Daily Current Affairs (DCA) 18 June, 2025

Daily Current Affairs Quiz
18 June, 2025

International Affairs

1. Bonn Climate Change Conference 2025

Context:

The Bonn Climate Change Conference 2025 marks a critical mid-year milestone for global climate governance, convening negotiators, scientists, policymakers, and civil society actors. The conference sets the technical agenda for COP29, scheduled later this year, and evaluates the implementation of prior climate commitments under the UNFCCC and the Paris Agreement.

What is the Bonn Climate Change Conference?

• Purpose: An annual meeting focused on the scientific, technical, and implementation aspects of global climate negotiations.
• Inception: First held in 1995, following the adoption of the UNFCCC in 1992.
• Host: Bonn, Germany — headquarters of the UNFCCC Secretariat.

Objectives

• COP Preparation: Establishes the foundational technical work for the upcoming COP29 negotiations.
• Implementation Review: Assesses progress on commitments made under global climate agreements, especially the Paris Agreement.
• Science-Policy Integration: Aligns IPCC assessments with policy discussions.
• Finance and Technology Support: Reviews mechanisms for assisting developing countries.
• Inclusive Participation: Engages non-state actors, including indigenous communities, youth, and NGOs, in the global climate dialogue.

Key Features

• Permanent Subsidiary Bodies:
  • SBI (Subsidiary Body for Implementation): Reviews execution of climate policies and actions.
  • SBSTA (Subsidiary Body for Scientific and Technological Advice): Translates climate science into actionable policy frameworks.
• Multilateral Involvement: Includes negotiators from UN member states, scientists, private sector experts, and global civil society organizations.
• Influence on COP Outcomes: Serves as a pre-COP platform that informs and shapes final negotiation texts for COP29.

Theme for 2025
“Operationalising the Global Goal on Adaptation (GGA)”

National Affairs

1. SIPRI 2025 Report

Context:

A new report from the Stockholm International Peace Research Institute (SIPRI) highlights growing concern over nuclear proliferation and modernisation, warning of a gradual erosion of arms control agreements. The 2025 edition confirms that India now holds more nuclear warheads than Pakistan, although both remain far behind China’s rapidly expanding stockpile.

India’s Nuclear Developments

• Current Arsenal: India is estimated to possess 180 nuclear warheads, placing it ahead of Pakistan’s inventory.
• Triad Capability: India maintains a well-established nuclear triad, enabling nuclear delivery via land-based missiles, aircraft, and submarine-launched systems.
• Modernisation Path: India is reportedly working on advanced delivery systems, including canisterised missiles with potential multiple warhead capabilities (MIRVs).
• Doctrinal Evolution: A shift appears underway toward integrating warheads with launch platforms in peacetime, which marks a potential departure from India’s traditional de-mated posture.

Pakistan’s Strategic Arsenal

• Warhead Estimate: SIPRI places Pakistan’s nuclear stock at 170 warheads.
• Operational Focus: The country’s nuclear programme remains centered on deterring India, with an emphasis on tactical nuclear weapons and short-range systems.
• Growth Outlook: Pakistan continues to expand its fissile material production and is likely to increase its warhead count in the coming years.

China’s Expanding Nuclear Capabilities

• Warhead Count: China now holds approximately 600 nuclear warheads, growing by about 100 per year since 2023.
• Infrastructure Build-up: The construction of hundreds of intercontinental ballistic missile (ICBM) silos in remote regions signals strategic ambition.
• Operational Posture: There are signs that China may be moving toward deploying warheads on missiles during peacetime, breaking from earlier restraint.

Global Nuclear Landscape

• Total Inventory: Around 12,241 nuclear weapons exist globally, with roughly 9,614 available for military use.
• Dominant Powers: The United States and Russia continue to dominate global stockpiles, jointly holding over 90% of the world’s nuclear weapons (Russia: 5,459; USA: 5,177).
• Alert Status: An estimated 2,100 warheads are currently kept at high operational readiness.

Key Trends and Concerns

• Technology and Deterrence: The integration of artificial intelligence, cyber operations, quantum computing, and space-based systems into nuclear planning is making traditional deterrence models more complex and unstable.
• Arms Control Setbacks: With the New START treaty set to expire in 2026 and no new agreements in place, the world is at risk of entering an era of unchecked nuclear expansion.
• Strategic Instability: Disinformation campaigns and compressed decision-making timelines heighten the risk of miscalculation or unintended escalation.

India-Pakistan Tensions in 2025

The report highlights the border escalation earlier this year during ‘Operation Sindoor’, where concerns emerged over potential attacks near sensitive nuclear facilities, underscoring the volatility of the South Asian theatre.

Policy Directions for India

• Balanced Deterrence: India must modernize its capabilities without compromising its doctrine of minimum credible deterrence.
• Domestic Capacity Building: Strengthening indigenous technology in missile systems, early-warning networks, and secure communications will reduce external dependencies.
• Diplomatic Engagement: India should actively pursue regional dialogue on nuclear risk reduction and maintain its voice in global disarmament and non-proliferation platforms.
• Global Responsibility: As a non-NPT nuclear power with a strong track record, India has a strategic opportunity to lead on issues of responsible stewardship of nuclear technology.

The Hindu & The Indian Express

Banking/Finance

1. Fintech Sector Proposes UPI MDR Framework for Large Merchants

Context:

India’s fintech industry is exploring a proposal to introduce a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions—but only for large merchants, while ensuring that end users and small merchants remain unaffected, sources familiar with the policy discussions have said.

Current Government Position

• The Ministry of Finance recently reaffirmed via a post on social media that it has no current plans to levy MDR on UPI payments.

What is Merchant Discount Rate (MDR)?

The Merchant Discount Rate (MDR) is a fee that merchants pay to banks or payment processors for processing debit and credit card transactions. This fee covers the cost of the infrastructure and services required to handle digital payments. The MDR is typically a percentage of the transaction amount, and it varies based on factors like the payment method, transaction volume, and merchant type. 

Key Features of the Proposal

• MDR limited to large merchants: Only large-scale enterprises, such as e-commerce platforms and high-turnover businesses, would be subject to the proposed MDR.
• Small merchants and users protected: The proposal seeks to exempt over 90% of India’s 60 million UPI-accepting merchants, particularly those with annual turnovers of ₹20 lakh or less.
• End users unaffected: Customers will continue to pay zero fees on UPI transactions, regardless of the proposed changes.

Impact of MDR on UPI

• Promoting Digital Payments: MDR was made zero for RuPay debit cards and BHIM-UPI transactions to encourage their adoption. 
• Supporting the Ecosystem: An incentive scheme has been implemented to support payment system participants in delivering services for low-value UPI transactions. 
• Maintaining Cost-Effectiveness: Keeping UPI free ensures its continued use and avoids burdening merchants with additional charges. 

2. RBI to Soon Decide on Small Finance Banks’ Bid for Universal Bank Status

Context:

Reserve Bank of India (RBI) Governor Sanjay Malhotra has confirmed that a decision on applications submitted by small finance banks (SFBs) seeking conversion into universal banks will be taken soon. His remarks were made in an interview earlier this week.

Applications Under Consideration

So far, three SFBs have formally applied for conversion:

• AU Small Finance Bank – Applied in September 2023
• Ujjivan Small Finance Bank – Applied in February 2024
• Jana Small Finance Bank – Applied in June 2025

What Is Universal Banking?

Universal banking is a system in which banks provide a wide variety of comprehensive financial services, including those tailored to retail, commercial, and investment services.

RBI’s Licensing Guidelines Universal Banking Licences in India (2016)

The Reserve Bank of India introduced the ‘On Tap’ Licensing Policy in August 2016 for private sector universal banks. This policy allows eligible applicants to seek a banking licence at any time, enhancing dynamism and competition in the Indian banking sector.

RBI Eligibility Criteria for Conversion

To be considered for conversion into a universal bank, SFBs must meet the following criteria:

• Be a listed entity
• Have a minimum net worth of ₹1,000 crore as of the quarter preceding the application
• Maintain a satisfactory track record for five years as a scheduled bank
• Maintain Gross NPA ≤ 3% and Net NPA ≤ 1% over the last two financial years
• Report net profit in the last two financial years
• Comply with the prescribed capital adequacy norms
• Submit a detailed rationale for conversion
• Maintain a diversified loan portfolio (preferred)

BS

3. SEBI Restructures Derivatives Expiry Days

Context:

In a regulatory move set to reshape market dynamics in India’s equity derivatives segment, the Securities and Exchange Board of India (SEBI) has approved changes in the expiry days of weekly equity derivatives contracts for both the National Stock Exchange (NSE) and the BSE.

Revised Expiry Schedule

• NSE: Weekly equity derivatives contracts will expire on Tuesdays (from current Thursday).
• BSE: Weekly contracts will expire on Thursdays (from current Tuesday).
• Effective Date: The new schedule comes into effect September 1, 2025.
• Existing Contracts: Contracts already listed will retain current expiries, except long-dated index options, which will be realigned.
• New Contracts: No new weekly index futures can be launched after July 1, 2025, per SEBI’s directive.

SEBI’s Rationale

• The changes are aimed at reducing hyperactivity and concentration risk on expiry days.
• SEBI wants to curb frequent expiry day changes and ensure product differentiation between exchanges.
• The regulator limited expiry days to two per week, pushing exchanges to choose separate days.

Implications for Market Participants

For NSE:

• NSE contracts, being more liquid and preferred, may attract increased participation with the shift to Tuesday.
• As expiries move closer to the beginning of the trading cycle, premium values just ahead of expiry are expected to decline, making trades more cost-effective.
• Increased activity and potential market share gains are anticipated.

For BSE:

• BSE may suffer a loss of momentum due to the shift, possibly ceding 200–300 basis points in market share, per Nuvama Research.
• Shares of BSE have already dropped over 10% from recent highs amid concerns of trading volume erosion.
• However, BSE CEO Sundararaman Ramamurthy maintains that Thursdays remain familiar to market participants, potentially softening the blow.

TET

4. RBI Tightens KYC Notification Norms to Boost Consumer Protection and Service Delivery

Context:

In a move aimed at enhancing consumer protection and ensuring timely compliance with Know Your Customer (KYC) norms, the Reserve Bank of India (RBI) has introduced new notification guidelines for banks and regulated entities. These rules are to be implemented by January 1, 2026.

Key Directives for KYC Update Notifications

• Advance Notification Requirement
  • Banks must send at least three advance notifications to customers before the KYC update becomes due.
  • These must include one physical letter and other alerts via SMS, email, or app notifications.
• Post-Due Date Reminders
  • If the customer fails to update KYC by the due date, banks must send three additional reminders.
  • One of these must also be in the form of a physical letter.
• Clarity and Accessibility
  • All notifications must provide:
    • Simple, clear instructions on how to update KYC
    • Escalation mechanisms for support
    • Clear disclosure of consequences for non-compliance
• Mandatory Audit Trail
  • Each notification attempt must be recorded digitally to create a verifiable audit trail.

Consumer-Friendly Enhancements

• Involvement of Business Correspondents (BCs)
  To aid customers, especially in rural and remote areas, RBI has permitted BCs to assist in the KYC update process.
• Simplified Process for Minor Changes
  • Customers who have unchanged details or have only updated their address can now submit a self-declaration through a BC.

Implications

These enhanced notification norms are designed to:

• Reduce disruption in banking services due to missed KYC deadlines
• Ensure inclusive compliance, especially for rural populations
• Strengthen auditability and transparency in KYC enforcement processes

5. SEBI Bars IIFL Director Sanjiv Bhasin for Front Running Using Public Stock Recommendations

Context:

In a rare and significant regulatory action, the Securities and Exchange Board of India (SEBI) has barred Sanjiv Bhasin, Director at IIFL Securities, from participating in the securities market for engaging in fraudulent front-running practices—a first involving a high-profile research analyst.

Key Findings by SEBI

Nature of Violation

• Bhasin purchased stocks prior to recommending them publicly on television channels and IIFL’s Telegram channel.
• After recommending these stocks to the public—mainly “buy” calls—he sold them post-price surge, thereby securing illicit gains.
• Front Running
  • Front running generally involves exploiting non-public information about a large impending trade to profit from the subsequent price movement. 

Stocks Involved

• Prominent listed entities such as:
  • L&T Technology Services
  • Parag Milk Foods
  • InterGlobe Aviation
  • SAIL
  • Godrej RCP

6. Supervisory Data Quality Index (sDQI) for Scheduled Commercial Banks

Context:

The Supervisory Data Quality Index (sDQI) for Scheduled Commercial Banks (SCBs) improved marginally to 89.3 in March 2025, up from 88.6 in March 2024, according to the Reserve Bank of India (RBI). The sDQI evaluates the accuracy, timeliness, completeness, and consistency of supervisory returns submitted by banks to the RBI.

Scoring Benchmarks

The RBI classifies sDQI scores into the following categories:

• Above 90: Good
• 80–90: Acceptable
• 70–80: Needs Improvement
• Below 70: Major Concerns

Segment-wise Performance in March 2025

• Small Finance Banks (SFBs):
  Highest sDQI among SCBs at 90.6, though slightly down from 91.0 in March 2024.
• Public Sector Banks (PSBs):
  Declined to 88.8, from 89.2 in the previous year.
• Private Sector Banks:
  Improved to 89.6, up from 88.9.
• Foreign Banks:
  Recorded a significant rise to 89.1, from 87.6 in March 2024.

Coverage and Scope

• The index covers 87 Scheduled Commercial Banks and evaluates the quality of key returns submitted to RBI, including:
  • Return on Asset Liability and Off-Balance Sheet Exposures
  • Return on Asset Quality
  • Return on Operating Results
  • Risk-Based Supervision Return
  • Liquidity Return
  • Return on Capital Adequacy
  • CRILC (Central Repository of Information on Large Credits) – Main

TET

7. RBI Proposes Eased Reporting Norms for Rupee Interest Rate Derivatives

Context:

The Reserve Bank of India (RBI) has released draft guidelines aimed at reducing the compliance burden and enhancing transparency in the reporting of rupee interest rate derivatives. The proposed framework seeks to align domestic reporting practices with global standards while providing greater operational flexibility to market participants.

Key Objectives

• Rationalize reporting timelines and compliance obligations
• Introduce international best practices for derivative transaction reporting
• Support efficient hedging and risk management in the rupee interest rate market

Understanding Interest Rate Derivatives

Interest rate derivatives are financial instruments whose value is derived from:

• Rupee interest rates
• Prices of rupee-denominated instruments
• Interest rate indices

Key Functions of Interest Rate Derivatives:

• Hedging against fluctuations in interest rates
• Speculating on interest rate movements
• Managing interest rate exposure using instruments like:
  • Interest rate futures
  • Forward rate agreements (FRAs)
  • Interest rate swaps
  • Collar and reverse collar structures

Proposed Reporting Reforms

• Rationalised Reporting Timelines:
  • Non-resident transactions not settled in INR: Must be reported to the Trade Repository of Clearing Corporation of India (CCIL) within 30 minutes.
  • Foreign currency transactions: Reporting deadline extended to 12:00 PM on the next business day.
• Current Requirements:
  • Mandate 30-minute reporting for all transactions, along with a stated purpose.
  • These are now under review for relaxation under the draft guidelines.

Economy

1. India’s May Inflation at 75-Month Low

Context:

India’s inflation figures for May 2025 delivered unexpected relief, with retail inflation plunging to a 75-month low of 2.8% and wholesale inflation dropping to 0.4%, its lowest in over a year. The sharp disinflation was largely attributed to cooling food prices and a slump in crude oil and natural gas costs. However, recent geopolitical tensions and climatic uncertainties may reverse these gains in the coming months.

Key Drivers Behind the Decline

• Food Prices Eased: A major contributor to the dip in retail inflation was a broad-based fall in food prices.
• Crude and Natural Gas Prices Contracted: Wholesale inflation was pushed down by a 12.4% contraction in oil and gas prices, caused by global oversupply and weakening demand.
• Global Oil Trends Helped India: With India importing nearly 80% of its crude oil, lower global oil prices significantly impacted domestic wholesale inflation.

RBI Forecast and Monetary Policy Update

• In its June 11 monetary policy review, the Reserve Bank of India (RBI) revised its annual inflation forecast to 3.7%, down from 4% in April.
• The RBI also shifted its stance to ‘neutral’, signaling flexibility for both rate hikes and cuts depending on inflationary trends.

Emerging Risks: Geopolitics and Monsoon Uncertainty

• Israel-Iran Tensions
  • On June 13, oil prices surged by 8% in a single day following Israel’s strike on Iran.
  • Any escalation or blockage of the Strait of Hormuz could disrupt India’s oil supplies from major exporters like Iraq, Saudi Arabia, and the UAE.
• Uncertain Monsoon Patterns
  • While the monsoon has recently picked up, its initial slow progress raised concerns.
  • A disruption in the food supply chain could quickly reverse the current decline in food prices.
  • Historical patterns show that even with normal monsoon levels overall, uneven spatial distribution can leave key agricultural belts dry.

Agriculture

1. Tropical Agro Launches #SawalKalKaHai Campaign to Promote Sustainable Agriculture

Context:

Tropical Agrosystem (India) Pvt Ltd, a key player in the crop protection and plant nutrition industry, has launched an ambitious sustainability campaign titled #SawalKalKaHai. The initiative is aimed at empowering farmers, promoting environmentally friendly agricultural practices, and encouraging urban consumers to make informed food choices that safeguard both human health and ecological integrity.

Campaign Vision and Objectives

The #SawalKalKaHai campaign highlights the critical link between farming practices and consumer choices, seeking to:

• Foster nationwide awareness on sustainable agriculture and food systems.
• Emphasize the importance of soil health, ecological preservation, and long-term food security.
• Inspire collective action by farmers and consumers to build a sustainable and resilient food ecosystem.

Key Features of the Campaign

• Educational Film: A core component of the campaign is a compelling film that traces the journey of food from soil to plate, illustrating how everyday decisions affect the environment and public health.
• Sustainability Messaging: The campaign underscores that “sustainability begins in the soil and ends on our plates,” reinforcing the need for environmentally sound farming and responsible consumption.

Significance and Impact

• Build long-term awareness and behavioral change among both agricultural communities and urban consumers.
• Position sustainability at the center of India’s food and farming discourse.
• Support national goals on climate-smart agriculture and soil conservation.

Facts To Remember

1. Will highlight Global South at G7 meet: PM

India will highlight the priorities of the Global South at the G7 summit in Canada, said Prime Minister Narendra Modi, who reached Calgary on Tuesday to participate in the G7 Outreach Summit. 

2. Kerala High Court Bans Single-Use Plastics in Tourist and Event Locations from October 2

In a significant move to combat plastic pollution, the Kerala High Court has ordered a ban on single-use plastic items in select areas of the State, effective from October 2, coinciding with Gandhi Jayanthi. The directive comes in response to growing environmental concerns over unregulated and irresponsible plastic waste disposal.

3. U.K. fighter jet Royal Navy F-35B grounded for third day

The Royal Navy F-35B fighter jet of the U.K. government that made an emergency landing at Thiruvananthapuram International Airport on June 14 remains grounded for the third day after it developed a technical snag.

4. Fintech app POP raises $30 mn from fintech Razorpay

Consumer payments application POP raised $30 million from businesstobusiness fintech Razorpay on Thursday,a year after the firm launched its operations on Indias real time payments system Unified Payments Interface (UPI). The investment will enable Razorpay to expand its presence in the businesstoconsumer segment.

5. Adobe Launches Firefly App on Android and iOS, Bringing AI Image and Video Tools to Mobile Users

Adobe has officially launched a standalone Firefly app for Android and iOS, expanding access to its artificial intelligence (AI) tools for image and video generation. This marks the first time Adobe’s Firefly features are available in a dedicated mobile interface, targeting both casual creators and professionals.

6. Sebi Bars IIFL Securities’ Ex-Director Bhasin, 11 Others for ‘Manipulation’

The Securities and Exchange Board of India (Sebi) on Tuesday barred Sanjiv Bhasin, a former director at IIFL Securities, and 11 others for their alleged involvement in stock manipulation. 

7. Vietnam officially Joins BRICS As ‘Partner Country’

Brazil’s Foreign Ministry has announced that Vietnam has officially joined BRICS as a partner country. The ministry’s statement said that, as a dynamic economy deeply integrated into global value chains, Vietnam is an important player in Asia.