one each to guide the curriculum of school education, teacher education, early childhood education and adult education.
Significantly, the NEP also states that elements such as knowledge from ancient India “will be incorporated in an accurate and scientific manner throughout the school curriculum wherever relevant” and that “Indian Knowledge Systems, including tribal knowledge and indigenous and traditional ways of learning, will be covered and included in mathematics, astronomy, philosophy, yoga, architecture, medicine, agriculture, engineering, linguistics, literature, sports, games, as well as in governance, polity, conservation”.
Traditionally, the state governments also follow the NCF in revising their respective school curriculum through the participation of the State Councils of Educational Research and Training (SCERT), which draw up the State Curriculum Frameworks (SCF).
Importantly, the newly constituted NCF has also been directed to draw inputs from the SCFs, which will have to be drawn up first, unlike in the past when the SCFs followed the NCF.

6. Appointment of HC Chief Justice

Subject – Polity

Context – Supreme Court Collegium recommends new Chief Justices for 13 HCs

Concept –

As per article 217, the chief Justice of the high court is appointed by the President in consultation with the Chief justice of India as well as the Governor of the state in question.
- In the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court is consulted.
A collegium system has evolved over the years in which a Collegium headed by the CJI makes recommendation to the government for appointment of judges.
The Collegium recommends the names to the law ministry which after scrutinizing send the paper to the president.
The president either approves the names or returns the names for reconsideration of the Supreme Court. If still the Supreme Court sends the same names president appoints the persons recommended.

Qualification to Become a High Court Judge

A person to be appointed as a judge of a high court, should be a citizen of India. Further,

He should have held a judicial office in the territory of India for ten years or
Should have been an advocate of high court(s) for ten years.

There is no minimum age fixed for high Court judges, and unlike in Supreme Court, there is no provision for appointment of a distinguished jurist as a judge of a high court.

7. India’s religious mix stable since partition

Subject – Governance

Context – India’s religious mix stable since Partition: Pew study

Concept –

The religious composition of India’s population since Partition has remained largely stable, with both Hindus and Muslims, the two largest religious groups, showing not only a marked decline but also a convergence in fertility rates, according to a new study published by the Pew Research Center, a non-profit based in Washington DC.
The study, based on data sourced from India’s decennial census and the National Family Health Survey (NHFS), looked at the three main factors that are known to cause changes in religious composition of populations — fertility rate, migration, and conversions.
With regard to fertility rates, the study found that Muslims, who had the highest rate, also had the sharpest decline in rates.
A new study on the religious composition of India’s population since Partition said due to the “declining and converging fertility patterns” of Hindus and Muslims, there have been only marginal changes in the overall religious composition of the population since 1951, the year India conducted its first Census as an independent nation.
From 1992 to 2015, the total fertility rates of Muslims declined from 4.4 to 2.6, while that of Hindus declined from 3.3 to 2.1, indicating that “the gaps in childbearing between India’s religious groups are much smaller than they used to be,”
The average fertility rate in India today was 2.2, which was higher than the rates in economically advanced countries such as the U.S. (1.6), but much lower than what it was in 1992 (3.4) or 1951 (5.9).

Marked Slowdown –

Although growth rates had declined for all of India’s major religious groups, the slowdown had been more pronounced among religious minorities, who outpaced Hindus in the earlier decades.
India’s Christian population grew at the slowest pace of the three largest groups in the most recent Census decade — gaining 15.7% between 2001 and 2011, a far lower growth rate than the one recorded in the decade following Partition (29.0%). In terms of absolute numbers, every major religion in India saw its numbers rise.
All the six major religious groups — Hindus, Muslims, Christians, Sikhs, Buddhists and Jains — have grown in absolute numbers. The sole exception to this trend are Parsis, whose number halved between 1951 and 2011, from 110,000 to 60,000.
Interestingly, out of India’s total population of 1,200 million, about 8 million did not belong to any of the six major religious groups. Within this category, mostly comprising adivasi people, the largest grouping was of the Sarnas (nearly 5 million adherents), followed by the Gond (1 million) and the Sari Dharma (5,10,000).
Sex-selective abortions had caused an estimated deficit of 20 million girls compared with what would naturally be expected between 1970 and 2017, and that “this practice is more common among Indian Hindus than among Muslims and Christians”.

On Fertility –

The study noted that women in central India tended to have more children, with Bihar and Uttar Pradesh showing a total fertility rate (TFR) of 3.4 and 2.7 respectively, in contrast to a TFR of 1.7 and 1.6 in Tamil Nadu and Kerala respectively.

OnMigration –

With regard to migration as a driver of change in the religious makeup, the study said since the 1950s, migration has had only a modest impact on India’s religious composition. More than 99% of people who live in India were also born in India, and migrants leaving India outnumber immigrants three-to-one, with “Muslims more likely than Hindus to leave India”, while “immigrants into India from Muslim-majority countries are disproportionately Hindu.
Religious conversion has also had a negligible impact on India’s overall composition, with 98% of Indian adults still identifying with the religion in which they were raised.

8. Hampi

Subject – Art and Culture

Context – Review meeting on Hampi infrastructural facilities

Concept –

To know about Hampi, please click here.

9. Thalassemia

Subject – Science and Tech

Context – HC notice to govt. on plea to restore free supply of medicine for thalassemia patients

Concept –

Thalassemia is an inherited blood disorder wherein the body produces an inadequate amount of haemoglobin. Haemoglobin is a protein molecule that carries oxygen in the red blood cells. This disorder results in the extreme destruction of red blood cells that leads to anaemia.
- Anaemia is a condition in which the haemoglobin or red blood cells are less than the normal count.
It is an inherited disease which is mainly caused due to the abnormal haemoglobin synthesis. It is transferred by one of the parents who is a carrier of this disease due to either deletion of particular key gene fragments or a genetic mutation.
Mild thalassemia requires no treatment, but acute thalassemia might require regular blood transfusions.

Sickle Cell Disease

It is an inherited disease caused by defects, called mutations, in the beta globin gene that helps make hemoglobin.
The red blood cells become hard and sticky and look like a C-shaped farm tool called a “sickle”.
The sickle cells die early, which causes a constant shortage of red blood cells.

10. Cosmos Malabaricus Project

Subject – Art and Culture

Context – Cosmos Malabaricus project gets green signal

Concept –

The State government has officially cleared the Cosmos Malabaricus project to map the history of Kerala between 1643 and 1852 using the Dutch historical archives of the 17th century.
The Department of Higher Education has issued administrative sanction for signing an agreement between the Kerala Council for Historical Research (KCHR), the National Archives of the Netherlands and Leiden University in the Netherlands for the project.
The seven-year collaboration aims to shed light on the history of Kerala using archival material pertaining to the Dutch East India Company available in India and the Netherlands.
The total project cost estimated for the KCHR is ₹4.5 crore. Leiden University will have to meet expenses, including travel, honorarium and so on, to be spent outside India

11. Asian Development Bank (ADB)

Subject – IR

Context – ADB cuts India’s 202122 growth forecast to 10%

Concept –

To know about ADB, please click here.