From UPSC perspective, the following things are important :
Mains level: Significance of NBFC sector;
Why in the News?
During the transition to the Scale-Based Regulation (SBR) framework, the NBFC sector experienced double-digit credit growth, maintained adequate capital levels, and saw a reduction in delinquency ratios.
What is Scale-Based Regulation (SBR)?
The SBR framework was first outlined in October 2021 and became effective on October 1, 2022.
It aims to categorize NBFCs based on their size, activities, and perceived riskiness rather than merely distinguishing between systemically important and non-systemically important entities.
What are the key points presented by RBI on the resilience of the NBFC sector?
Improvement in Asset Quality: Since the introduction of the Scale-Based Regulation (SBR) framework in October 2022, the asset quality of NBFCs has improved, with lower gross non-performing asset (GNPA) ratios.
By December 2023, GNPA ratios had decreased to 2.4% for government-owned NBFCs and 6.3% for non-government NBFCs, reflecting enhanced risk management.
Double-Digit Credit Growth: The NBFC sector maintained strong credit growth throughout 2023, driven by a diversified funding base, including retail credit (gold loans, vehicle loans, and housing loans) and expanding into industrial and service sectors.
Improved Profitability: The sector witnessed a rise in profitability, as evidenced by better returns on assets (RoA) and equity (RoE).
Net NPA (NNPA) Performance: Upper layer NBFCs had lower GNPA ratios than middle layer NBFCs, but the latter maintained sufficient provisions for riskier portfolios, ensuring that their NNPA ratios were also controlled.
Compliance with SBR: Major NBFCs in the “Upper Layer” identified by the RBI under the SBR framework, such as LIC Housing Finance, Bajaj Finance, and L&T Finance, have complied or initiated steps to comply with listing requirements.
Regulatory measures taken up by the NBFC sector
Scale-Based Regulation (SBR) Framework: Introduced in October 2022, the SBR framework categorizes NBFCs into different layers based on their size, systemic importance, and risk profile. For instance, strengthen asset quality, capital requirements, and risk management.
Prompt Corrective Action (PCA) Norms: Effective from October 2024, PCA norms will apply to government-owned NBFCs. These measures aim to enhance financial discipline, focusing on capital adequacy and asset quality.
Diversification of Funding Sources: Due to rising risk weights on bank lending, NBFCs have diversified their funding base by reducing dependence on bank borrowings and expanding into secured retail credit.
Listing Compliance: Many NBFCs in the upper layer have complied or are in the process of complying with listing requirements as part of regulatory mandates.
What are the emerging risks that NBFCs need to cater? (Way forward)
Cybersecurity Risks: With the increasing use of digital platforms, NBFCs need to enhance cybersecurity measures to safeguard against evolving cyber threats.
Climate Risk: The financial impact of climate change poses a new risk. NBFCs must integrate climate-related risks into their risk management frameworks to mitigate potential disruptions.
Financial Assurance Functions: The RBI emphasizes that assurance functions like risk management, compliance, and internal audit are critical in maintaining resilience in the face of rapid changes in the financial landscape.
Evolving Regulatory Environment: As the financial sector continues to evolve, NBFCs must stay ahead of regulatory changes and ensure that their risk management practices are aligned with emerging threats and new regulations.
From UPSC perspective, the following things are important :
Prelims level: Poona Pact;
Mains level: Gandhi vs Ambedkar on Caste;
Why in the News?
On September 20, 1932, Mahatma Gandhi began a fast unto death in Yerawada Jail, Pune, to protest against the provision of separate electorates for Scheduled Castes.
Gandhi vs Ambedkar on Caste
Gandhi’s Views on Caste: Initially orthodox, Gandhi supported social prohibitions like restrictions on inter-dining and inter-marriage but later rejected untouchability, referring to untouchables as “Harijans.” However, he did not reject the institution of caste itself, as it was tied to Hindu religious practices.
Ambedkar’s Radical Approach: Ambedkar believed that to truly abolish caste, one needed to attack the divine authority of the Hindu scriptures (shastras) that justified it. He argued that reforms short of rejecting the religious basis of caste were insufficient.
Ambedkar’s strategy was to focus on lower castes achieving political power to challenge their subjugation within the Hindu social order.
Ambedkar’s Argument for Separate Electorates
Distinct Identity of Depressed Classes: Ambedkar argued that the Depressed Classes (Scheduled Castes) formed a distinct group, separate from the Hindus. Despite being part of Hindu society, they did not enjoy equal treatment and were subject to systemic oppression.
Political Machinery for Representation: Ambedkar advocated for separate electorates with a double vote system, where Scheduled Castes would vote for their own candidates as well as in the general electorate.
Protection from Majority Rule: Ambedkar warned that joint electorates would allow the Hindu majority to control the election of Dalit representatives, making it impossible for lower castes to effectively protect their interests against the tyranny of the majority.
Why Gandhi Opposed Separate Electorates
Integration of Lower Castes: Gandhi opposed separate electorates because he believed they would marginalize lower castes further.
Instead of being restricted to a limited share of seats, Gandhi thought lower castes should aim for broader participation in political leadership.
Fear of Dividing Hindu Society: Gandhi feared that separate electorates would divide Hindu society, further weakening it.
He believed this division would help the British continue their “divide and rule” policy, undermining India’s struggle for independence.
Strategic Concerns: The introduction of separate electorates for Scheduled Castes, in addition to those for Muslims, would fragment the Hindu political base, reducing the power and influence of upper-caste Hindu leadership.
Culmination of the Debate: The Poona Pact
Gandhi’s Fast: In 1932, Gandhi went on a fast unto death to oppose separate electorates, pressuring Ambedkar to concede. Ambedkar, despite his misgivings, agreed to the Poona Pact, which provided for reserved seats for Scheduled Castes but within a joint electorate.
Ambedkar’s Dissatisfaction: Ambedkar was never fully satisfied with the outcome, believing the joint electorate allowed upper-caste Hindus to nominate Dalit representatives, effectively controlling their political voice.
Conclusion: The Gandhi-Ambedkar debate on caste culminated in the Poona Pact, with Gandhi opposing separate electorates to maintain Hindu unity, while Ambedkar sought political power for lower castes. Though Ambedkar agreed, he remained dissatisfied with the compromise.
Mains PYQ:
Q Mahatma Gandhi and Dr. B R Ambedkar, despite having divergent approaches and strategies, had a common goal of amelioration of the downtrodden. Elucidate. (UPSC IAS/2015)
From UPSC perspective, the following things are important :
Mains level: Effectiveness of POCSO Act;
Why in the News?
In a recent ruling, the Supreme Court has tightened child pornography laws, declaring that viewing, possessing, or failing to report such content is punishable under the Protection of Children from Sexual Offences (POCSO) Act, regardless of whether the material is shared or transmitted.
What is the law in question?
The Supreme Court expanded the interpretation of Section 15 of the POCSO Act, which deals with “Punishment for storage of pornographic material involving child”.
In 2019, the POCSO Act was amended to introduce three connected offences under Sections 15(1), (2) and (3) with increasing grades of punishment:
Any person, who stores or possesses pornographic material involving a child, but fails to delete, destroy or report the same to the designated authority with an intention to share or transmit child pornography.
Any person, who stores or possesses such material for transmitting, propagating, displaying or distributing in any manner at any time except for reporting or use as evidence in court.
Any person, who stores or possesses such material for commercial purpose.
The court refers to these as “inchoate” offences – offences in anticipation or preparation for committing a further criminal act.
About the Case and SC’s Verdict
Case Background: The Supreme Court was dealing with a case where the Madras High Court had quashed criminal proceedings against a man who had downloaded child pornography but did not share it.
The High Court had limited its ruling to Section 14 of POCSO (using children for pornography) and excluded Section 15 (punishing possession) since no evidence of sharing existed.
Supreme Court’s Verdict:
The SC overturned the Madras High Court’s ruling, expanding the definition of “possession” of child pornography to include “constructive possession”, even without physical storage of the material.
Viewing, controlling, or exercising knowledge over such material (e.g., watching without downloading) was deemed sufficient for possession.
The SC stressed that even failing to delete or report such content implies intent to share and is punishable under Section 15(1).
Even if the accused does not have the material at the time of filing the FIR, they can still be held accountable if they had possessed it “at any point”.
How will such cases be registered?
Determination of Intention: The court held that the intention (mens rea) of the accused will be determined based on the circumstances, such as how the material was stored or possessed and why it was not reported or destroyed.
Actions like storing, not deleting, or failing to report child pornography can be used as evidence of intent to share or distribute.
Role of Police: The police must not limit their investigation to only one sub-section of Section 15. Even if a specific offence isn’t made out, the police should explore the possibility of other violations under different sub-sections.
Reporting Obligation: The court emphasized the mandatory reporting of child pornography, with penalties for failing to report starting from a fine of Rs. 5,000 and increasing for repeat offences.Failure to report, even after merely viewing child pornographic material, can result in legal consequences.
Conclusion: The Supreme Court’s ruling on the POCSO Act broadened the definition of possession, emphasizing that failure to delete or report child pornography constitutes intent to share, with strict penalties for non-compliance, underscoring the obligation to report such content.
From UPSC perspective, the following things are important :
Prelims level: Starlink Project
Why in the News?
Starlink satellites, operated by Elon Musk’s SpaceX, are causing issues for astronomers by disrupting both optical and radio astronomy due to unintended electromagnetic radiation (UEMR).
What is a Starlink Satellite?
Starlink satellites are part of a network created by Elon Musk’s SpaceX to provide high-speed internet to remote areas around the world.
The network, known as a satellite constellation, currently includes more than 6,300 satellites orbiting Earth at around 550 km altitude.
These satellites aim to offer internet connectivity to places that would otherwise lack access, especially in rural or underserved regions.
Why Radio Astronomy matters?
Radio astronomy is a branch of astronomy that studiescelestial objectsusingradio frequenciesinstead of visible light.
Radio telescopes detect radio waves, which are longer than light waves, emitted by objects in space such as stars, galaxies, and even black holes.
Radio astronomy is important because it helps scientists study the universe beyond what can be seen with optical telescopes.
Radio noise from sources like satellites can interfere with these observations, making it difficult for astronomers to collect data, similar to how bright lights can obscure faint stars.
What Starlink does to Space Communications?
Starlink satellites are designed to improve global internet access, especially in hard-to-reach places, by transmitting signals from space.
However, these satellites also emit unintended electromagnetic radiation (UEMR), which causes radio noise that disrupts radio astronomy observations.
The situation may worsen as more satellites are launched — some estimates suggest 100,000 satellites could be orbiting Earth by 2030.
There are currently no regulations controlling how much radio pollution these satellites can emit, making it harder for astronomers to mitigate the impact on their work.
PYQ:
[2011] A layer in the Earth s atmosphere called Ionosphere facilitates radio communication. Why?
1. The presence of ozone causes the reflection of radio waves to Earth.
2. Radio waves have a very long wavelength.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Prelims level: Mary Poonen Lukose and her contributions
Why in the News?
100 years ago, on September 23, 1924, Mary Poonen Lukose became the first woman to join a legislative council in an Indian princely state, entering the Travancore Legislative Council.
Who Was Mary Poonen Lukose?
Born on August 2, 1886, in Kerala, she became the first woman from the state to earn a medical degree, specialising in gynaecology and obstetrics.
Her contributions:
She performed the first cesarean section in Kerala before 1920, often working under challenging conditions with minimal equipment.
She started a midwifery training program for local women, which led to safer home births, reducing risks for mothers and babies.
As a member of the Travancore Legislative Council, she influenced public health policy, using her expertise to benefit the community.
Records set by Mary Poonen Lukose
First woman legislator in an Indian princely state: In 1924, she became the first woman member of the Travancore Legislative Council (a predecessor to Kerala’s Legislative Assembly).
First woman graduate from Madras University in 1909, despite facing barriers to studying science as a woman.
First woman Surgeon General of Travancore, and possibly the first woman Surgeon General in the world, in 1938.
First woman to head the health department in Travancore, in 1924.
Awarded the Padma Shri in 1975 for her contributions.
PYQ:
[2013] Defying the barriers of age, gender and religion, the Indian women became the torch bearer during the struggle for freedom in India. Discuss. (10 marks-200 words).
[2011] With reference to Indian freedom struggle, Usha Mehta is well-known for
(a) Running the secret Congress Radio in the wake of Quit India Movement
(b) Participating in the Second Round Table Conference
(c) Leading a contingent of Indian National Army
(d) Assisting in the formation of Interim Government under Pandit Jawaharlal Nehru
Previously, this term was associated with laws like the Prevention of Money Laundering Act (PMLA), 2002 or within the Code of Criminal Procedure (CrPC) under provisions for attachment and forfeiture.
AboutSection 107 of the BNSS
Section 107 of the BNSS, 2023 pertains to the attachment and forfeiture of property categorized as “proceeds of crime.”
It grants the court the authority to attach property at the request of a police officer during an ongoing investigation.
The request must be approved by a Superintendent or Commissioner of Police.
This section gives the court unbridled powers to attach any property believed to be derived from criminal activities and, under specific conditions, to forfeit it to the government.
There is no requirement for the police officer to wait until the completion of the investigation (unlike earlier laws).
Property can be attached during the investigation.
It differs from the PMLA, 2002, in that there are no preconditions like documenting the reasons for believing the property is a result of criminal activity.
After attachment, if the court finds the property to be proceeds of crime, it can direct the District Magistrate to distribute the proceeds to the affected persons within 60 days.
If no claimants are identified, the proceeds are forfeited to the government.
There is a requirement for issuing a show-cause notice within 14 days for the property attachment, and the court can pass an ex parte order if no representation is made.
Its significance
Empowers Law Enforcement: It allows attachment of property during investigations, preventing criminals from hiding or transferring assets.
Faster Relief for Victims: It enables quick distribution of proceeds of crime to affected persons even before the trial concludes.
Stronger Deterrence: It acts as a deterrent by allowing the forfeiture of criminally acquired assets, impacting offenders financially.
State-Level Enforcement: It empowers State governments to manage proceeds of crime, providing more localized control.
PYQ:
[2021] Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels.
From UPSC perspective, the following things are important :
Prelims level: Greenland Landslide, Dickson Fjord
Why in the News?
In September 2023, seismic stations across the world detected an unusual signal which persisted for 9 days.
It was caused by a massive landslide in Greenland’s Dickson Fjord (i.e narrow sea inlet with steep sides or cliffs, created by a glacier).
About the Massive Greenland Landslide
The landslide involved a colossal volume of 25 million cubic metres of rock and ice, equivalent to filling 10,000 Olympic-sized swimming pools.
The landslide involved 25 million cubic meters of rock and ice, which is enough to fill 10,000 Olympic-sized swimming pools.
This event caused a mega-tsunami with waves as high as 200 meters, which significantly impacted the area.
The seismic waves created by the landslide lasted for 9 consecutive days.
The loss of such a large amount of glacier ice highlights how global warming is speeding up damage to these fragile environments.
Causes of the Greenland Landslide
The main reason for the landslide was global warming, which caused the glaciers in Greenland to melt and shrink over recent decades.
The Hvide Stovhorn peak glacier had been holding up the mountain slopes, but as it thinned, the rock above it became unstable and eventually collapsed.
The permafrost (frozen ground) on the mountain’s steep slopes started melting because of rising temperatures, making the slopes unstable.
When the rocks and ice fell into the fjord, it triggered a submarine landslide (a landslide under water), which made the event even bigger and caused a mega-tsunami.
