Current Affairs – 2nd Week November 2024 – UPSC PSC

Prior Sanction for Prosecution of Public Servants Under PMLA

1. Background of Supreme Court Decision:

• The Supreme Court (SC) of India affirmed the Telangana High Court’s decision that mandates prior government approval before prosecuting public servants under the Prevention of Money Laundering Act (PMLA), 2002.
• This requirement for prior sanction underlines Section 197(1) of the Code of Criminal Procedure (CrPC), 1973, now replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023.

2. Section 197(1) of the CrPC (Bharatiya Nagarik Suraksha Sanhita, 2023):

• Requires prior government sanction to prosecute public servants, judges, or magistrates for actions performed as part of their official duties.
• The purpose is to prevent unwarranted prosecutions and protect officials making decisions in good faith.
• Approval must be obtained from the Central Government for Union-affiliated officials and from the respective State Government for state-level officials.
• Exceptions: Certain crimes, particularly those related to gender-based violence and sexual offenses under the Indian Penal Code, 1860, do not need prior approval to prosecute public servants.

3. Interaction Between PMLA and CrPC:

• Section 65 of PMLA: Allows CrPC provisions to apply to PMLA cases unless they conflict with the PMLA itself.
• Section 71 of PMLA: States that PMLA has overriding authority in cases of inconsistencies with other laws.
• Supreme Court Ruling: The SC rejected the Enforcement Directorate’s (ED) argument that Section 71 of the PMLA nullifies the requirement of prior sanction. Instead, it clarified that Section 197(1) is not inconsistent with PMLA, necessitating its application in PMLA cases.
• The SC further stated that invalidating Section 197(1) would make Section 65 of PMLA redundant, reinforcing the need for prior sanction.

4. Implications of SC Ruling:

• Sets a precedent for the application of CrPC in PMLA cases, especially concerning public servants.
• Restricts the ED’s power to prosecute public servants under PMLA without government consent, emphasizing due legal process.
• Balances the government’s anti-money laundering efforts with ensuring fair legal protections for public servants.

5. Relevant Case Reference:

• CBI v. Dr. R.R. Kishore Case, 2023: The SC declared that Section 6A of the Delhi Special Police Establishment (DSPE) Act, 1946, requiring government approval to arrest officers of joint secretary rank and above, is unconstitutional.
• SC ruled it void from its inception in 2003, as it conflicts with Article 13(2) of the Constitution.

6. Constitutional Protection for Civil Servants:

• Part XIV of the Constitution: Governs Union and State civil services.
• Article 309: Allows Parliament and State legislatures to regulate the recruitment and service conditions for civil servants.
• Doctrine of Pleasure (Article 310): Civil servants serve at the pleasure of the President or Governor, but this power is not without limitations.
• Article 311: Provides two main safeguards for civil servants:
  • Only the appointing authority or someone higher in rank can dismiss or remove a civil servant.
  • Any dismissal or reduction in rank requires a formal inquiry and an opportunity for the civil servant to defend themselves.

Additional Insights from Official Sources

• The Bharatiya Nagarik Suraksha Sanhita, 2023, aims to replace the CrPC with modernized provisions for criminal procedures in India.
• The government emphasizes safeguarding public servants from frivolous legal action while ensuring accountability for misuse of power under PMLA.

Multiple Choice Questions

1. What was the main requirement upheld by the SC for prosecuting public servants under the PMLA?

• a) No requirement for prior sanction
• b) Mandatory government sanction
• c) Automatic prosecution without trial
• d) No need for government consent

Answer: b) Mandatory government sanction

2. Which section of the PMLA grants it overriding authority in cases of conflict with other laws?

• a) Section 65
• b) Section 71
• c) Section 197(1)
• d) Section 311

Answer: b) Section 71

3. According to the Supreme Court, why can Section 197(1) not be nullified in PMLA cases?

• a) It would render Section 65 of PMLA ineffective
• b) Section 197(1) is not part of CrPC
• c) It is irrelevant to PMLA cases
• d) It was ruled unconstitutional

Answer: a) It would render Section 65 of PMLA ineffective

4. Under which constitutional article does the Doctrine of Pleasure apply to civil servants?

• a) Article 309
• b) Article 311
• c) Article 310
• d) Article 13

Answer: c) Article 310

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Livelihood Promotion Among Tribals: Key Points

1. Recent Issue:

• Tragic deaths in Odisha’s Kandhamal district due to mango kernel consumption, highlighting the livelihood crisis in tribal communities.
• Mango kernels contain cyanogenic glycosides (e.g., amygdalin), which can release toxic hydrogen cyanide when consumed.

2. Reasons Tribals Rely on Unsafe Food Sources:

• Severe Poverty: Many tribal communities suffer from poverty, relying on wild and foraged foods due to limited economic resources.
  • According to the Multidimensional Poverty Index (MPI), 65 million out of 129 million tribals live in multidimensional poverty.
• Food Insecurity: Geographical isolation, poor infrastructure, and logistical issues make it difficult for tribal communities to access nutritious food supplies under the National Food Security Act (NFSA), 2013.
• Malnutrition: Limited access to food staples leads to high rates of malnutrition among tribals.
  • NFHS-5 (2019-21) data shows 40.9% of tribal children are stunted, 23.2% are wasted, and 39.5% are underweight.
• Lack of Forest Rights: Displacement, deforestation, and restricted access to land have pushed many tribals into poverty, reducing their access to forest-based livelihoods.
• Economic Exploitation: Some tribals are forced to mortgage welfare benefits (e.g., ration cards) to local moneylenders, often losing access to government provisions.
• Survival Challenges: Extreme poverty, seasonal droughts, and food scarcity force tribal families to rely on unsafe food sources.
• Insufficient Institutional Support: Initiatives like the Odisha Tribal Development Project (OTDP) and projects by UNICEF and the World Food Programme (WFP) have limited reach in remote tribal areas.

3. Government Initiatives for Tribal Welfare:

• Pradhan Mantri Janjati Adivasi Nyay Maha Abhiyaan (PM-JANMAN)
• Janjatiya Gaurav Divas
• Viksit Bharat Sankalp Yatra
• PM PVTG Mission (for Particularly Vulnerable Tribal Groups)
• Dharti Aaba Janjatiya Gram Utkarsh Abhiyan
• Eklavya Model Residential Schools (EMRS) – Providing quality education for tribal children.

4. Strategies to Improve Tribal Livelihoods:

• PDS Innovations: Including more nutritious staples (e.g., pulses, oils) in the Public Distribution System (PDS) and offering door-to-door delivery for remote areas.
• Enhanced CFR Access: Improved Community Forest Rights (CFR) can empower tribes to sustainably harvest minor forest produce (MFP).
• Fair Market Prices: Ensuring fair prices for MFPs (e.g., honey, tamarind, wild mushrooms) supports economic self-reliance.
  • TRIFED plays a role in connecting tribal producers to larger markets.
• Financial Protection: Regulating microfinance to prevent exploitative lending and debt traps.
• Learning from Past Initiatives: Reviewing successes and challenges of previous programs (e.g., OTDP) to improve future strategies.
• Strategic Partnerships: Collaborations between district administrations, local governance, non-profits, and civil society groups can enhance community resilience.
• Value Addition: Processing MFPs (e.g., mango kernels for cosmetics, pharmaceuticals) can diversify income for tribal families.

5. Conclusion:

• The deaths from mango kernel consumption highlight the urgency of addressing poverty, food insecurity, and exploitation among tribals. Strengthening forest rights, enhancing market access, ensuring fair pricing, targeted initiatives, and strategic partnerships are crucial to uplifting tribal communities sustainably.

Multiple Choice Questions

1. Why do some tribal families in Odisha consume unsafe food sources like mango kernels?

• a) Lack of education
• b) Availability of wild food resources
• c) Severe poverty and food insecurity
• d) Government mandate

Answer: c) Severe poverty and food insecurity

2. Which government act provides for regular food supply to marginalized communities but faces logistical challenges in tribal areas?

• a) National Rural Employment Guarantee Act, 2005
• b) National Food Security Act, 2013
• c) Pradhan Mantri Fasal Bima Yojana
• d) Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006

Answer: b) National Food Security Act, 2013

3. What percentage of tribal children are reported to be stunted as per NFHS-5 (2019-21)?

• a) 50.1%
• b) 20.8%
• c) 40.9%
• d) 10.5%

Answer: c) 40.9%

4. What role does TRIFED play in improving tribal livelihoods?

• a) Regulating forest rights
• b) Ensuring microfinance access
• c) Marketing minor forest produce (MFP) to ensure fair prices
• d) Monitoring food distribution

Answer: c) Marketing minor forest produce (MFP) to ensure fair prices

 

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Department of Government Efficiency (DOGE): Overview

1. Concept and Creation:

• The Department of Government Efficiency (DOGE) is a newly announced advisory body by President-elect Donald Trump, led by Elon Musk and Indian-American entrepreneur Vivek Ramaswamy.
• DOGE aims to streamline U.S. government operations, minimize bureaucratic delays, reduce regulations, and cut down on unnecessary expenditures.
• The acronym “DOGE” seems to reference Dogecoin, a cryptocurrency often promoted by Musk, hinting at the department’s unconventional and tech-savvy approach.

2. Purpose and Objectives:

• Inspired by the concept of “Minimum Government, Maximum Governance,” DOGE reflects a longstanding Republican ideal of a leaner government with reduced taxes and regulations.
• The department’s stated mission is to dismantle bureaucratic inefficiencies, reform federal agencies, and cut wasteful spending.
• Trump stated that DOGE would contribute to the “Save America” movement, aiming for significant reforms in government operations.

3. Functions and Methods:

• Transparency: Musk announced that DOGE would operate transparently, posting its actions online for public scrutiny.
• Public Engagement: Both Musk and Ramaswamy indicated that the department will crowdsource ideas from the public to identify instances of waste, fraud, and abuse in government spending.
• Leaderboard for Overspending: Musk mentioned plans for a “leaderboard” to track examples of excessive spending, adding an element of public accountability and engagement.
• Crowdsourcing: Ramaswamy emphasized the department’s plan to allow Americans to report government inefficiencies, directly involving citizens in the reform process.

4. Structure and Duration:

• DOGE will not function as a traditional government department; rather, it will operate as an advisory body from outside the federal government.
• It will collaborate closely with the White House and the Office of Management & Budget, advising on structural reforms to promote efficiency.
• The department has been given a target to complete its work by July 4, 2026, aligning with the 250th anniversary of the Declaration of Independence.

5. Criticisms and Concerns:

• Conflict of Interest: Critics argue that appointing high-profile businessmen like Musk and Ramaswamy, with vested business interests, could lead to conflicts of interest.
• Experience and Scope of Governance: Some point out that neither Musk nor Ramaswamy has governance experience, raising questions about their understanding of government welfare functions beyond corporate efficiency.
• Budget Concerns: There are also concerns that establishing a separate body to reduce expenses may paradoxically incur significant costs, potentially offsetting the intended savings.

Sample MCQs on Department of Government Efficiency (DOGE)

1. What is the main purpose of the newly established Department of Government Efficiency (DOGE)?

• a) To increase government spending on welfare programs
• b) To streamline government operations, reduce regulations, and cut unnecessary expenditures
• c) To develop cryptocurrency policies for the government
• d) To create new government agencies for managing digital finance

Answer: b) To streamline government operations, reduce regulations, and cut unnecessary expenditures

2. Who are the appointed leaders of the Department of Government Efficiency (DOGE)?

• a) Elon Musk and Vivek Ramaswamy
• b) Jeff Bezos and Mark Zuckerberg
• c) Bill Gates and Warren Buffett
• d) Larry Page and Sundar Pichai

Answer: a) Elon Musk and Vivek Ramaswamy

3. What unique method will DOGE use to ensure transparency and public involvement in its mission?

• a) Confidential government reports
• b) Secret meetings with government officials
• c) Posting all actions online and crowdsourcing ideas from the public
• d) Exclusive meetings with foreign leaders

Answer: c) Posting all actions online and crowdsourcing ideas from the public

4. By when is the Department of Government Efficiency expected to complete its mission?

• a) July 4, 2026
• b) December 31, 2025
• c) January 20, 2025
• d) November 4, 2024

Answer: a) July 4, 2026

 

 

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Inter-State Council (ISC) and Federalism in India: Key Points

1. Recent Update:

• The Indian government reconstituted the Inter-State Council (ISC), with the Prime Minister as the Chairman, to reinforce Centre-State relations and cooperative federalism.

2. Overview of the Inter-State Council:

• Establishment: Constituted under Article 263 of the Constitution, which allows the President to set up a council to coordinate between States and the Union.
• Background: The Sarkaria Commission in 1988 recommended a permanent ISC. The ISC was formally established in 1990 through a Presidential Order.
• Functions: Discusses issues of common interest between the Union and States and makes recommendations for coordinated actions. It investigates issues affecting Centre-State and Inter-State relations for effective governance.
• Composition: Chaired by the Prime Minister. Members include Chief Ministers of all states, Chief Ministers of UTs with Legislative Assemblies, Administrators of UTs without Assemblies, and six Union Ministers nominated by the PM.
• Standing Committee: Created in 1996, chaired by the Home Minister, to facilitate ongoing consultations.
• Secretariat: Established in 1991 in New Delhi, the ISC Secretariat also manages Zonal Councils since 2011.

3. Benefits of the Inter-State Council:

• Legitimacy and Acceptance: Policies developed through ISC discussions carry greater legitimacy and acceptance among states, reducing tensions.
• Power Balance: Ensures a balance of power, preventing dominance by either the Union or States and aligning Union decisions with federal principles, particularly during reforms (e.g., GST, demonetization).

4. Related Inter-State and Centre-State Bodies:

• Zonal Councils: Five regional councils established under the States Reorganisation Act, 1956, promote inter-state cooperation, each led by the Union Home Minister, with rotating Vice-Chairs among state CMs.
• North Eastern Council: Created in 1972, it specifically addresses issues in the North-Eastern region.
• River Water Dispute Tribunals: Constituted under the Inter-State River Water Disputes Act, 1956, to resolve disputes over inter-state river water sharing, guided by Article 262 of the Constitution.
• GST Council: Established under Article 279A, it oversees GST policy, with members from the Union and State governments, fostering cooperative federalism.

5. Challenges Facing the Inter-State Council:

• Infrequent Meetings: Although mandated to meet three times a year, the ISC has met only 11 times since 1990, with the last meeting held in July 2016.
• Non-Binding Nature: ISC’s recommendations are advisory, limiting its effectiveness in resolving disputes and Union-State coordination.
• Political Dynamics: Differences in political ideologies between the Centre and States can affect consensus on various issues.

6. Proposed Reforms for Effective ISC Functioning:

• Amend Article 263: The Punchhi Commission (2010) suggested transforming the ISC into a specialized body for federal challenges, requiring constitutional amendments to expand its mandate.
• Regular Meetings: Enforcing regular meetings would provide continuity and a stable platform for states to express policy input.
• Clear Agenda and Priorities: Focus meetings on key issues like water disputes, infrastructure, and economic cooperation.
• Technology Integration: Utilize digital platforms for efficient communication, data sharing, and decision-making.

7. Conclusion:

• Strengthening India’s federal framework requires evolving the ISC from an advisory entity into a proactive institution. Reforms like mandate enhancement, regular meetings, and clear agendas will deepen cooperation and address Centre-State complexities effectively.

Multiple Choice Questions (MCQs)

1. Under which article of the Indian Constitution was the Inter-State Council established?

• a) Article 262
• b) Article 263
• c) Article 279A
• d) Article 280

Answer: b) Article 263

2. What was a primary recommendation of the Sarkaria Commission in 1988 regarding the Inter-State Council?

• a) Abolish the Inter-State Council
• b) Establish a permanent Inter-State Council
• c) Transfer all state powers to the central government
• d) Make ISC meetings optional for states

Answer: b) Establish a permanent Inter-State Council

3. Which of the following is NOT an Inter-State or Centre-State body related to the ISC?

• a) North Eastern Council
• b) GST Council
• c) River Water Dispute Tribunals
• d) Finance Commission

Answer: d) Finance Commission

4. What is one major challenge faced by the ISC in fulfilling its role?

• a) Lack of states’ interest in participating
• b) Lack of binding power for its recommendations
• c) Shortage of funding
• d) Limited role in interstate water disputes

Answer: b) Lack of binding power for its recommendations

 

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RBI’s Framework for Reclassification of FPI to FDI: Key Points

1. Recent Update:

• The Reserve Bank of India (RBI) has introduced a framework that enables Foreign Portfolio Investors (FPIs) to convert their investments into Foreign Direct Investment (FDI) under specific conditions.

2. Key Highlights of the Framework:

• Threshold Limit for Reclassification: FPIs investing above 10% of the total paid-up equity of an Indian company have two options:
  • Divestment: They can reduce their holdings to stay below the 10% threshold.
  • Reclassification as FDI: They can choose to reclassify their investment as FDI.
• Definition of FDI: FDI involves foreign investment through capital instruments in an unlisted Indian company or in at least 10% of the paid-up equity capital of a listed Indian company. Investments below 10% in a listed company are considered FPI.
• Timely Conversion: Reclassification must be completed within five trading days from the transaction that crosses the 10% threshold.
• Compliance with FEM (NDI) Rules, 2019: FPIs must adhere to the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, which require that investments by non-residents align with specified entry routes, sectoral caps, and investment limits.
• Sector Restrictions: Reclassification is not allowed in sectors with FDI restrictions, such as gambling, betting, real estate, and Nidhi companies.
• SEBI Alignment: This measure complements the Securities and Exchange Board of India’s (SEBI) rule that FPIs exceeding the 10% threshold can convert to FDI.

3. Background:

• The FDI policy was amended via Press Note 3 (2020) to prevent opportunistic takeovers of Indian companies during the Covid-19 pandemic.
• The amendment requires entities from countries sharing a land border with India (e.g., China, Pakistan, Bangladesh) to invest only through the government approval route.

4. Difference Between FDI and FPI:

Parameter	FDI (Foreign Direct Investment)	FPI (Foreign Portfolio Investment)
Nature of Investment	Direct ownership in business assets	Indirect investment in stocks and bonds
Investor Role	Active role in management	Passive role without involvement in operations
Control and Influence	High control over business	No control over company operations
Asset Type	Physical assets and business infrastructure	Financial assets like stocks and ETFs
Investment Approach	Long-term, strategic	Short-term, market-driven
Motive	Market access, strategic interests	Market-linked gains, short-term returns
Risk Factor	More stable, impacted by host country policies	More volatile, subject to asset price fluctuations
Entry and Exit	Challenging and time-intensive	Easy and liquid

Sample Multiple Choice Questions (MCQs)

1. According to the new RBI framework, at what equity threshold can FPIs choose to reclassify their investment as FDI?

• a) 5%
• b) 10%
• c) 15%
• d) 20%

Answer: b) 10%

2. Which regulation mandates compliance for foreign investments under the new RBI reclassification framework?

• a) FEMA, 2000
• b) FEM (NDI) Rules, 2019
• c) Companies Act, 2013
• d) RBI Act, 1934

Answer: b) FEM (NDI) Rules, 2019

3. What type of role does an FPI typically have in the management of an Indian company?

• a) Active management role
• b) Ownership control
• c) Passive, non-management role
• d) Supervisory control

Answer: c) Passive, non-management role

4. Which of the following is NOT a restricted sector for FDI under the new RBI framework?

• a) Real Estate
• b) Nidhi Companies
• c) Banking
• d) Gambling

Answer: c) Banking

 

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The third edition of Exercise AUSTRAHIND commenced in November 2024 at the Foreign Training Node in Maharashtra, India. This annual bilateral military exercise alternates between India and Australia, aiming to enhance military cooperation and interoperability in joint operations.

Key Aspects of Exercise AUSTRAHIND:

• Objective: To bolster joint planning and execution of sub-conventional operations in semi-urban and semi-desert terrains, with a focus on counterterrorism, physical fitness, tactical drills, and high-level coordination.
• Structure: The exercise is conducted in two phases:
  • Combat Conditioning and Tactical Training Phase: Emphasizes physical conditioning and tactical drills.
  • Validation Phase: Involves practical application of the training through simulated scenarios.
• Strategic Significance: Reflects the growing defense cooperation under the India-Australia Comprehensive Strategic Partnership established in 2020.

Other Joint Military Exercises Between India and Australia:

• AUSINDEX: A biennial bilateral maritime exercise aimed at enhancing naval cooperation and interoperability.
• PITCH BLACK: A multilateral air combat exercise hosted by the Royal Australian Air Force, with participation from various countries, including India.

Defense Cooperation Framework:

• Mutual Logistics Support Agreement (MLSA): Facilitates reciprocal access to military logistics support, enhancing operational capabilities during joint exercises and humanitarian missions.
• Multilateral Engagements: Both nations are active members of international forums such as the Quadrilateral Security Dialogue (Quad), Commonwealth, Indian Ocean Rim Association (IORA), ASEAN Regional Forum, and have participated in the East Asia Summits, underscoring their commitment to regional stability and security.

Multiple Choice Questions (MCQs):

1. What is the primary objective of Exercise AUSTRAHIND?
   • a) Conducting naval operations
   • b) Enhancing joint planning and execution of sub-conventional operations
   • c) Developing space exploration strategies
   • d) Facilitating economic trade agreements

   Answer: b) Enhancing joint planning and execution of sub-conventional operations

2. Which agreement facilitates reciprocal access to military logistics support between India and Australia?
   • a) Comprehensive Economic Partnership Agreement
   • b) Mutual Logistics Support Agreement
   • c) Defense Technology and Trade Initiative
   • d) Strategic Trade Authorization

   Answer: b) Mutual Logistics Support Agreement

 

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Gluten

1. Definition and Composition:

• Gluten is a protein complex found primarily in wheat, barley, and rye.
• It consists mainly of two proteins, gliadins and glutenins, which form when water is added to cereal flours.

2. Functional Role in Food:

• Gluten gives elasticity to dough, allowing it to rise and providing a chewy texture to baked goods.
• It is commonly extracted and concentrated for use in various products to enhance protein content, texture, and flavor.

3. Gluten Digestion and Health Issues:

• Gluten is resistant to complete digestion because the enzyme protease cannot efficiently break it down.
• Undigested gluten may cause gastrointestinal issues and is associated with gluten-related disorders, particularly coeliac disease.

4. Coeliac Disease:

• Coeliac disease is an autoimmune disorder triggered by gluten, where the immune system attacks the small intestine.
• Symptoms are managed by adhering to a diet very low in gluten, as this is currently the only effective treatment.

5. Role of Protease Enzymes:

• Protease, also known as peptidase, proteinase, or proteolytic enzyme, breaks down proteins into smaller peptides or amino acids but struggles with gluten, leading to incomplete digestion.

Multiple Choice Questions (MCQs)

1. What are the primary proteins that make up gluten?

• a) Caseins and albumins
• b) Gliadins and glutenins
• c) Amylopectin and amylose
• d) Collagen and keratin

Answer: b) Gliadins and glutenins

2. Which enzyme is primarily responsible for breaking down proteins but is inefficient in fully digesting gluten?

• a) Amylase
• b) Lipase
• c) Protease
• d) Lactase

Answer: c) Protease

 

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QS World University Rankings: Asia 2025

1. Overview of India’s Performance:

• Top Performers: India has two institutions in the top 50:
  • IIT Delhi at 44th and IIT Bombay at 48th, highlighting their prominence in Asia.
• Top 100 Institutions: Five additional Indian institutions in the top 100:
  • IIT Madras (56th), IIT Kharagpur (60th), Indian Institute of Science (62nd), IIT Kanpur (67th), and University of Delhi (81st).
• Other Notable Institutions: IIT Guwahati, IIT Roorkee, Jawaharlal Nehru University, Chandigarh University, and Vellore Institute of Technology also made notable positions, with many ranked in the top 150 globally.

2. Factors Behind India’s Rising Rankings:

• High Research Productivity: Institutions like Anna University excel in research metrics, such as “Papers Per Faculty.”
• Academic Excellence: Many Indian universities feature high numbers of PhD-qualified faculty, contributing to better academic standards.
• International Collaboration: Universities are increasing global research networks, such as the University of Delhi’s partnerships, improving their global presence and recognition.

3. Implications for India’s Education Sector:

• Global Recognition: Improved rankings enhance India’s reputation, attracting international students and faculty and positioning India as a leading destination for higher education.
• Increased FDI: High educational standards and global recognition can attract more Foreign Direct Investment (FDI) in education, benefiting the economy and creating jobs.
• Enhanced Academic Standards: Pursuit of better rankings motivates improvements in academic quality, curriculum development, and teaching methodologies, supported by educational reforms like the National Education Policy (NEP) 2020.

4. About Quacquarelli Symonds (QS):

• Global Analyst: QS is a London-based higher education analyst known for the widely recognized QS World University Rankings.
• Ranking Indicators: QS evaluates universities on six indicators within four broad areas:
  • Research Reputation: Quality and impact of research.
  • Learning and Teaching Environment: Educational quality and resources.
  • Research Impact: Influence and citation of research work.
  • Internationalization: Global engagement and partnerships.

Multiple Choice Questions (MCQs)

1. Which Indian institutions are in the top 50 of the QS Asia University Rankings 2025?

• a) IIT Bombay and IIT Madras
• b) IIT Delhi and IIT Kanpur
• c) IIT Delhi and IIT Bombay
• d) Indian Institute of Science and University of Delhi

Answer: c) IIT Delhi and IIT Bombay

2. Which of the following is NOT a factor behind India’s rise in the QS Asia Rankings?

• a) High research productivity
• b) Large-scale FDI in the education sector
• c) Growing global research networks
• d) Increased number of PhD-qualified faculty

Answer: b) Large-scale FDI in the education sector

 

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Domestic Systemically Important Banks (D-SIBs)

1. Overview:

• The Reserve Bank of India (RBI) has retained State Bank of India (SBI), HDFC Bank, and ICICI Bank as Domestic Systemically Important Banks (D-SIBs) for 2024.
• These banks are categorized as “Too Big To Fail (TBTF),” reflecting their critical role in the economy and banking system.

2. Why Are D-SIBs Important?

• Their size, complex operations, cross-jurisdictional activities, and interconnectedness make them systemically significant.
• The failure of a D-SIB could severely disrupt essential banking services and economic activities.
• These banks benefit from an expectation of government support during crises, which can lead to moral hazards like risk-taking and reduced market discipline.

3. Bucketing Structure:

• Banks are placed into different buckets based on their systemic importance score:
  • SBI: Bucket 4
  • HDFC Bank: Bucket 3
  • ICICI Bank: Bucket 1

4. Capital Requirements:

• D-SIBs must maintain additional Common Equity Tier 1 (CET1) capital, depending on their bucket:
  • SBI: 0.80% of Risk Weighted Assets (RWAs) (increased from 0.60% starting April 1, 2025).
  • HDFC Bank: 0.40% (increased from 0.20% starting April 1, 2025).
  • ICICI Bank: 0.20%.
• Foreign banks classified as Global Systemically Important Banks (G-SIBs) must maintain additional CET1 capital surcharge in India proportional to their global RWAs.

5. Process for Selecting D-SIBs:

• The RBI follows a two-step process:
  1. Select a sample of banks for assessment, focusing on those whose size exceeds 2% of GDP.
  2. Compute systemic importance scores using indicators like size, substitutability, and interconnectedness.
• Banks above a specific threshold are classified as D-SIBs and placed into graded buckets.

6. Global Systemically Important Banks (G-SIBs):

• The Financial Stability Board (FSB) identifies G-SIBs annually based on Basel Committee guidelines.
• Examples of G-SIBs (2023 list): JP Morgan Chase, Bank of America, Citigroup, HSBC, Agricultural Bank of China, Barclays, and BNP Paribas.

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Multiple Choice Questions (MCQs)

1. Which of the following banks is NOT classified as a Domestic Systemically Important Bank (D-SIB) in India?

• a) State Bank of India
• b) HDFC Bank
• c) Axis Bank
• d) ICICI Bank

Answer: c) Axis Bank

2. What is the additional CET1 capital requirement for SBI as per the updated framework from April 1, 2025?

• a) 0.20%
• b) 0.40%
• c) 0.60%
• d) 0.80%

Answer: d)

 

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