Daily Current Affairs (DCA) 11 June, 2026

Daily Current Affairs Quiz
11 June, 2026

National Affairs

1. India Calls for Dialogue on Climate Finance at Bonn Climate Conference 2026 (SB64)

Source: TH

Context:

At the UN climate change negotiations in Bonn, Germany (SB64), India called for addressing the shrinking pool of international climate finance and the widening adaptation funding gap. India argued that developed countries must honour their legal obligation under Article 9.1 of the Paris Agreement to provide climate finance to developing nations. India highlighted that the adaptation finance gap is 10 to 18 times current public flows, while developing nations need USD 5 to 6 trillion by 2030 to implement their NDCs. India aligned with the G77 and China, LMDCs, and the BASIC bloc.

India’s Key Concerns at Bonn (SB64)

• Shrinking pool of international climate finance.
• Widening adaptation funding gap.
• Inadequate post-2025 climate finance targets.
• Need to honour the Paris Agreement’s Article 9.1.

The Bonn Climate Conference 2026 topic has been covered twice in this conversation (the original article and the “India Calls for Dialogue on Climate Finance” angle). Here is a compact supplementary revision pack with memory aids and fresh MCQs.

Bonn Climate Conference 2026 (SB64)

The Bonn Climate Conference 2026 is the 64th Sessions of the Subsidiary Bodies (SB64) under the UNFCCC. Held in Bonn, Germany (where the UNFCCC Secretariat sits), it is the mid-year technical and preparatory meeting ahead of COP31.

What is Climate Finance?

• Climate finance refers to local, national, or transnational financing from public, private, and alternative sources of capital that supports mitigation and adaptation actions to address climate change.
• Has two main goals:
  • Mitigation: Reducing greenhouse gas (GHG) emissions (renewable energy, electric mobility, energy efficiency).
  • Adaptation: Adjusting to climate impacts (flood protection, drought-resilient agriculture, coastal defence).

What is the Common But Differentiated Responsibilities (CBDR) Principle?

• A foundational principle of the UNFCCC and the Paris Agreement.
• States that all countries are responsible for tackling climate change, but developed countries have a greater responsibility because of:
  • Their historical emissions.
  • Their higher economic capacity.
• Reflected in the Paris Agreement as “CBDR-RC” (Common But Differentiated Responsibilities and Respective Capabilities).

Practice MCQs

Q1. With reference to India’s intervention on climate finance at Bonn SB64, consider the following statements:

1. India called for addressing the shrinking pool of international climate finance and the widening adaptation finance gap.
2. The UN estimates the adaptation finance gap to be 10 to 18 times the current international public flows.
3. Developing nations cumulatively require USD 5 to 6 trillion by 2030 to implement their NDCs.
4. India argued that developed countries have no legal obligations under the Paris Agreement on climate finance.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; Article 9.1 of the Paris Agreement makes it legally mandatory for developed countries to provide climate finance.)

Q2. With reference to the New Collective Quantified Goal (NCQG) and climate finance frameworks, consider the following statements:

1. The NCQG is the post-2025 climate finance target under the Paris Agreement.
2. The proposed NCQG of USD 300 billion annually by 2035 has been criticised by developing blocs as inadequate.
3. The Paris Agreement’s Article 9.1 makes it legally mandatory for developed countries to provide climate finance to developing nations.
4. The Loss and Damage Fund was created at COP27 (2022) and operationalised at COP28 (2023).

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q3. With reference to climate negotiation blocs that India is part of, consider the following statements:

1. India is part of the G77 and China, a bloc of about 134 developing countries.
2. India is part of the LMDC (Like-Minded Developing Countries) negotiation group.
3. India is part of the BASIC bloc, along with Brazil, South Africa, and China.
4. India is a member of the AOSIS (Alliance of Small Island States) bloc.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; India is not a member of AOSIS, which is a bloc of small island states.)

Q4. With reference to the Common But Differentiated Responsibilities (CBDR) principle, consider the following statements:

1. CBDR is a foundational principle of the UNFCCC and the Paris Agreement.
2. CBDR recognises that all countries share responsibility for tackling climate change, but developed countries bear greater historical responsibility.
3. The Paris Agreement formalises CBDR with the additional element of “Respective Capabilities” (RC), as CBDR-RC.
4. CBDR-RC has been formally abandoned in recent global climate negotiations.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; CBDR-RC remains the foundational principle of UNFCCC negotiations and has not been abandoned.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because Article 9.1 of the Paris Agreement makes it legally mandatory for developed countries to provide climate finance.
2. (d), All four statements are correct.
3. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is not a member of AOSIS.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because CBDR-RC remains the foundational principle.

2. Bloomberg Global Aggregate Bond Index

Source: Business Standard

Context:

India is currently executing major capital market reforms to secure the inclusion of its government bonds in the prestigious Bloomberg Global Aggregate Bond Index. The reforms include scrapping withholding and capital gains tax on foreign G-sec investments, expanding the Fully Accessible Route (FAR) to new 15-, 30-, and 40-year G-secs, and operational improvements in registration, settlement, and tax processes. Bloomberg Index Services is expected to seek investor feedback on India’s inclusion later this month. Analysts estimate that inclusion could bring USD 20-25 billion in passive foreign investment at a 7-10 per cent index weight (a small share of the global index, but large for India).

The Index

• Name: Bloomberg Global Aggregate Bond Index.
• Maintained by: Bloomberg Index Services Limited.
• Nature: A flagship international fixed-income benchmark.
• Tracks: Investment-grade, fixed-rate bonds globally, including sovereign, supranational, and corporate debt.
• Coverage: Multi-currency, multi-trillion-dollar global debt markets.
• Used by: Sovereign wealth funds, pension funds, insurers, and global asset managers.

India’s Inclusion Status

• India has been a candidate for inclusion for years, but operational gaps have delayed it.
• Bloomberg is expected to seek investor feedback later this month on adding Indian G-secs to the Global Aggregate Index.
• Estimated index weight for India: 7-10 per cent of the Emerging Market component (about 0.6 to 1.0 per cent of the overall index in practice).
• Estimated passive inflows on inclusion: USD 20-25 billion.

What Are FAR Bonds?

• FAR (Fully Accessible Route) was introduced by the RBI in 2020.
• Under FAR, specified G-secs can be bought by FPIs, NRIs, and OCIs without any investment cap.
• The FAR is central to India’s index inclusion strategy, as global indices require unrestricted foreign access.
• The FAR list has been expanded in 2026 to include all new 15-, 30-, and 40-year G-secs.

India’s Position in Global Bond Indices Hierarchy

• JPMorgan GBI-EM Global Diversified Index: India included June 2024 onwards, phased over 10 months to reach 10 per cent weight.
• Bloomberg EM Local Currency Government Index: India included in 2025.
• FTSE Russell EM Government Bond Index: India included in September 2025.
• Bloomberg Global Aggregate Bond Index: India’s next major target.

How Does an “Aggregate Bond Index” Work?

• Tracks the performance of a basket of bonds.
• The basket includes investment-grade, fixed-rate bonds in multiple currencies and issuer types.
• Each bond is weighted by market value, with adjustments for liquidity and other rules.
• Investors can:
  • Passively replicate the index through ETFs or index funds.
  • Actively manage by deviating from the index and measuring performance against it.

Key Risks and Cautions

• Foreign portfolio flows can be volatile.
• A sudden reversal (a “sudden stop”) can hurt the rupee and bond yields.
• India still needs to manage its rupee, current account, fiscal deficit, and macro stability.
• Index inclusion is not a one-time event; continued reform momentum matters.

Practice MCQs

Q1. With reference to the Bloomberg Global Aggregate Bond Index, consider the following statements:

1. It is a flagship international fixed-income benchmark tracking investment-grade, fixed-rate bonds globally.
2. It is maintained by Bloomberg Index Services Limited.
3. It is widely tracked by sovereign wealth funds, pension funds, insurers, and global asset managers.
4. India is already a constituent of the Bloomberg Global Aggregate Bond Index.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; India is a candidate, not yet a constituent, of the Bloomberg Global Aggregate Bond Index.)

Q2. With reference to the Fully Accessible Route (FAR), consider the following statements:

1. The FAR was introduced by the RBI in 2020.
2. Under FAR, specified G-secs can be bought by FPIs, NRIs, and OCIs without any investment cap.
3. The FAR list has been expanded in 2026 to include new 15-, 30-, and 40-year G-secs.
4. The FAR applies only to corporate bonds and excludes Indian government securities.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the FAR applies to Indian Government Securities (G-secs), NOT only corporate bonds.)

Q3. With reference to India’s bond index inclusion journey, consider the following statements:

1. India was included in the JPMorgan GBI-EM Global Diversified Index starting in June 2024.
2. India was included in the Bloomberg EM Local Currency Government Index in 2025.
3. India was included in the FTSE Russell EM Government Bond Index in September 2025.
4. India was the first country to be included in the JPMorgan GBI-EM Global Diversified Index when it was launched in the 1990s.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the JPMorgan EM index existed long before India’s inclusion, which happened only in June 2024.)

Q4. With reference to the macroeconomic significance of global bond index inclusion, consider the following statements:

1. Inclusion can bring more predictable, long-term passive inflows from index trackers.
2. Inflows can help fund India’s current account deficit in a non-debt-creating way.
3. Larger foreign holdings in G-secs can lower the government’s borrowing costs over time.
4. Once India is included in a major global bond index, it can stop pursuing further macro reforms.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; inclusion is not a one-time event, and continued reform momentum is needed to sustain foreign confidence.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because India is a candidate, not yet a constituent, of the Bloomberg Global Aggregate Bond Index.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the FAR applies to G-secs, not only corporate bonds.
3. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because India was included in the JPMorgan EM index only in June 2024.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because inclusion is not a one-time event and continued reforms are necessary.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (Bond Index, G-secs, FAR, FPI, Capital Flows)
UPSC Mains	GS Paper III on Indian Economy, External sector, Monetary policy, Capital markets
BPSC and State PCS	Economy, Capital markets, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, G-secs, bond markets, FAR, FPI
RBI Grade B	Core area on external sector and monetary policy
SEBI Grade A and IRDAI Grade A	Capital markets, FPI flows, bond markets

3. LPMS Inaugurated as “Vinimay” at Vigyan Bhawan

Source: News on Air

Context

The Union Home Minister has officially inaugurated the Land Port Management System (LPMS) platform, now named “Vinimay”, at Vigyan Bhawan in New Delhi. Developed by the Land Ports Authority of India (LPAI) under the Ministry of Home Affairs, Vinimay is a centralised, real-time electronic Single Window for operations across India’s international land ports. The system eliminates nearly 90 per cent of physical paperwork, reduces truck waiting times by 40 to 60 per cent, and cuts gate processing times by 22 to 35 per cent. It integrates ICEGATE, CBIC, BSF, UIDAI, DGFT, ULIP, and the National Motor Vehicle System on one dashboard. Vinimay currently covers India’s 15 active land ports, with capacity to onboard 11 more over the next three years.

The Vinimay Platform

• Name: Vinimay (LPMS platform).
• Inaugurated by: Union Home Minister, at Vigyan Bhawan, New Delhi.
• Developer: Land Ports Authority of India (LPAI).
• Ministry: Ministry of Home Affairs (MHA).
• Nature: Centralised, real-time electronic Single Window for land ports.

Database Integrations in Vinimay

• ICEGATE and CBIC: For customs filing and financial compliance tracking.
• BSF (Border Security Force): For frontline physical border guarding and security verification.
• UIDAI: For biometric and identity checks.
• DGFT (Directorate General of Foreign Trade): For trade licences.
• ULIP (Unified Logistics Interface Platform): For logistics chain visibility.
• National Motor Vehicle System (NMVS): For commercial vehicle tracking.

Key Technology Features

• Automatic Number Plate Recognition (ANPR) cameras at entry and exit gates.
• Real-time inter-agency data sharing on a single dashboard.
• Pre-booked slot matching for arriving vehicles.
• Replacement of manual logbook entries with automated recording.

What is the Unified Logistics Interface Platform (ULIP)?

• A digital platform under PM Gati Shakti, developed by the Ministry of Road Transport and Highways (MoRTH) in partnership with the NICDC.
• Aggregates data from multiple government and private logistics platforms.
• Standardises APIs for logistics integration.
• Helps logistics players access real-time data on vehicles, cargo, ports, warehouses, and connectivity.

What is UIDAI?

• Unique Identification Authority of India, established under the Aadhaar Act, 2016.
• Issues Aadhaar numbers to Indian residents.
• Operates the world’s largest biometric identity database.
• Provides authentication services to banks, telecoms, government schemes, and other entities.

What is ANPR Technology?

• Automatic Number Plate Recognition (ANPR) uses optical character recognition (OCR) and machine learning to read vehicle number plates from CCTV cameras.
• Used in tolling, e-challans, parking, traffic management, and border security.
• Reduces manual checks and provides instant data.

India’s Major Land Ports / Integrated Check Posts (ICPs)

• Attari (India-Pakistan).
• Petrapole, Sutarkandi, Dawki, Akhaura (India-Bangladesh).
• Raxaul, Jogbani, Sunauli, Banbasa, Rupaidiha (India-Nepal).
• Phuentsholing/Jaigaon (India-Bhutan).
• Moreh, Avankhu (India-Myanmar).
• 15 active land ports total at present.

Practice MCQs

Q1. With reference to the Vinimay platform of the Land Ports Authority of India, consider the following statements:

1. Vinimay is the LPMS platform that serves as a Single Electronic Window for operations across India’s land ports.
2. It was developed by the Land Ports Authority of India (LPAI) under the Ministry of Home Affairs.
3. The platform was inaugurated at Vigyan Bhawan, New Delhi by the Union Home Minister.
4. Vinimay is a project of the Ministry of Commerce and Industry, not the Ministry of Home Affairs.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the LPMS and Vinimay are under the Ministry of Home Affairs, NOT the Ministry of Commerce and Industry.)

Q2. With reference to the performance metrics of the Vinimay platform, consider the following statements:

1. The platform eliminates nearly 90 per cent of physical paperwork.
2. Truck waiting times at the border are reduced by 40 to 60 per cent.
3. Gate processing times are reduced by 22 to 35 per cent.
4. The platform increases manual logbook entries to improve security.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the platform eliminates manual logbook entries through ANPR automation.)

Q3. With reference to the database integrations in the Vinimay platform, consider the following statements:

1. The platform integrates with ICEGATE and CBIC for customs filing and financial compliance tracking.
2. It integrates with BSF for frontline physical border guarding and security verification.
3. It integrates with UIDAI for biometric and identity checks, and with DGFT for trade licences.
4. The platform has no integration with the Unified Logistics Interface Platform (ULIP) or the National Motor Vehicle System.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the platform integrates with both ULIP and the National Motor Vehicle System for logistics and vehicle tracking.)

Q4. With reference to India’s land ports network, consider the following statements:

1. Vinimay currently covers India’s 15 active land ports.
2. The platform has built-in capacity to onboard 11 more land ports over the next 3 years.
3. The Land Ports Authority of India (LPAI) was set up under the Land Ports Authority of India Act, 2010.
4. India’s only land port with Pakistan is at Petrapole.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; India’s main land port with Pakistan is at Attari, NOT Petrapole. Petrapole is on the India-Bangladesh border.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because Vinimay is under the Ministry of Home Affairs.
2. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the platform eliminates manual logbook entries.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the platform integrates with both ULIP and the National Motor Vehicle System.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because India’s main land port with Pakistan is at Attari.

Banking/Finance

1. RBI Issues Draft CCR Framework Aligned with Global Standards

Source: ET

Context:

The Reserve Bank of India (RBI) has issued draft guidelines for computing banks’ Counterparty Credit Risk (CCR) from derivative transactions and the capital requirements for bank exposures to Central Counterparties (CCPs). The new guidelines bring India’s CCR framework in line with international standards, particularly the Basel III standards. The draft clarifies the scope of CCR across both banking and trading book exposures, treatment of multiple margin agreements and multiple netting sets, and clearing arrangements at SEBI-recognised stock exchanges. Public feedback is open until 1 July 2026, and the guidelines will be effective from 1 April 2027.

The Draft Guidelines

• Issuing authority: Reserve Bank of India (RBI).
• Subject: Counterparty Credit Risk (CCR) framework for banks.
• Public feedback window: Open until 1 July 2026.
• Effective date: 1 April 2027.
• Alignment: With international (Basel) standards.

Categories of Transactions Covered

• Over-the-Counter (OTC) derivatives.
• Exchange-traded derivatives.
• Securities financing transactions (SFTs).
• Long-settlement transactions in the banking book.
• OTC derivatives include repo-style and other transactions booked in the trading book, separate from the market risk capital requirement.

What is Counterparty Credit Risk (CCR)?

• The risk that a counterparty in a financial transaction will default before the final settlement of the transaction.
• Unlike traditional credit risk, which arises from a loan, CCR arises from a two-way contract like a derivative.
• The size of CCR is uncertain because the value of the contract changes over time.
• Major sources of CCR: OTC derivatives, repos, securities lending, and long-settlement transactions.

What is a Derivative?

• A financial contract whose value is derived from an underlying asset, like stocks, bonds, currencies, interest rates, commodities, or indices.
• Major types:
  • Forwards: Customised contracts for future delivery.
  • Futures: Standardised, exchange-traded contracts.
  • Options: Contracts giving the right (not obligation) to buy or sell.
  • Swaps: Contracts to exchange cash flows over time.

OTC vs Exchange-Traded Derivatives

• OTC derivatives:
  • Privately negotiated between two parties.
  • Customised terms.
  • Bilateral counterparty risk.
  • Higher CCR.
• Exchange-traded derivatives:
  • Standardised contracts.
  • Cleared through a Central Counterparty (CCP).
  • Lower CCR because the CCP becomes the counterparty to both sides.

What is a Central Counterparty (CCP)?

• A clearing house that stands between two parties in a derivative transaction, acting as the buyer to every seller and the seller to every buyer.
• This is called novation.
• Examples in India:
  • Clearing Corporation of India Limited (CCIL) for G-secs and forex.
  • National Securities Clearing Corporation Limited (NSCCL) of NSE.
  • Indian Clearing Corporation Limited (ICCL) of BSE.
  • Multi Commodity Exchange Clearing Corporation (MCXCCL) for commodities.
• CCPs reduce systemic risk by centralising risk management, collateral, and margining.

What are Banking and Trading Books?

• Banking Book: Assets and liabilities that a bank intends to hold to maturity, like loans, advances, and HTM securities. Subject to credit risk capital requirements.
• Trading Book: Assets and liabilities held for trading purposes, with frequent buying and selling. Subject to market risk capital requirements.

What is a “Netting Set” and “Margin Agreement”?

• Netting Set: A group of transactions between a bank and a counterparty that can be legally netted off (offset against each other) for risk calculation purposes.
• Margin Agreement: A contract that requires the counterparty to post collateral (margin) to secure their obligations in derivative transactions.
• Banks may have multiple netting sets and multiple margin agreements with the same counterparty.

What are Basel Standards?

• International banking standards issued by the Basel Committee on Banking Supervision (BCBS).
• Basel I (1988): Focused on credit risk and minimum capital adequacy.
• Basel II (2004): Added market risk, operational risk, and three pillars.
• Basel III (2010 onwards): Strengthened capital, liquidity, and leverage standards, especially after the 2008 Global Financial Crisis.
• Basel III also strengthened CCR requirements in response to the derivatives blowups during 2008.

Practice MCQs

Q1. With reference to the RBI’s draft Counterparty Credit Risk (CCR) framework, consider the following statements:

1. The draft framework brings India in line with international standards, particularly Basel III.
2. The categories covered include OTC derivatives, exchange-traded derivatives, securities financing transactions, and long-settlement transactions.
3. Public feedback on the draft is open until 1 July 2026, with the framework effective from 1 April 2027.
4. The draft framework completely excludes treatment of bank exposures to Central Counterparties (CCPs).

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the draft specifically covers capital requirements for bank exposures to Central Counterparties (CCPs).)

Q2. With reference to Counterparty Credit Risk (CCR) and derivatives, consider the following statements:

1. CCR is the risk that a counterparty in a financial transaction will default before settlement.
2. OTC derivatives are privately negotiated between two parties and carry higher CCR.
3. Exchange-traded derivatives are cleared through Central Counterparties (CCPs), reducing CCR.
4. Notional value of a derivative is the same as its actual market value.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; notional value is the face value of a contract, NOT its actual market value.)

Q3. With reference to Central Counterparties (CCPs) in India, consider the following statements:

1. The Clearing Corporation of India Limited (CCIL) acts as a CCP for G-secs and forex markets.
2. The National Securities Clearing Corporation Limited (NSCCL) is the clearing arm of NSE.
3. The Indian Clearing Corporation Limited (ICCL) is the clearing arm of BSE.
4. CCPs increase systemic risk in financial markets by centralising counterparty exposures.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; CCPs reduce systemic risk by centralising risk management, collateral, and margining, NOT increase it.)

Q4. With reference to Basel standards and banking books, consider the following statements:

1. Basel III was strengthened in response to the 2008 Global Financial Crisis.
2. The banking book consists of assets held with intent to hold to maturity, like loans and HTM securities.
3. The trading book consists of assets held for active trading.
4. Basel I, introduced in 1988, focused primarily on operational risk and was the basis for India’s banking regulations.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; Basel I focused primarily on credit risk and capital adequacy, NOT operational risk.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the draft specifically covers bank exposures to CCPs.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because notional value is the face value, not the actual market value.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because CCPs reduce systemic risk by centralising risk management.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because Basel I focused primarily on credit risk and capital adequacy.

Exam Relevance

Exam	Relevance
UPSC Prelims	GS Paper III on Indian Economy (RBI, CCR, Derivatives, Basel III, CCPs)
UPSC Mains	GS Paper III on Indian Economy, Banking, Financial Stability, Derivatives
BPSC and State PCS	Economy, Banking, Current Affairs
Banking (RBI Gr B, SBI PO, IBPS, NABARD)	Very high importance, CCR, Basel III, Derivatives, CCPs
RBI Grade B	Core area on banking and financial regulation

2. RBI Cancels Registration of 135 NBFCs

Source: Business Standard

Context:

The Reserve Bank of India (RBI) has cancelled the Certificate of Registration (CoR) of 135 non-banking finance companies (NBFCs), including names like Express Fincap House, Akshay Fiscal Services, Times Finance, Jupiter Projects, Jupiter Finvest, Essel Finance Business Loans, and Citiwide Financial Services. Most of these NBFCs were registered in West Bengal. Separately, 13 NBFCs voluntarily surrendered their certificates after exiting the NBFI business, amalgamating, merging, dissolving, or being voluntarily struck off. The action reflects the RBI’s continued cleanup of the NBFC sector as part of its supervisory and prudential oversight.

The RBI Action

• Action: Cancellation of Certificate of Registration (CoR).
• Number of NBFCs: 135.
• Sample names cancelled:
  • Express Fincap House.
  • Akshay Fiscal Services.
  • Times Finance (P).
  • Jupiter Projects (P) and Jupiter Finvest.
  • Essel Finance Business Loans.
  • Citiwide Financial Services.
• Concentration: Most had registered offices in West Bengal.

Voluntary Surrender of Licences

• 13 NBFCs voluntarily surrendered their CoRs.
• Reasons:
  • Exit from NBFI business.
  • Amalgamation, merger, dissolution, or voluntary strike off.

What is an NBFC?

• A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, engaged in the business of loans and advances, acquisition of shares, stocks, bonds, debentures, leasing, hire-purchase, insurance, and chit business.
• NBFCs do not have a banking licence, so they cannot:
  • Accept demand deposits.
  • Issue cheques.
  • Be part of the payment and settlement system.
• They are regulated by the RBI under the RBI Act, 1934.

What is the Certificate of Registration (CoR)?

• Issued by the RBI to NBFCs that meet statutory and prudential requirements.
• Mandatory for any NBFC to operate in India.
• Can be cancelled if the NBFC:
  • Fails to meet capital requirements.
  • Violates RBI rules or directions.
  • Becomes inactive or ceases business.
  • Engages in fraudulent or unfair practices.

Why is the RBI Cancelling Registrations?

• Cleanup of the NBFC sector to:
  • Remove inactive or non-compliant entities.
  • Strengthen financial stability.
  • Protect customers from fraudulent or unregulated lending.
  • Reduce the size of the unregulated grey market.
  • Improve the credibility of the regulated NBFC sector.
• Earlier RBI actions have already cancelled CoRs of hundreds of small NBFCs over recent years.

What is the Scale-Based Regulation (SBR) Framework for NBFCs?

• Introduced by the RBI in October 2021, effective 1 October 2022.
• Classifies NBFCs into 4 layers based on size, activity, and risk perception:
  • NBFC-Base Layer (NBFC-BL):
    • NBFCs not accepting public deposits (NBFC-ND) with asset size below ₹1,000 crore.
    • P2P lending platforms, Account Aggregators, NOFHCs, and NBFCs with no public funds and no customer interface.
  • NBFC-Middle Layer (NBFC-ML):
    • All deposit-taking NBFCs (NBFC-D).
    • Non-deposit taking NBFCs with asset size of ₹1,000 crore and above.
    • HFCs, IFCs, IDFs, CICs, SPDs.
  • NBFC-Upper Layer (NBFC-UL):
    • Top 25 to 30 NBFCs by size, interconnectedness, complexity, and supervisory inputs.
    • Subject to enhanced regulation akin to banks.
  • NBFC-Top Layer (NBFC-TL):
    • Currently empty.
    • Reserved for NBFCs that pose extreme systemic risk (a kind of regulatory “red line”).

Types of NBFCs (Activity-Based)

• Asset Finance Company (AFC).
• Loan Company (LC).
• Investment Company (IC).
• Infrastructure Finance Company (IFC).
• Infrastructure Debt Fund (IDF).
• Core Investment Company (CIC).
• NBFC-Micro Finance Institution (NBFC-MFI).
• NBFC-Factor.
• NBFC-Account Aggregator (NBFC-AA).
• NBFC-Peer-to-Peer (NBFC-P2P).
• Housing Finance Company (HFC) (regulated by RBI since 2019).
• Mortgage Guarantee Company (MGC).
• Standalone Primary Dealers (SPDs).

Practice MCQs

Q1. With reference to the RBI’s recent action on NBFCs, consider the following statements:

1. The RBI has cancelled the Certificate of Registration (CoR) of 135 NBFCs.
2. Many of the NBFCs whose CoRs were cancelled had registered offices in West Bengal.
3. Thirteen NBFCs voluntarily surrendered their CoRs after exiting business or merging.
4. The cancellation of CoRs means the NBFCs can continue to operate without RBI oversight.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; cancellation of CoR means the NBFC cannot operate as an NBFC, NOT continue operating without oversight.)

Q2. With reference to NBFCs in India, consider the following statements:

1. NBFCs are regulated by the Reserve Bank of India under the RBI Act, 1934.
2. NBFCs cannot accept demand deposits.
3. NBFCs cannot issue cheques drawn on themselves and are not part of the payment and settlement system.
4. NBFCs are licensed and regulated entirely by SEBI, not the RBI.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; NBFCs are licensed and regulated by the RBI, NOT SEBI.)

Q3. With reference to the Scale-Based Regulation (SBR) framework for NBFCs, consider the following statements:

1. The SBR framework classifies NBFCs into four layers: Base, Middle, Upper, and Top.
2. The NBFC-Upper Layer typically covers the top 25 to 30 NBFCs based on size, complexity, and risk.
3. The NBFC-Top Layer is currently empty and reserved for NBFCs that pose extreme systemic risk.
4. The SBR framework was introduced by SEBI in 2021.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the SBR framework was introduced by the RBI, NOT SEBI.)

Q4. With reference to specialised NBFC categories, consider the following statements:

1. NBFC-MFI (Microfinance Institution) provides micro loans to low-income borrowers.
2. NBFC-AA (Account Aggregator) is licensed to manage consent-based financial data sharing.
3. NBFC-P2P operates a peer-to-peer lending platform.
4. Housing Finance Companies (HFCs) are regulated by the SEBI since 2019.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; HFCs are regulated by the RBI since 2019, NOT by SEBI.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because cancellation of CoR means the NBFC cannot operate as an NBFC.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because NBFCs are licensed and regulated by the RBI, not SEBI.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the SBR framework was introduced by the RBI, not SEBI.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because HFCs are regulated by the RBI since 2019.

3. RBI Finalises Norms for Bank Lending to REITs and InvITs

Source: Business Standard

Context:

The Reserve Bank of India (RBI) has finalised amended norms for bank lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The new directions will be effective from 1 October 2026. The RBI has replaced the earlier draft proposal that required REITs/InvITs to complete three years of operations, with a cash-flow-based eligibility criterion, requiring at least 80 per cent of underlying assets to have generated positive operational cash flows for at least one year. The RBI has also allowed commercial banks to extend acquisition finance to REITs, bringing them on par with InvITs, while Small Finance Banks (SFBs) cannot extend acquisition finance to InvITs. The aggregate bank exposure cap of 49 per cent of a trust’s asset value has been retained.

The Key Change.

• Earlier draft: Required REITs/InvITs to complete 3 years of operations to be eligible for bank finance.
• Final norm: At least 80 per cent of underlying assets of a REIT or InvIT must have generated positive cash flows from operations for at least 1 year.
• This shifts the basis from age of the trust to the track record of underlying assets.

Risk Weights

• Exposures to REITs: To be treated as Commercial Real Estate (CRE) exposures with a risk weight of 100 per cent.
• If they qualify as Capital Market Exposures: Risk weight of 125 per cent.

Bank Exposure Limits

• Banks must set internal limits for their aggregate real estate exposure, with sub-limits for various subcategories.
• The sub-limit for REIT exposure is capped at a prudential ceiling of 10 per cent of the bank’s capital base.

Aggregate Bank Exposure to a Single Trust

• The combined exposure of all banks to a REIT or InvIT and its SPVs and holding companies cannot exceed 49 per cent of the value of the trust’s assets.
• Lenders may use either the latest annual valuation or the latest half-yearly valuation of assets, whichever is more recent, to determine compliance.

What is a REIT?

• A Real Estate Investment Trust (REIT) is a company or trust that owns, operates, or finances income-generating real estate.
• It collects funds from many investors, invests in rent-generating commercial properties like offices, malls, hotels, and shares rental income with investors as dividends or distributions.
• Regulated by SEBI under the SEBI (REIT) Regulations, 2014.
• In India, listed REITs include Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India REIT, Nexus Select Trust, and others.

What is an InvIT?

• An Infrastructure Investment Trust (InvIT) is a company or trust that owns and operates income-generating infrastructure assets, like roads, power transmission lines, airports, pipelines, telecom towers, renewable energy projects.
• Regulated by SEBI under the SEBI (InvIT) Regulations, 2014.
• In India, listed InvITs include IRB InvIT, India Grid Trust, IndInfravit Trust, PowerGrid InvIT, Bharat Highways InvIT, and others.

Why Are These RBI Norms Important?

• REITs and InvITs are growing fast in India.
• Banks are an important source of funding, both direct loans and acquisition finance.
• The new norms:
  • Ensure that bank lending is backed by stable, cash-generating assets.
  • Prevent overconcentration of bank lending to one trust or its SPVs.
  • Bring REITs and InvITs on par in acquisition finance options.
  • Strengthen financial stability.
• They also help maintain confidence in REITs and InvITs as a mature asset class.

Practice MCQs

Q1. With reference to the RBI’s final norms on bank lending to REITs and InvITs, consider the following statements:

1. The norms come into effect from 1 October 2026.
2. At least 80 per cent of underlying assets of a REIT or InvIT must have generated positive operational cash flows for at least 1 year.
3. The aggregate bank exposure to a single REIT or InvIT and its SPVs/holding companies cannot exceed 49 per cent of the trust’s asset value.
4. The earlier draft proposal that required REITs/InvITs to complete 3 years of operations has been retained in the final norms.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the 3-year operations requirement was dropped in favour of a cash-flow-based test.)

Q2. With reference to risk weights and exposure limits under the new norms, consider the following statements:

1. Bank exposures to REITs will generally be treated as Commercial Real Estate (CRE) exposures, with a risk weight of 100 per cent.
2. If such exposures qualify as Capital Market Exposures, the risk weight will be 125 per cent.
3. The sub-limit for a bank’s aggregate exposure to REITs is subject to a prudential ceiling of 10 per cent of the bank’s capital base.
4. The RBI has removed all internal exposure limits and prudential ceilings for banks lending to REITs and InvITs.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; the RBI has retained internal exposure limits and a prudential ceiling.)

Q3. With reference to REITs and InvITs in India, consider the following statements:

1. REITs and InvITs are regulated by SEBI under separate regulations issued in 2014.
2. REITs typically own and operate income-generating real estate like offices, malls, and hotels.
3. InvITs own and operate income-generating infrastructure assets like roads, power transmission lines, and pipelines.
4. REITs and InvITs are regulated by the Reserve Bank of India under the Banking Regulation Act, 1949.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; REITs and InvITs are regulated by SEBI, NOT by the RBI under the Banking Regulation Act.)

Q4. With reference to specific provisions of the new RBI norms, consider the following statements:

1. Commercial banks can now extend acquisition finance to REITs, bringing them on par with InvITs.
2. Small Finance Banks (SFBs) cannot extend acquisition finance to InvITs.
3. Restrictions on bullet-and-balloon repayment structures are retained for bank loans to REITs and InvITs.
4. The RBI has allowed land financing through REITs and InvITs as part of the new norms.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the RBI did not accept requests to permit land financing through REITs and InvITs.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the 3-year operations requirement was dropped in favour of a cash-flow-based test.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI has retained internal exposure limits and a prudential ceiling.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because REITs and InvITs are regulated by SEBI, not the RBI.
4. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the RBI did not allow land financing through REITs and InvITs.

4. EAC-PM Paper Flags Regional Imbalances in Priority Sector Lending

Source: BS

Context:

A recent working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) has flagged sharp regional imbalances in Priority Sector Lending (PSL) in India. Using district-level quarterly data from 2020 to 2025 covering over 95 per cent of scheduled commercial bank credit, the study finds that fewer than 10 per cent of districts account for over 45 per cent of PSL advances. Districts with the lowest existing PSL penetration show the weakest economic response to additional lending, suggesting that infrastructure, connectivity, and administrative capacity matter as much as credit. The editorial argues for a periodic recalibration of the PSL framework, including more use of PSLCs, bank specialisation, and district-level targeting.

The Big Imbalance

• Fewer than 10 per cent of districts account for over 45 per cent of all PSL advances.
• Credit is concentrated in relatively developed states and urbanised districts.
• Eastern India, the Northeast, and Himalayan regions are largely underserved.
• Lowest PSL penetration districts show the weakest economic response to additional lending.

What the EAC-PM Paper Recommends

• Strengthen market-based instruments like PSLCs.
• Allow banks to specialise in terms of comparative strength.
• Improve district-level targeting of PSL.
• Combine credit expansion with investment in infrastructure and institutional capacity.
• Periodically review PSL targets and sub-targets to reflect a changing economy.

What is Priority Sector Lending (PSL)?

• A regulatory mandate by the RBI that requires banks to allocate a certain percentage of their adjusted net bank credit (ANBC) to specific sectors considered important for inclusive growth.
• Aimed at:
  • Agriculture and allied activities.
  • MSMEs.
  • Education.
  • Housing for the weaker sections.
  • Social infrastructure.
  • Renewable energy.
  • Export credit (in some cases).
  • Weaker sections of society.

PSL Targets by Bank Type (Locked-in Numbers)

• Domestic Commercial Banks and Foreign Banks with 20+ branches: 40 per cent of ANBC.
• Regional Rural Banks (RRBs): 75 per cent of ANBC.
• Small Finance Banks (SFBs): 60 per cent of ANBC.
• Foreign Banks with less than 20 branches: 40 per cent of ANBC.
• Urban Co-operative Banks (UCBs): 60 per cent of ANBC.

Key Sub-Targets within PSL

• Agriculture: 18 per cent of ANBC (with 10 per cent for Small and Marginal Farmers).
• Micro Enterprises: 7.5 per cent of ANBC.
• Weaker Sections: 12 per cent of ANBC.

What is a Priority Sector Lending Certificate (PSLC)?

• A market-based instrument that allows banks to buy and sell PSL obligations.
• Banks with surplus PSL lending can sell PSLCs.
• Banks falling short of PSL targets can buy PSLCs to comply.
• Four PSLC categories: Agriculture, Small and Marginal Farmers, Micro Enterprises, and General.
• Introduced based on the recommendations of the Raghuram Rajan Committee, 2008.

What is the Rural Infrastructure Development Fund (RIDF)?

• A fund maintained by NABARD, set up in 1995-96.
• Receives contributions from banks that fall short of PSL targets, especially in agriculture and weaker sections.
• The fund is used to finance rural infrastructure like rural roads, bridges, irrigation, watershed development, social-sector infrastructure, and rural schools.
• Acts as a buffer mechanism for PSL shortfalls.

What is the EAC-PM?

• The Economic Advisory Council to the Prime Minister (EAC-PM) is an independent body.
• It advises the PM on economic issues, including growth, monetary policy, public finance, employment, social welfare, and competitiveness.
• It produces policy papers, working papers, and reviews on important economic themes.

Practice MCQs

Q1. With reference to the EAC-PM working paper on Priority Sector Lending (PSL), consider the following statements:

1. Fewer than 10 per cent of districts account for over 45 per cent of all PSL advances.
2. PSL credit is heavily concentrated in relatively developed states and urbanised districts.
3. Districts with the lowest existing PSL penetration show the weakest economic response to additional lending.
4. The EAC-PM working paper recommends abolishing the PSL framework altogether.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the EAC-PM paper recommends recalibrating the PSL framework, NOT abolishing it.)

Q2. With reference to the institutional differences in PSL delivery in India, consider the following statements:

1. Small Finance Banks (SFBs) on average extended close to 100 per cent of their ANBC directly to priority sectors during the study period.
2. State Bank of India’s direct PSL exposure was around 26.5 per cent, with greater reliance on PSLCs.
3. Banks falling short of PSL targets contribute to NABARD’s Rural Infrastructure Development Fund (RIDF).
4. Private banks depended more heavily on direct lending and less on market-based PSL compliance mechanisms.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; private banks depended more heavily on market-based PSL compliance mechanisms like PSLCs, NOT direct lending.)

Q3. With reference to PSL targets in India, consider the following statements:

1. Domestic commercial banks and foreign banks with 20+ branches have a PSL target of 40 per cent of ANBC.
2. Regional Rural Banks (RRBs) have a PSL target of 75 per cent of ANBC.
3. Small Finance Banks (SFBs) have a PSL target of 60 per cent of ANBC.
4. Urban Co-operative Banks (UCBs) have a PSL target of 90 per cent of ANBC.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; UCBs have a PSL target of 60 per cent, NOT 90 per cent.)

Q4. With reference to PSL components and reforms, consider the following statements:

1. Agriculture’s sub-target under PSL is 18 per cent of ANBC, including 10 per cent for Small and Marginal Farmers.
2. The Weaker Sections sub-target under PSL is 12 per cent of ANBC.
3. In 2025-26, micro and small enterprises overtook agriculture as the single-largest component of PSL.
4. PSLCs were introduced based on the recommendations of the Raghuram Rajan Committee on Financial Sector Reforms (2008).

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the EAC-PM paper recommends recalibrating the PSL framework, not abolishing it.
2. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because private banks depended more on PSLC-based compliance, not direct lending.
3. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because UCBs have a PSL target of 60 per cent, not 90 per cent.
4. (d), All four statements are correct.

5. SEBI Proposes Overhaul of Executive Remuneration Disclosures by Mutual Fund AMCs

Source: Business Standard

Context

The Securities and Exchange Board of India (SEBI) has proposed a significant overhaul of executive remuneration disclosures by mutual fund Asset Management Companies (AMCs). The consultation paper, released on Tuesday, proposes replacing individual, name-wise disclosures with consolidated compensation data. The move follows industry concerns about privacy, data protection, and limited investor relevance of individual disclosures. SEBI has also said its analysis shows that the employees covered under the current disclosure norms are only a small proportion of the overall AMC workforce. Public comments on the proposal are open until 30 June 2026. However, legal experts have cautioned that this could weaken an important governance tool.

The Current Disclosure Framework (Existing Norms)

• AMCs must disclose the names, designations, and remuneration of:
  • Chief Executive Officer (CEO).
  • Chief Investment Officer (CIO).
  • Chief Operating Officer (COO).
  • Top 10 employees by pay.
  • All employees earning above prescribed remuneration thresholds.

The Proposed Overhaul (New Norms)

• Replace individual name-wise disclosures with consolidated remuneration figures and employee counts across categories.
• Disclose aggregate remuneration paid to:
  • Senior executives.
  • Top-paid employees.
  • Employees crossing salary thresholds.
• Disclose the number of employees under each category.

What is an Asset Management Company (AMC)?

• A company that manages mutual fund schemes on behalf of investors.
• Approved and regulated by SEBI under the SEBI (Mutual Funds) Regulations, 1996.
• Major Indian AMCs include SBI Mutual Fund, HDFC AMC, ICICI Prudential AMC, Nippon Life India AMC, Aditya Birla Sun Life AMC, Kotak Mahindra AMC, Axis AMC, and many more.

What is a Mutual Fund?

• A collective investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, money market instruments, and other securities.
• Schemes include equity, debt, hybrid, index, ELSS, sectoral, ETF, FoF, and so on.
• Each scheme is managed by a fund manager under the AMC.
• Investors hold units that reflect their share of the portfolio.

The Mutual Fund Structure in India

• Sponsor: Sets up the mutual fund, like a promoter.
• Trustees: Hold the fund’s assets in trust for investors and oversee the AMC.
• AMC: Manages the fund and its schemes.
• Custodian: Holds the securities of the mutual fund.
• Registrar and Transfer Agent (RTA): Maintains investor records and transactions.
• Regulator: SEBI under the SEBI (Mutual Funds) Regulations, 1996.

Practice MCQs

Q1. With reference to SEBI’s proposed overhaul of executive remuneration disclosures by mutual fund AMCs, consider the following statements:

1. The proposal replaces individual name-wise disclosures with consolidated remuneration figures and employee counts.
2. The proposal makes scheme-level fund manager remuneration available only on request to investors in that scheme.
3. The proposal is open for public comments until 30 June 2026.
4. The proposal continues to require name-wise disclosure of remuneration for the CEO, CIO, and COO of all AMCs.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; the proposal replaces name-wise disclosure with consolidated remuneration data.)

Q2. With reference to mutual fund structure in India, consider the following statements:

1. The sponsor is the promoter who sets up the mutual fund.
2. The trustees hold the fund’s assets in trust for investors and oversee the AMC.
3. The AMC is the entity that manages the mutual fund’s schemes.
4. The Reserve Bank of India is the regulator of mutual funds in India.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; mutual funds are regulated by SEBI, NOT the RBI.)

Q3. With reference to investment vehicles regulated by SEBI, consider the following statements:

1. Portfolio Management Services (PMS) in India typically require a minimum investment of ₹50 lakh.
2. Alternative Investment Funds (AIFs) have three categories under SEBI regulations.
3. PMS and AIFs are not subject to mutual fund-style individual remuneration disclosure norms.
4. Mutual funds, PMS, and AIFs are all regulated by IRDAI in India.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

(Statement 4 is wrong; mutual funds, PMS, and AIFs are all regulated by SEBI, NOT IRDAI.)

Q4. With reference to the governance debate raised in the editorial, consider the following statements:

1. SEBI argues that the current disclosure framework covers only a small proportion of AMC employees.
2. AMCs argue that public disclosure of individual remuneration could place them at a disadvantage in competing for talent with PMS and AIFs.
3. Legal experts caution that reducing individual disclosures could weaken an important governance accountability tool.
4. The government has officially banned all forms of executive remuneration disclosure in India.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; executive remuneration disclosure is not banned in India; it is partly being recalibrated for AMCs.)

Answer Key

1. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because the proposal replaces name-wise disclosure with consolidated data.
2. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because mutual funds are regulated by SEBI, not the RBI.
3. (c), Statements 1, 2, 3 are correct; Statement 4 is wrong because mutual funds, PMS, and AIFs are all regulated by SEBI, not IRDAI.
4. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because executive remuneration disclosure is not banned in India.

Agriculture

1. Chhattisgarh CM Vishnu Deo Sai’s Village Visits

Source: Indian Express

Context

Chhattisgarh Chief Minister Vishnu Deo Sai has been undertaking unannounced village visits under the Sushasan Tihar 2026 (Good Governance Festival) initiative, where villagers approach him with development requests. As reported by the Indian Express, requests across districts have included GI tags for local rice varieties, irrigation projects, and welfare items like sewing machines. The visits combine direct community interaction, on-the-spot decisions, and ground-level inspection of schemes like the Pradhan Mantri Awas Yojana, Mahtari Vandan Yojana, Krishak Unnati Yojana, and the SAMRIDHI-M-CAD irrigation scheme.

The Initiative

• Initiative name: Sushasan Tihar 2026 (Good Governance Festival).
• Format: Unannounced visits by the CM to villages across Chhattisgarh.
• Approach: Real-time governance, on-the-spot decision-making, and ground-level verification.

Examples of Schemes Reaching the Ground

• Pradhan Mantri Awas Yojana (PMAY) housing.
• Mahtari Vandan Yojana (Chhattisgarh’s women’s welfare cash transfer scheme).
• Krishak Unnati Yojana (Chhattisgarh’s farmer income support scheme).
• SAMRIDHI-M-CAD (Modernisation of Command Area Development) for irrigation, launched in April 2025 under the Union Ministry of Jal Shakti.

What is a GI Tag?

• A Geographical Indication (GI) is a sign used on products with a specific geographical origin, possessing qualities or a reputation due to that origin.
• Recognised under the Geographical Indications of Goods (Registration and Protection) Act, 1999.
• Administered by the Office of the Controller General of Patents, Designs and Trademarks under the Department for Promotion of Industry and Internal Trade (DPIIT).
• India has registered about 700+ GI tags so far.
• Examples include Darjeeling Tea, Basmati Rice, Kanchipuram Silk, Mysore Silk, Banarasi Saree, Chanderi Sarees, Pochampally Ikat, Madhubani Paintings, Mithila Makhana, Chak-Hao Black Rice, and many more.

Existing Rice GI Tags in India

• Basmati Rice (multiple states in the IGP region).
• Pokkali Rice (Kerala).
• Wayanad Jeerakasala Rice (Kerala).
• Wayanad Gandhakasala Rice (Kerala).
• Kaipad Rice (Kerala).
• Navara Rice (Kerala).
• Palakkadan Matta Rice (Kerala).
• Joha Rice (Assam).
• Boka Chaul (Assam).
• Chokuwa Rice (Assam).
• Katarni Rice (Bihar).
• Marcha Rice (Bihar).
• Chak-Hao Black Rice (Manipur).
• Bhopal Sharbati Rice (Madhya Pradesh).

What is SAMRIDHI-M-CAD?

• Modernisation of Command Area Development and Water Management Programme.
• Launched in April 2025 under the Union Ministry of Jal Shakti.
• Aims to modernise irrigation infrastructure with pressurised irrigation, micro-irrigation, GIS-based water budgeting, and Water Users’ Committee management.
• Targets water-use efficiency, in line with the “more crop per drop” vision.

What is Mahtari Vandan Yojana?

• A flagship scheme of the Chhattisgarh Government under CM Vishnu Deo Sai.
• Provides monthly cash transfers to married women in the state (about ₹1,000 per month).
• A fiscal transfer aimed at women’s economic empowerment.

What is Krishak Unnati Yojana?

• A scheme that provides additional income support to farmers in Chhattisgarh, on top of the MSP.
• Designed to address farm income volatility and boost agricultural livelihoods.

Practice MCQs

Q1. With reference to the Geographical Indication (GI) tag system in India, consider the following statements:

1. GI tags are governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999.
2. The GI Registry is administered by the DPIIT under the Ministry of Commerce and Industry.
3. India has registered about 700+ GI tags so far.
4. Darjeeling Tea was India’s first registered GI product.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to existing rice GI tags in India, consider the following statements:

1. Chak-Hao Black Rice is a GI-tagged rice from Manipur.
2. Pokkali Rice, Navara Rice, and Palakkadan Matta Rice are GI-tagged rice varieties from Kerala.
3. Joha Rice and Boka Chaul are GI-tagged rice varieties from Assam.
4. Marcha Rice and Katarni Rice are GI-tagged rice varieties from Bihar.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Q3. With reference to the SAMRIDHI-M-CAD scheme and lift irrigation projects, consider the following statements:

1. SAMRIDHI-M-CAD is a Central scheme under the Ministry of Jal Shakti for the modernisation of command area development.
2. It was launched in April 2025.
3. The Bagia lift irrigation project in Jashpur, Chhattisgarh, will cover about 4,933 hectares of land across 13 villages.
4. SAMRIDHI-M-CAD is implemented by the Ministry of Defence.

Which of the above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2 and 4 only (d) 1 and 4 only (e) All four

(Statement 4 is wrong; SAMRIDHI-M-CAD is implemented by the Ministry of Jal Shakti, NOT the Ministry of Defence.)

Q4. With reference to Chhattisgarh, consider the following statements:

1. Chhattisgarh was carved out of Madhya Pradesh on 1 November 2000.
2. The state is often called the “Rice Bowl of India” because of its rich heritage of traditional rice varieties.
3. Tribals form a significant portion of Chhattisgarh’s population, including communities like Gond, Halba, Kanwar, Baiga, and Korwa.
4. Vishnu Deo Sai became the Chief Minister of Chhattisgarh in December 2023, succeeding Bhupesh Baghel.

How many of the above statements are correct?

(a) Only one (b) Only two (c) Only three (d) All four (e) None

Answer Key

1. (d), All four statements are correct.
2. (d), All four statements are correct.
3. (a), Statements 1, 2, 3 are correct; Statement 4 is wrong because SAMRIDHI-M-CAD is implemented by the Ministry of Jal Shakti.
4. (d), All four statements are correct.

Exam Relevance

NABARD Grade A

Very high importance, irrigation, agriculture, GI tags, rural welfare

Facts To Remember

1. India Ranks 2nd Globally in FIFA World Cup Content Consumption

As the FIFA World Cup 2026 unfolds (jointly hosted by the USA, Canada, and Mexico), Indian brands are tapping into the global soccer showpiece for consumer mindshare. Data from Taboola, a performance advertising platform, ranks India as the second-most engaged market globally, after the US, for World Cup related content consumption, with 9.7 million page-views over the past 90 days.

2. CCEA Approves ₹24,249 Crore National Highway Projects Across Four States

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved four major National Highway projects worth ₹24,249 crore across Odisha, Telangana, Bihar, and Madhya Pradesh. Covering more than 700 km, the projects aim to improve regional connectivity, reduce travel time, ease congestion, and strengthen logistics infrastructure under the PM GatiShakti National Master Plan.

3. India Joins Anthropic’s Project Glasswing for Advanced Cybersecurity

India joined Anthropic’s Project Glasswing, a global cybersecurity initiative that provides access to Claude Mythos AI, an advanced artificial intelligence system designed to identify software vulnerabilities and strengthen cyber defence capabilities. The initiative aims to enhance the protection of critical digital infrastructure and improve cybersecurity resilience.

4. India–UK Critical Minerals Supply Chain Observatory Launched

Union Minister G. Kishan Reddy and UK Foreign Secretary Yvette Cooper jointly launched the India–UK Critical Minerals Global Supply Chain Observatory in New Delhi. The initiative seeks to strengthen cooperation in critical minerals, support clean energy transitions, improve supply chain resilience, and promote evidence-based policymaking.

5. PFRDA Launches ‘StAR NPS’ Digital Onboarding Platform

The Pension Fund Regulatory and Development Authority (PFRDA) launched the StAR NPS platform to simplify and streamline subscriber onboarding for the National Pension System (NPS). PFRDA also introduced a Regulatory Sandbox Framework to encourage innovation and controlled testing of new pension-sector solutions.

6. ANRF-Backed Research and Innovation Portal Announced

Union Minister Dr. Jitendra Singh announced a new digital portal supported by the Anusandhan National Research Foundation (ANRF) to strengthen India’s research and innovation ecosystem. The platform will provide support for scientific writing, patent filing, intellectual property protection, and research publication processes.

7. 17 Projects Selected for National Awards for e-Governance 2026

The Department of Administrative Reforms and Public Grievances selected 17 projects and initiatives for the National Awards for e-Governance (NAeG) 2026. The awards recognize excellence in digital governance, innovation, and technology-enabled public service delivery across government institutions and local bodies.

8. Major Prabhat Mishra Wins Two Prestigious US Military Awards

Major Prabhat Mishra of the Indian Army received the Birrer-Brookes Award and the General Douglas MacArthur Military Leadership Writing Award at the United States Army Command and General Staff College. He became the first Indian officer to win both honours simultaneously.

9. Neelkanth Mishra Appointed Executive Director of the World Bank

The Appointments Committee of the Cabinet approved the appointment of economist Neelkanth Mishra as Executive Director of the World Bank for a three-year term. He currently serves as Chief Economist at Axis Bank and has extensive experience in global economic research.

10. SoftBank Sells 3.25% Stake in Lenskart

SoftBank Group sold a 3.25% stake in Lenskart Solutions through an open market transaction worth ₹2,873 crore. The transaction reduced SoftBank’s shareholding in the eyewear company while generating substantial returns on its investment.

11. India’s First Flex-Fuel Passenger Vehicle Launched

Union Minister Hardeep Singh Puri launched India’s first flex-fuel passenger vehicle, the Maruti Suzuki Wagon R Flex Fuel, capable of operating on ethanol-petrol blends ranging from E20 to E100. The launch supports India’s ethanol-based mobility and clean energy objectives.

12. KS Bharat Retires from International Cricket

Indian wicketkeeper-batter K. S. Bharat announced his retirement from international cricket after representing India in seven Test matches. He will now pursue opportunities in overseas T20 leagues.

13. Former Lok Sabha Secretary-General Subhash C. Kashyap Passes Away

Renowned constitutional expert, author, and former Lok Sabha Secretary-General Subhash C. Kashyap passed away at the age of 97. He was widely respected for his contributions to parliamentary affairs, constitutional studies, and democratic governance.

14. Former CBFC Chairman Pahlaj Nihalani Passes Away

Veteran film producer and former Central Board of Film Certification (CBFC) Chairman Pahlaj Nihalani passed away at the age of 76. He was known for producing several successful Bollywood films and for his leadership in the Indian film industry.

15. International Day for the Fight Against IUU Fishing Observed

The International Day for the Fight Against Illegal, Unreported and Unregulated (IUU) Fishing was observed on 5 June 2026. The day highlights the need to combat illegal fishing practices and promote sustainable marine resource management.

16. International Level Crossing Awareness Day 2026 Observed

International Level Crossing Awareness Day (ILCAD) was observed on 5 June 2026 with the theme “Alert Today, Safe Tomorrow.” The observance promotes awareness about railway crossing safety and encourages responsible road-user behaviour.

17. Tamil Nadu Signs ₹18,600 Crore Investment Pact with L&T

The Government of Tamil Nadu signed an MoU with Larsen & Toubro (L&T) for investments worth ₹18,600 crore across data centres, electronics manufacturing, and shipyard expansion projects. The investments are expected to generate significant employment and strengthen industrial growth in the state.