Daily Current Affairs for UPSC IAS | 14th November 2021

Watch the free daily Current affairs video explanation

1. How has RBI tweaked Prompt Corrective Action norms for banks? (FAQ)

UPSC Syllabus: Mains – GS Paper III – Indian Economy
Sub Theme: Prompt Corrective Actions framework | Capital Adequacy Ratio | UPSC
Context: The RBI issued a notification on November 2 revising norms for commercial banks to be placed under the regulator’s Prompt Corrective Action (PCA) framework should any of their key metrics fall out of line. The revision takes effect from January 1, 2022.

Details about PCA Framework

What?: Tool used by the RBI to monitor the financial health of the Banks and take corrective action.

Indicators used:

  • Capital to Risk weighted Asset Ratio (CRAR)
  • Net Non-Performing Assets (NPA) and
  • Return on Assets (RoA)
  • Leverage ratio

When does it get triggered: When the above 4 Indicators breach the threshold target. ( Example: If Net NPA Is greater than or equal to 6%)

What happens if a Bank is placed under PCA framework?

RBI can place certain restrictions which can include

  • Halting branch expansion
  • Stopping dividend payment
  • Cap a bank’s lending limit to one entity or sector.
  • Undertake special audit, restructuring operations and activation of recovery plan.
  • Banks’ promoters can be asked to bring in new management.
  • The RBI can also supersede the bank’s board.

Applicability: Applicable only to commercial banks and not extended to co-operative banks and NBFCs. ( Note: The RBI’s Supervisory Action Framework is similar to PCA framework and is applicable to Urban Cooperative Banks)

Banks under PCA (as on Mar 2021): Indian Overseas Bank, UCO Bank and Central Bank.

Basic Terms to understand:

Non-Performing Asset (NPA): A loan is categorized as NPA if it is due for a period of more than 90 days. Depending upon the due period, the NPAs are categorized as under:

  • Sub-Standard Assets: > 90 days and less than 1 year
  • Doubtful Assets: greater than 1 year
  • Lost Assets: loss has been identified by the bank or RBI but the amount has not been written off wholly.

Provisioning Coverage Ratio (PCR):

Under the RBI’s provisioning norms, the banks are required to set aside certain percentage of their profits in order to cover risk arising from NPAs. It is referred to as “Provisioning Coverage ratio” (PCR). It is defined in terms of percentage of loan amount and depends upon the asset quality. As the asset quality deteriorates, the PCR increases. The PCR for different categories of assets is as shown below:

  • Standard Assets (No Default): 0.40%
  • Sub-standard Assets (> 90 days and less than 1 year): 15%
  • Doubtful Assets (greater than 1 year): 25%-40%
  • Loss Assets (Identified by Bank or RBI): 100%

Gross and Net NPA: Gross NPA refers to the total NPAs of the banks. The Net NPA is calculated as Gross NPA -Provisioning Amount.

Capital Adequacy ratio (CAR): The CAR has been laid down by the BASEL committee on banking supervision under Bank of International Settlement located in Basel, Switzerland.

It has been laid down to ensure financial stability and to prevent failure of banks. So far, 3 BASEL Norms have been laid down: Basel I (1998), Basel II (2004), Basel III (2009).

CAR is the ratio of a bank’s capital to its risk. It is also known as the Capital to Risk (Weighted) Assets Ratio (CRAR)

CAR= (Tier-1 Capital + Tier-2 Capital)/ RWAs * 100.

The Banks in India are required to maintain CAR of 9% (Tier-1 capital: 7% + Tier-2 Capital: 2%) along with Capital Conservation buffer (CCB) of 2.5%.

Hence, unlike the BASEL III norms, which stipulate capital adequacy of 10.5% (8%-CAR + 2.5% CCB) , the RBI has mandated to maintain capital adequacy of 11.5% (9%-CAR + 2.5%-CCB)

Changes Made in PCA Framework – RBI

As per the revised PCA norms issued in 2017, banks were to be evaluated on capital, asset quality, profitability and leverage. The notification has removed return on assets as an indicator to qualify for PCA. Further, the 2017 notification applied to scheduled commercial banks but excluded Regional Rural Banks from its purview, while the 2021 version excludes Small Finance Banks and Payment Banks too. In the latest set of rules, the RBI has clearly spelt out that exit from the PCA would be based on four continuous quarterly results, with one being Audited Annual Financial Statement as per the new framework apart from Supervisory Comfort of RBI, assessment on sustainability of profitability.

The PCA Framework would apply to all banks operating in India including foreign banks operating through branches or subsidiaries based on breach of risk thresholds of identified indicators. A bank will generally be placed under PCA Framework based on the Audited Annual Financial Results and the ongoing Supervisory Assessment made by RBI. RBI may impose PCA on any bank during the course of a year (including migration from one threshold to another) in case the circumstances so warrant.

Mandatory and Discretionary actions
Specifications Mandatory actions Discretionary actions
Risk Threshold 1            i.          Restriction on dividend distribution/remittance of profits.

ii.          Promoters/Owners/Parent (in the case of foreign banks) to bring in capital

Common menu

i.          Special Supervisory Actions

ii.          Strategy related

iii.          Governance related

iv.          Capital related

v.          Credit risk related

vi.          Market risk related

vii.          HR related

viii.          Profitability related

ix.          Operations/Business related

x.          Any other

Risk Threshold 2 In addition to mandatory actions of Threshold 1,

  1. Restriction on branch expansion; domestic and/or overseas
Risk Threshold 3 In addition to mandatory actions of Threshold 1 & 2,

  1. Appropriate restrictions on capital expenditure, other than for technological upgradation within Board approved limits


UPSC Current Affairs:‘China strengthening connectivity in Chumbi’ | The Hindu

UPSC Syllabus: Mains – GS Paper III – Environment

Sub Theme: Chumbi Valley – Location | UPSC

Context: China is strengthening connectivity and increasing its depth in Chumbi valley, close to India’s strategic and vulnerable Siliguri corridor, also called Chicken’s Neck, according to official sources. The Siliguri corridor is a stretch of land bordering Bangladesh, Bhutan and Nepal. At the narrowest, it is about 20-22 km.

In its just-released annual report 2021 to the U.S. Congress on military and security developments involving the People’s Republic of China (PRC), the Department of Defence (DoD) noted that despite the ongoing diplomatic and military dialogues to reduce border tensions, the PRC has “continued taking incremental and tactical actions to press its claims at the Line of Actual Control [LAC]”. “China is building an alternative axis in the Chumbi valley, which is close to the Siliguri corridor. They are increasing their depth by building roads through Bhutanese territory,”


UPSC Current Affairs:Where does India stand on methane emissions? – (FAQ)| The Hindu

UPSC Syllabus: Prelims: Environment | Mains: GS-Paper III – Environment & Ecology

Sub Theme: Methane Emission – Cause of Concern| India’s Pledge on Methane Emission | UPSC


  • At the ongoing UN Climate Change Conference (the 26th Conference of Parties-COP26) in Glasgow, the United States and the European Union have jointly pledged to cut emissions of the greenhouse gas methane by 2030. They plan to cut down emissions by 30% compared with the 2020 levels.
  • At least 90 countries have signed the Global Methane Pledge, with India and China abstaining so far. Separately, 133 countries have signed a Glasgow Leaders’ Declaration on Forests and Land Use — a declaration initiated by the United Kingdom to “halt deforestation” and land degradation by 2030.
  • India has stayed out.

In this regard, we will try and understand why methane emissions are a cause for concern and why didn’t India sign the pledge.

Why is methane potent as a greenhouse gas?

  • Methane Emissions increased 9% compared to the last decade as per the recent Methane Budget released by Global Carbon Project. Global increase is mainly from anthropogenic sources between Agriculture and Waste and Fossil Fuel.
  • Methane accounts for about a fifth of global greenhouse gas (GHG) emissions and is about 25 times as potent as carbon dioxide in trapping heat in the atmosphere.

Methane is short-lived, compared with carbon dioxide, but at the same time potent, the logic is that removing it would have a significant positive impact. Methane is emitted from a variety of anthropogenic (human-influenced) and natural sources.

The human sources include landfills, oil and natural gas systems, agricultural activities as well as livestock rearing, coal mining, stationary and mobile combustion, wastewater treatment, and certain industrial processes. Sources of methane can be harnessed for energy and in principle reduce dependence on energy sources that emit high carbon dioxide but the lack of incentives and efficient energy markets to realise this is an impediment to curtailing methane emissions.

Impact of Methane in atmosphere

  • Climate Impact:
    • Methane is a very effective greenhouse gas. While its atmospheric concentration is much less than that of carbon dioxide, methane is 28 times more effective (averaged over 100 years) at trapping infrared radiation.
  • Health Impact:
    • Methane is a key precursor gas of the harmful air pollutant, tropospheric ozone.
    • When inhaled tropospheric ozone can permanently damage lung tissue. It worsens diseases like bronchitis, emphysema, and triggers asthma.
  • Crop productivity:
    • Tropospheric ozone reduces the health of plants by reducing their ability to photosynthesize and absorb carbon. This impacts crop productivity.

Methane mitigation offers rapid climate benefits and economic, health and agricultural co-benefits that are highly complementary to CO2 mitigation. Therefore, efforts to be taken to develop technologies and practices that reduce methane emissions.

India’s Methane emissions

India is the third largest emitter of methane, primarily because of the size of its rural economy and by virtue of having the largest cattle population.

In a communication to the United Nations Framework Convention on Climate Change, India said approximately 20% of its anthropogenic methane emissions come from agriculture (manure management), coal mines, municipal solid waste, and natural gas and oil systems.


Why hasn’t India signed the pledge?

  • India is taking measures:
    • it plans to deploy technology and capture methane that can be used as a source of energy.
    • To tap into this “potential,” the Ministry of New and Renewable Energy (MNRE) claims to have invested heavily in a national strategy to increase biogas production and reduce methane emissions.
    • India is also mulling changes to its forest conservation laws that seek to encourage commercial tree plantation as well as infrastructure development in forestland.
    • India’s long-term target is to have a third of its area under forest and tree cover, but it is so far 22%. It also proposes to create a carbon sink, via forests and plantations, to absorb 2.5-3 billion tonnes of carbon dioxide.
  • Wording of the pledge is misleading
    • As the pledge suggests meeting the obligations under the pledge could also mean restrictions in international trade.
    • That is unacceptable, they say, as trade falls under the ambit of the World Trade Organization, of which India is a member.


UPSC Current Affairs:Importance of Preserving Landraces | Indian Express

UPSC Syllabus: Prelims: Environment | Mains: GS Paper III – Environment

Sub Theme: Landraces | UPSC

Context: Rahibai Popere’s Padma Shri is a recognition of her work that has helped save hundreds of landraces (wild varieties of commonly grown crops) at the village level.

Among the winners of this year’s Padma awards is Rahibai Popere, popularly known as Seedmother, from Akole taluka of Ahmednagar, Maharashtra. Her Padma Shri is a recognition of her work that has helped save hundreds of landraces (wild varieties of commonly grown crops) at the village level.

About Landraces

Landraces refer to naturally occurring variants of commonly cultivated crops. These are as opposed to commercially grown crops, which are developed by selective breeding (hybrids) or through genetic engineering to express a certain trait over others. With hybrid rice and wheat, for example, selective breeding over a period of time has allowed scientists to develop varieties that have higher yield or other desirable traits. Over the years, farmers have adopted these varieties. According to programme director of Pune-headquartered BAIF Development Research Foundation crop improvement through selection and breeding over several decades has narrowed the genetic base of most crops. “Biodiversity allows a natural mechanism for crops to develop traits to face challenging situations. However, given the large-scale human interference in crop selection, that ability is now lost in most commercially crops.

Threat of Climate Change

Amid the threat of climate change, a challenge before scientists and policymakers is to develop varieties that can withstand both abiotic and biotic stresses. Naturally occurring landraces have a large pool of still untapped genetic material, which can provide solutions. “Genetic diversity is nature’s survival mechanism. The wider the gene pool, the more the chance of developing a trait that can help in surviving extreme climate events. Sanjay Patil, senior programme executive of BAIF, gave the example of kalbhat, a unique landrace of scented rice. Over the years, this variant had almost vanished from cultivators’ fields as hybrid variants became popular. It has better climate resilience than popularly grown rice and can withstand flood or drought better. A common misconception, both Patil and Joshi said, was that landraces have lower yields than hybrids. “With proper agricultural practices, landraces can give better yield with lower input costs.

Community Led Conservation

Since 2008, BAIF has initiated a community-led programme to preserve landraces. Today, landraces survive in only a few rural and tribal pockets, but they too are depleting for want of proper conservation. Traditional knowledge about the way these need to be grown, or how seeds are to be saved, is also vanishing. BAIF’s programme involves the community in saving this rich biodiversity in their own backyard.

In 2008, the project was started in Jawahar taluka of Palghar district; in 2014, it was expanded to Pune, Ahmednagar, Nandurbar, and Gadchiroli districts. At present, it is implemented in 94 villages in Maharashtra and also in Uttarakhand and Gujarat. It aims to identify germplasm available and, through community participation, create seed banks. Over the year, the programme has documented 595 accessions of different crops and developed five seed banks for edible crops. A morphological study of 259 crop cultivars and a molecular study of 112 crop cultivars have also been undertaken. The programme has deposited 150 landraces of paddy, finger millet, and little millet to the National Bureau Plant Genetic Resource, and received registration certificates for five sorghum varieties. A network of 5,000 seed savers has been developed.

Seedmother’s role

Popere has been part of the BAIF-supported Kalsubai Parisar Biyane Sanvardhan Samajik Sanstha in Akole. Working in the tribal block of Akole, this organisation has been in the forefront of the effort to save landraces of rice, little millets, hyacinth beans, finger millets and local vegetables. The Sanstha has saved 114 landraces of 40 crops. On Thursday, it was awarded the National Plant Genome Saviour Community Award. Mamatabai Bhangare, a member of the Sanstha, received the Plant Genome Saviour Farmer award.

Way Forward

Much remains to be understood about the germplasms of the landraces. Research is in the early stages. It is necessary to understand how these landraces can contribute to climate-resilient agriculture; nutritional profiling too can hold the key to fighting deficiencies, as many landraces are richer in nutrients than commercially grown variants.


UPSC Current Affairs:RBI Retail Direct Scheme and the Integrated Ombudsman Scheme | Indian Express

UPSC Syllabus: Prelims: Economy | Mains: GS Paper III – Economy

Sub Theme: Retail Direct| Integrated Ombudsman Scheme | UPSC

Context: The RBI Retail Direct Scheme is aimed towards enhancing access to the government securities (G-Secs) market for retail investors, while the Reserve Bank – Integrated Ombudsman Scheme aims to improve the grievance redress mechanism for resolving customer complaints against entities regulated by RBI.

The RBI Retail Direct Scheme

The scheme is aimed at enhancing access to government securities market for retail investors. It offers them a new avenue for directly investing in securities issued by the Government of India and the State Governments. Investors will be able to easily open and maintain their government securities account online with the RBI, free of cost.

The RBI has recently announced that the Retail Investors would be able to directly invest in the Government Securities (G-Secs). Until now, direct access to G-Secs was limited to institutional players such as Banks, Primary dealers, Insurance companies, Mutual funds, Foreign portfolio investors etc. Hence, the decision of the RBI to provide direct access to the retail investors to the G-Secs Market is a major structural reform.

What are Government Securities (G-Secs)?

A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more).

In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.

How are the G-Secs issued?

The G-Secs are issued through auctions conducted by RBI. Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI.

Scheduled Banks, Primary Dealers, Insurance companies etc. who maintain accounts with RBI, are members of this electronic platform. All members of E-Kuber can place their bids in the auction through this electronic platform.

Participation of Retail Investors in G-Secs Market

Presently, the Retail Investors do not maintain account with the RBI and hence cannot directly buy G-Secs from the RBI through the E-Kuber platform. However, the retail investors can buy the G-Secs indirectly through the aggregators/ Facilitators such as Banks, Primary dealers, Stock exchanges etc. Usually, the aggregators/facilitators charge certain commission/brokerage for buying G-Secs on behalf of retail investors.

What is the RBI’s new proposal?

The RBI would launch a new platform known as “Retail Direct” to allow retail investors to buy G-Secs directly from the RBI. To buy G-Secs, the Retail investors would be required to open their gilt accounts with the RBI. (Similar to DEMAT Account for buying shares/Bonds etc.)

Benefits for different Stakeholders

Retail Investors: Risk-free Investment; Held in DEMAT form; Can be sold easily in secondary market to meet immediate cash requirements; can be used as collateral to borrow loans etc.

Government: Government has planned to borrow around Rs 12 lakh crores from the market for the present financial year–> Make it easier for the Government to mobilise household deposits for undertaking long-term investment.

Economy: Deepen the G-Secs Market–> Higher Investment rates–> Promote Economic Growth.

The Reserve Bank – Integrated Ombudsman Scheme

RBI to make the alternate dispute redress mechanism simpler and more responsive to the customers of entities regulated by it, has integrated the three Ombudsman schemes – (i) Banking Ombudsman Scheme, 2006 (ii) Ombudsman Scheme for non-Banking Financial Companies, 2018; and (iii) Ombudsman Scheme for Digital Transaction, 2019 into the Reserve Bank – Integrated Ombudsman Scheme, 2021 (the Scheme).

The integrated scheme aims to further improve the grievance redress mechanism for resolving customer complaints against entities regulated by RBI. The central theme of the scheme is based on ‘One Nation-One Ombudsman’ with one portal, one email and one address for the customers to lodge their complaints. There will be a single point of reference for customers to file their complaints, submit the documents, track status and provide feedback. A multi-lingual toll-free number will provide all relevant information on grievance redress and assistance for filing complaints.


UPSC Current Affairs:How Srinagar earned UNESCO creative tag| Indian Express

UPSC Syllabus: Prelims: Art & Culture| Mains: GS Paper I – Art & Culture

Sub Theme: Srinagar joins UNESCO Creative Cities Network (UCCN)  | UPSC

Context: Srinagar became one of 49 cities worldwide to join the UNESCO Creative Cities Network (UCCN). With this, the UCCN is now an exclusive club of 295 cities from across 90 countries that invest in culture and creativity — crafts and folk art, design, film, gastronomy, literature, media arts, and music — to advance sustainable urban development. The Indian National Commission for Cooperation with UNESCO (which functions under Ministry of Education) has recommended to include Gwalior and Srinagar to be included within UNESCO Creative Cities Network.

The UNESCO Creative Cities Network (UCCN) was created in 2004 to promote cooperation with and among cities that have identified creativity as a strategic factor for sustainable urban development. The cities which currently make up this network work together towards a common objective: placing creativity and cultural industries at the heart of their development plans at the local level and cooperating actively at the international level. UCCN aims to fulfil the enabling and transformative power of culture and creativity in building cities that are resilient, sustainable and future-proof, thus supporting the implementation of the UN’s 2030 Agenda for Sustainable Development at the local level.

To achieve the 2030 Agenda of Sustainable Development, cities can use culture and creativity as drivers to reinforce – Creative Economy, Social Harmony, Human Development, Technological Innovation and Scientific Development approaches for the city development.

Created in 2004, the UNESCO CREATIVE CITIES NETWORK (UCCN) fosters international cooperation across cities of the world that invest in culture and creativity as accelerators of sustainable development.

Through seven creative fields:

  1. Crafts and Folk Art
  2. Design, Film
  3. Gastronomy
  4. Literature
  5. Media
  6. Arts
  7. Music

cities in the Network are innovative and strategic with a large scope of initiatives that have positive economic, social, cultural and environmental impacts.


Leave a Reply

Your email address will not be published. Required fields are marked *