Daily Prelims Notes 17 July 2021
- July 17, 2021
- Posted by: admin1
- Category: DPN
Daily Prelims Notes
17 July 2021
Table Of Contents
- Foreign card payment network
- Financial health of bank
- Session of Parliament
- The Amrabad Tiger Reserve
- Bank of Maharashtra (BoM) memorandum of understanding (MoU)
- 7. Bail orders will be sent instantly to jail authorities: SC
- China starts long-awaited carbon trading scheme
- Reservation for Economically Weaker Sections (EWS)
- Adjournment motion in the Lok Sabha to seek repealing of three farm laws
- Supreme Court’s remarks on sedition cases bode well for its inevitable invalidation
Context: Reserve Bank of India has so far barred three foreign card payment network companies — MasterCard, American Express and Diners Club — from taking new customers on board over the issue of storing data in India.
According to RBI data, there were 90.23 crore debit cards and 6.23 crore credit cards in India as of May 2021. There were 57,841.30 lakh debit and credit card transactions valued at Rs 12.93 lakh crore
- The RBI imposed restrictions on citing non-compliance with guidelines for storage of data in India. It had given three years for MasterCard to comply with the regulatory directions.
- Existing customers using a credit card or a debit card with the payment network can continue using
RBI guidelines stipulate
- By the RBI circular on Storage of Payment System Data, all system providers were directed to ensure that within six months the entire data (full end-to-end transaction details, information collected or carried or processed as part of the message or payment instruction) relating to payment systems operated by them is stored in a system only in India.
- They were also required to report compliance to the RBI and submit a board-approved system audit report conducted by a CERT-In empanelled auditor within the timelines specified
- Credit and card firms with global operations have been resisting the move, citing costs, security risk, lack of clarity, timeline, and the possibility of data localisation demand from other countries.
- Payment firms like Visa and MasterCard, which currently store and process Indian transactions outside the country,
- the data storage to India will cost them millions of dollars
- The RBI is against the suggestion that a copy of data stored outside be brought to India.
Role of card networks
- Firms such as MasterCard, Visa and National Payment Corporation of India (NPCI) are Payment System Operators authorised to operate a card network in India under the Payment and Settlement Systems (PSS) Act, 2007.
- Under the Act, the RBI is the authority for the regulation and supervision of payment systems in India.
- The RBI’s payment system enables payments to be effected between a payer and a beneficiary and involves the process of clearing, payment or settlement, or all of them.
- Funds transferred using debit or credit cards are routed through platforms such as Mastercard, Visa and NPCI.
- The RBI has decided to allow non-bank entities — Prepaid Payment Instrument (PPI) issuers, card networks, White Label ATM (WLA) operators,
- Trade Receivables Discounting System (TReDS) platforms will become members of the centralised payment system (CPS) and effect fund transfer through RTGS and NEFT.
Context: The Yes Bank episode was the latest in the series. The bank’s fall is yet another reminder for customers to know better, such as not putting all their life’s savings in a single spot and keeping an eye out on the activities and performance of the institution unto which they entrust their hard-earned money.
- Gross non-performing assets (NPAs): They indicate how much of a bank’s loans are in danger of not being repaid. If interest is not received for 3 months, a loan turns into NPA. A very high gross NPA ratio means the bank’s asset quality is in very poor shape
- Net NPAs. The net NPA is that portion of bad loans which has not been provided for in the books.Net NPA is a better indicator of the health of the bank.
- Capital adequacy ratio: It is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities. This is a measure of a bank’s ability to meet its obligations. A high CAR means the bank can absorb losses without diluting capital.
- CASA ratio, It is the proportion of current account and savings account deposits in the total deposits of the bank.A low CASA ratio means the bank relies heavily on costlier wholesale funding, which can hurt its margins
- Credit-deposit ratio, This shows how much a bank lends out of its deposits or how much of its core funds are used for lending.A high credit-deposit ratio suggests an overstretched balance sheet, and may also hint at capital adequacy issues.
- Net interest margin,This is the difference between interest earned by a bank on loans and the interest it pays on deposits.NIM will be high for banks with higher low-cost deposits or high lending rates. Low NIM and high NPA is a bad combination.
- Return on assets, it shows how profitable a bank’s assets are in generating revenue.A lower RoA means that bank is not able to utilise assets efficiently. Negative RoA implies the bank’s assets are yielding negative return.
- Provisioning coverage ratio. Banks usually set aside a portion of their profits as a provision against bad loans. A high PCR ratio (ideally above 70%) means most asset quality issues have been taken care of and the bank is not vulnerable.
- A Provisioning Coverage Ratio or PCR is the percentage of funds that a bank sets aside for losses due to bad debts. A high PCR can be beneficial to banks to buffer themselves against losses if the NPAs start increasing faster. Provision Coverage Ratio = Total provisions / Gross NPAs
Context: The three meetings of all parties convened by Vice-President Venkaiah Naidu, Speaker Om Birla and Parliamentary Affairs Minister Pralhad Joshi over the weekend, will set the tone of the Monsoon Session of Parliament beginning on Monday.
The president from time to time summons each House of Parliament to meet. But, the maximum gap between two sessions of Parliament cannot be more than six months. In other words, the Parliament should meet at least twice a year. There are usually three sessions in a year, viz,
- the Budget Session (February to May);
- the Monsoon Session (July to September); and
- The Winter Session (November to December).
- The President shall form time to time summon each House of Parliament to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session
- The President may from time to time
- prorogue the Houses or either House;
- dissolve the House of the People
Context: The Department of Public Enterprises (DPE) has written to Central Ministries and departments to get their Central Public Sector Enterprises (CPSE) registered in Government e-Marketplace (GeM).
The GeM would be the national public procurement portal and will be registered as Section 8 Company for providing procurement of goods and services required by central and state government organizations. It will provide an end-to-end online marketplace for central and state government ministries and departments for procurement of common use goods & services in a transparent and efficient manner.
- It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users achieve the best value for their money.
- All the administrative Ministries/ Departments have instructed their CPSEs having any product or service which may be purchased by any Government department, to register themselves and their authorised resellers on GeM portal as sellers for such products/services,
- many of the CPSEs are still not registered on GeM as sellers.
- Procurement As per General Financial Rules (GFRs), 2017, it is manor sold by Government/PSUs besides reforming DGS&D (Directorate General of Supplies and Goods).
- the finance minister in his Budget speech of FY2016-17, announced setting up of a technology driven platform to facilitate procurement of goods and services by various ministries and goverment agencies.
- Absence of CPSEs on GeM as sellers reduces competition and deprives the Government buyers the opportunities to get competitive prices. Simultaneously, CPSEs may also be losing business opportunities arising from Government buyers.
Context: The Amrabad Tiger Reserve is now home to largest population of tigers in Telangana, according to Annual Census Report
- The Amrabad Tiger Reserve is now home to largest population of tigers in Telangana, according to Annual Census Report,
- The estimation of prey population density of spotted deer, Sambar, Nilgai, wild pigs, four-horned antelope and Chinkara, is done by Line Transect Estimation.. Spotted deer along with wild pig occupied the first place, followed by Sambar, Nilagai and Common Langur.
- Amrabad Tiger Reserve lies in Nallamala hills of Telangana.
- It is India’s second-largest tiger reserve,next only to Nagarjunasagar Srisailam Tiger Reserve (Andhra Pradesh and Telangana).
- It has a large presence of the Chenchu
- The waterhole census method is considered more a direct census survey,
there is no estimation in this method.
- We count the number of animals and their type that visit each waterhole.
- Each animal needs to consume water at least once in a 24-hour period.
- Hence, all the wildlife in the area will be covered through this activity.
- It will help determine the concentration of wildlife species in the particular area
Context: Bank of Maharashtra (BoM) has signed a memorandum of understanding (MoU) with National Bank for Agriculture & Rural Development (Nabard) to boost ongoing developmental initiatives linked to priority sector lending in Maharashtra
The MoU envisages joint initiatives,
- the benefits of farmers, farmer producer organisations, joint liability groups, self-help groups, rural artisans, weavers, agri-preneurs, agri start-ups, micro, small and medium enterprises in the State,
- BoM and Nabard will work together towards overall development of rural areas in Maharashtra.
- BoM is the convener of State Level Bankers’ Committee (SLBC) for Maharashtra. Each State/Union Territory has a Bankers’ Committee, which is an apex inter-institutional forum to create adequate coordination machinery in a State for its development. SLBC members SLBC is chaired by the chairman/managing director/executive director of the convenor bank.
- It comprises representatives of Banks, RBI, Nabard, heads of government departments, among others.
- They come together and sort out coordination problems at the policy implementation level. Representatives of various organisations from different sectors of the economy such as industry bodies, retail traders, exporters, and farmers’ unions, are special invitees in the SLBC meetings
Context: The Chief Justice of India has announced FASTER scheme to cut delays in release from jail.
- In the backdrop of the COVID-19 pandemic, the Supreme Court has made concerted moves to de-congest prisons.
- The court turned a humanitarian eye to the over four lakh prison population trapped inside overcrowded jails as a surging second wave led to huge loss of lives.
- Earlier, a Bench led by Chief Justice Ramana had ordered the police to limit arrests during the pandemic to prevent over-crowding in jails.
- The bench also urged courts to not order detention in a mechanical manner in cases involving the punishment of less or up to seven years’ imprisonment.
- It had ordered High-Powered Committees constituted in most States and Union Territories to screen prisoners and release them on interim bail.
- The new scheme is called ‘FASTER’ or ‘Fast and Secure Transmission of Electronic Records’.
- Through this, by which the Supreme Court would instantly, directly, securely and electronically transmit bail and other orders to jail authorities, district courts and High Courts.
Subject : Environment / IR
Context : China has introduced the emissions trading system.
- The much-awaited scheme would act as a key tool in its quest to drive down climate change-causing greenhouse gases and go carbon neutral by 2060.
- China has hailed it as the foundations for what would become the world’s biggest carbon trading market, forcing thousands of Chinese companies to cut their pollution or face deep economic hits.
- The scheme will set pollution caps for big-power businesses for the first time, and allows firms to buy the right to pollute from others with a lower carbon footprint.
- China is the world’s biggest carbon emitter and seeking to take a global leadership role on the climate crisis.
- China’s coal, cement and steel production have all gone up as the government pours in billions of dollars to energy-intensive sectors to boost growth after the pandemic.
- However, analysts say it is not a quick climate fix and could take years before China changes course.
Subject : Governance
Context : Recently, the Andhra Pradesh government has issued orders for implementation of 10 per cent EWS reservation in all government recruitments henceforth.
- The order is in accordance with The Constitution (103rd) Amendment Act 2019 that provides for the creation of the special EWS quota to be implemented by the state.
- The state government has simplified the norms stipulated by the Central Government for the implementation of 10 percent reservation to the EWS in employment and education, without any sub-categorisation.
- The people who are not covered under the existing reservations for BCs, SCs, STs and whose gross annual family income is below Rs 8 lakh per annum, are eligible for EWS reservation in both employment and educational opportunities.
Implementation of EWS Reservation
- The government has asked all tehsildars to issue OBC certificates to persons eligible under EWS.
- The persons recruited under EWS category will be adjusted against the roster points earmarked for them.
- The orders on the roster points earmarked for 10 per cent reservation to EWS category will be issued separately, along with other rules to be framed/amended and guidelines to be formulated.
- The persons whose family own or possess either five or more acres of agricultural land, or, residential flat of 1000 sq feet or above, or residential plot of 100 sq yards and above are excluded.
Subject : Polity
Context : Recently, the Shiromani Akali Dal general secretary has said that as their party would be moving adjournment motion in the Lok Sabha to seek repealing of three farm laws.
- It is introduced in the Lok Sabha to draw attention of the House to a definite matter of urgent public importance.
- It needs the support of 50 members to be admitted in the Parliament.
- It is regarded as an extraordinary device because it interrupts the normal business of the House.
- It involves an element of censure against the government and hence Rajya Sabha is not permitted to make use of this device.
- The right to move a motion for an adjournment of the business of the House is subject to the following restrictions:
- It should raise a matter which is definite, factual, urgent and of public importance;
- It should not cover more than one matter;
- It should be restricted to a specific matter of recent occurrence and should not be framed in general terms;
- It should not raise a question of privilege;
- It should not revive discussion on a matter that has been discussed in the same session;
- It should not deal with any matter that is under adjudication by court; and
- It should not raise any question that can be raised on a distinct motion.
What are Motions?
- The House expresses its decisions or opinions on various issues through the adoption or rejection of motions moved by either ministers or private members.
- The motions moved by the members to raise discussions on various matters fall into three principal categories:
- Substantive Motion: It is a self-contained independent proposal dealing with a very important matter like impeachment of the President or removal of Chief Election Commissioner.
- Substitute Motion: It is a motion that is moved in substitution of an original motion and proposes an alternative to it.
- Subsidiary Motion: It is a motion that, by itself, has no meaning and cannot state the decision of the House without reference to the original motion or proceedings of the House.
Types of Motions
- Closure Motion: It is a motion moved by a member to cut short the debate on a matter before the House.
- Privilege Motion: It is concerned with the breach of parliamentary privileges by a minister.
- It is moved by a member when he feels that a minister has committed a breach of privilege of the House.
- Calling Attention Motion: It is introduced in the Parliament by a member to call the attention of a minister to a matter of urgent public importance, and to seek an authoritative statement from him on that matter.
- No-Confidence Motion: Article 75 of the Constitution says that the council of ministers shall be collectively responsible to the Lok Sabha.
- The Lok Sabha can remove the ministry from office by passing a no-confidence motion.
Context: Recently, the Supreme Court has expressed concern over the “misuse” of the sedition law and no accountability of executive agencies and it sought to know that if this “colonial law” is still needed 75 years after Independence.
- The law was originally drafted in 1837 by Thomas Macaulay, the British historian-politician, but was inexplicably omitted when the IPC was enacted in 1860.
- Section 124A was inserted in 1870 by an amendment introduced by Sir James Stephen when it felt the need for a specific section to deal with the offence.
- It was one of the many draconian laws enacted to stifle any voices of dissent at that time.
- The term ‘sedition’ has been defined under Section 124A of the Indian Penal Code.
- It is defined as an offence committed when “any person by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the government established by law in India”.
- Disaffection includes disloyalty and all feelings of enmity.
- The comments without exciting or attempting to excite hatred, contempt or disaffection, will not constitute an offence under this section.
Sedition Law against Freedom Fighters
- The first known instance of the application of the law was the trial of newspaper editor Jogendra Chandra Bose in 1891.
- Bal Gangadhar Tilak was charged with sedition in 1897 for writing an article in his weekly publication called Kesari and was sentenced to 12 months imprisonment.
- He was tried again in 1908 and was represented by MA Jinnah but his application for bail was rejected and he was sentenced to six years.
- In 1922, Mahatma Gandhi was arrested on charges of sedition in Bombay for taking part in protests against the colonial government.