Daily Current Affairs Quiz
30 September, 2025

National Affairs

1. India’s Industrial Growth Slows to 4% in August 2025

Source: Mint

Context

India’s industrial output, measured by the Index of Industrial Production (IIP), grew 4% in August 2025, easing slightly from July’s upwardly revised 4.3% growth. The slowdown was led by weaker manufacturing activity, despite a recovery in mining and electricity.

Key Highlights:

Policy & Market Factors:

• GST Council’s sharp tax rate cuts on autos, textiles, packaged foods, kitchenware, and services (life & health insurance, restaurants) announced in Sept 2025 as a “GST savings festival” are expected to stimulate demand.
• Analysts highlight strong rural demand from good monsoon, kharif sowing, and benign inflation, while urban demand is supported by lower lending rates, income tax relief, and GST cuts.
• Risks: Weak global demand, US tariffs on India (50%), and excess rains impacting agriculture.

2. India Adds Two New Ramsar Sites in Bihar

Source: PIB

Context

India has designated two new wetlands in Bihar Gokul Jalashay (Buxar) and Udaipur Jheel (West Champaran) as Ramsar sites, raising the national tally to 93 wetlands of international importance. With this, India retains its top position in Asia for the number of Ramsar sites.

Key Highlights:

Gokul Jalashay (Buxar, 448 ha):

• Oxbow lake on the southern edge of the Ganga River.
• Acts as a flood buffer for nearby villages.
• Habitat for 50+ bird species.
• Supports fishing, irrigation, farming.
• Unique feature: community-led cleaning rituals by villagers every year.

Udaipur Jheel (West Champaran, 319 ha):

• Oxbow lake encircling a village.
• Rich in biodiversity: 280+ plant species, including endemic Alysicarpus roxburghianus.
• Important wintering ground for 35+ migratory birds, incl. vulnerable Common Pochard.

About Ramsar Sites

• Wetlands of international importance under the Ramsar Convention (1971).
• Objective: Promote conservation and sustainable use of wetlands.
• Origin: Signed in Ramsar, Iran (1971); came into force in 1975 under UNESCO.
• Functions:
  • Protects wetlands crucial for biodiversity, migratory birds, endangered species, flood control, water security, fisheries, and livelihoods.
  • Provides a framework for national action and international cooperation.

India’s Ramsar Sites – Current Status (Sept 2025)

• Total Sites: 93 (covering 13.6 lakh hectares).
• Growth: 26 (2012) → 93 (2025). Notably, 51 sites added since 2020.
• Global Standing:
  • India: 3rd largest number of Ramsar sites (after UK – 176, Mexico – 144).
  • Asia: Rank 1.
• Bihar: Now has 5 Ramsar sites after the latest additions.

3. Sahyog Portal

Context

The Karnataka High Court upheld the validity of the Union government’s Sahyog portal, which enables police and authorised agencies to send content takedown requests directly to social media platforms. X (formerly Twitter) had challenged this mechanism, arguing it amounted to censorship without judicial oversight.

What is the Sahyog Portal?

• The Sahyog portal is an online platform created by India’s Ministry of Home Affairs (MHA), maintained via the Indian Cyber Crime Coordination Centre (I4C).
• It was launched in October 2024 to automate and streamline the issuance of content takedown notices by government agencies, police, and other authorized bodies under Section 79(3)(b) of the Information Technology (IT) Act, 2000.
• The stated intent is to “expedite the process of sending notices to IT intermediaries” (social media platforms, ISPs, etc.) for removing or disabling access to content deemed “unlawful.”

How Sahyog Portal Works

• Nodal / authorized agencies issue takedown or removal notices via the portal to internet intermediaries.
• IT intermediaries receive notices and are required to act—either remove content or respond with reasons or request further evidence.
• The portal enables an integrated dashboard view so agencies can track action taken or non-compliance.
• Platforms can seek additional information or contest a notice in specific cases.
• The portal covers multiple agencies—central, state, police, ministries—and many intermediaries (e.g. Google, YouTube, Apple) have been onboarded.

4. NCRB Crime in India Report 2023

Source: IE

Context

The National Crime Records Bureau (NCRB) released its annual Crime in India 2023 report, revealing a significant rise in overall crime, a shift in crime patterns, and growing concerns over cybercrime and crimes against vulnerable sections.

Key Findings (Compared to 2022)

• Overall Crime:
  • Total: 6.24 million cases (↑7.2%).
  • Crime rate: 448.3 per lakh population (vs. 422.2 in 2022).
  • A crime every 5 seconds in India.
• Changing Pattern:
  • Decline in traditional violent crimes like rape and dowry deaths.
  • Surge in cybercrime and urban crimes.
• Cybercrime:
  • ↑ 31.2% in 2023.
  • Majority linked to fraud (68.9%), followed by sexual exploitation and extortion.
  • Reflects risks of rapid digitalization without adequate cyber hygiene.
• Metropolitan Cities:
  • Overall crime ↑ 10.6%.
  • Delhi reported the highest number of cases.
  • Indicates both urban pressures and improved reporting mechanisms.
• Crimes Against Vulnerable Sections:
  • Women: ↑ 0.7%.
    • Domestic cruelty = 29.8% of total cases.
  • Scheduled Castes (SCs): Marginal increase.
  • Scheduled Tribes (STs): ↑ 28.8%, mainly due to ethnic violence in Manipur.
  • Children: ↑ 9.2%.
    • Large share under POCSO Act, indicating both vulnerability and better reporting.

About NCRB

• Established: 1986 (based on Tandon Committee, National Police Commission 1977-81, and MHA Task Force 1985).
• Ministry: Ministry of Home Affairs (MHA).
• Functions:
  • Repository of crime and criminal data.
  • Coordinates CCTNS (Crime and Criminal Tracking Network & Systems).
  • Publishes national crime statistics:
    • Crime in India
    • Accidental Deaths & Suicides
    • Prison Statistics

Banking and Finance

1. RBI Revised Liquidity Management Framework

Source: BS

Context

The Reserve Bank of India (RBI) has retained the overnight weighted average call rate (WACR) as the operating target of monetary policy, under a revised liquidity management framework, ahead of its upcoming monetary policy decision.

Key Announcements:

• The overnight Weighted Average Call Rate (WACR) remains the operating target of India’s monetary policy.
• Purpose: Align short-term money market rates with the policy repo rate for smooth transmission of monetary policy.

Changes in Operational Tools

• 14-day Variable Rate Repo (VRR) and Variable Rate Reverse Repo (VRRR) will be discontinued as primary liquidity management tools.
• They will be replaced primarily by 7-day liquidity operations, with additional operations ranging from overnight to 14 days depending on liquidity conditions.
• All existing instruments for durable liquidity management—like Open Market Operations (OMOs), long-term variable rate repos/reverse repos, and forex swap auctions—will continue.

Policy Corridor

• The symmetric corridor around the policy repo rate is retained:
  • Repo Rate: Midpoint
  • Standing Deposit Facility (SDF): Floor (25 bps below repo)
  • Marginal Standing Facility (MSF): Ceiling (25 bps above repo)
• Banks’ access: Standalone primary dealers retain access to SDF, overnight reverse repo, and all repo operations.

Liquidity Alignment & Transparency

• RBI aims to keep WACR close to the policy repo rate by maintaining optimal liquidity.
• Advance notice of at least one day will be given regarding tenor, quantum, and timing of liquidity operations, except in exceptional circumstances.

Cash Reserve Ratio (CRR)

• Banks must maintain at least 90% of prescribed CRR daily.

Key Definitions

2. RBI Revises Guidelines for Small Business Loans

Source: BS

Context

The Reserve Bank of India (RBI) has announced new guidelines for small business loans, giving banks greater flexibility in adjusting the additional interest or spread charged over the loan term. Previously, banks could revise the spread linked to a borrower’s credit risk only once every three years.

Key Highlights:

Greater Flexibility in Loan Spreads

• Previous rule: Banks could revise the spread (additional interest over the base rate linked to borrower credit risk) only once every three years.
• New rule: Banks can now reduce other spread components earlier, benefiting borrowers.
• Additional option: Borrowers can switch to a fixed-rate loan at the time of reset.

Expanded Lending Using Gold

• Earlier restriction: Banks could not provide loans for purchasing gold/silver, except working capital loans to jewellers.
• New provision: Banks can now extend working capital loans to any business using gold as a raw material, broadening credit access beyond the jewellery sector.

Other Directions for Strengthening Lending

• Seven directions issued:
  • Three mandatory
  • Four open for consultation (feedback until October 20, 2025)
• Key measures:
  1. Expanded role of smaller urban co-operative banks in lending to enhance financial inclusion.
  2. Capital rules eased: Banks can use foreign-currency and overseas-rupee bonds as Additional Tier 1 (AT1) capital, facilitating access to global markets.
  3. Faster credit reporting: Data submissions will move from fortnightly to weekly, integrating unique CKYC identifiers for more accurate and timely reporting.

Key Definitions

3. Moody’s Affirms India’s Sovereign Rating

Source: FE

Context

Moody’s Ratings affirmed Government of India’s long-term local and foreign-currency issuer ratings at Baa3 (lowest investment grade). The outlook remains stable.

Key Rating Decisions:

• Long-term issuer ratings (local & foreign currency): Baa3 (affirmed).
• Local-currency senior unsecured rating: Baa3 (affirmed).
• Short-term local-currency rating: P-3 (affirmed).
• Local-currency (LC) bond ceiling: A2 (unchanged).
• Outlook: Stable.

Rationale Behind Rating:

Exam-Oriented Points:

• Baa3: Lowest investment grade rating (still investment grade, not junk).
• P-3: Short-term rating indicating “adequate ability” to meet obligations.
• Local-currency bond ceiling A2: Higher than sovereign rating, indicates scope for stronger performance of domestic borrowers relative to government.
• Peer Context: India remains investment-grade with all three major agencies — S&P (BBB-), Fitch (BBB-), Moody’s (Baa3).

4. Sebi Bars Man Industries & Top Executives Over Fund Diversion

Source: BS

Context

India's market regulator barred Man Industries and three of its top executives, including the chairman, from accessing the securities markets for two years over alleged fund diversion, according to an order issued.

Reason for Action:

• Diversion of funds to subsidiaries.
• Misrepresentation of financial statements by not consolidating subsidiary accounts.
• Non-disclosure of related-party transactions.
• Rotation of funds and failure to disclose material events.

SEBI Guidelines on Misuse of Funds

5. RBI Warns NBFCs Against Aggressive Business Growth

Context

The Reserve Bank of India (RBI) has cautioned NBFCs, Microfinance Institutions (MFIs), and Housing Finance Companies (HFCs) against aggressive expansion without strong risk management frameworks and sustainable business practices.

Key Highlights:

• Concern raised over high return-on-equity chasing, leading to excessive interest rates, high processing fees, and penalties—posing risks to financial stability.
• RBI urged NBFCs to:
  • Adopt a compliance-first culture.
  • Follow Fair Practices Codes strictly.
  • Address customer grievances effectively.
  • Review compensation and incentive structures to prevent poor service and unethical practices.

Significance:

• Ensures prudent lending and risk management.
• Protects financial stability and consumer interests.
• Encourages responsible growth in the NBFC sector.

6. India Phasing in Secured Overnight Rupee Rate (SORR) to Replace MIBOR

Source: BL

Context

India is revamping its key financial benchmark system to replace the Mumbai Interbank Outright Rate (MIBOR) with the Secured Overnight Rupee Rate (SORR), aligning with global trends away from unsecured interbank rates like Libor.

Key Highlights:

• SORR Introduction:
  • SORR is a secured overnight borrowing rate, based on repurchase (repo) market transactions backed by securities such as government bonds.
  • Unlike MIBOR, which is derived from a small unsecured interbank market, SORR reflects broader market liquidity including mutual funds and non-bank participants.
• Need for Transition:
  • MIBOR underpins ~$1 trillion in interest-rate swaps but is based on only ~2% of the funding market.
  • Secured rates provide a more accurate reflection of borrowing costs, improving transparency for derivatives, consumer loans, and hedging instruments.
• Benefits:
  • Provides a robust benchmark for domestic and foreign investors.
  • Facilitates foreign participation in India’s debt markets by improving hedging and risk management.
  • Average SORR has been ~10 basis points lower than MIBOR since July 2025.
• Challenges:
  • Transition requires banks to manage legacy contracts and new trades, similar to the global Libor transition.
  • Timeline for full adoption is not yet announced, dependent on liquidity in SORR-linked swaps market.
  • Potential risks for derivative pricing if MIBOR-linked contracts are not properly adjusted.
• Global Context:
  • Mirrors global trends such as the SOFR (Secured Overnight Financing Rate) adoption in the US, post-Libor.
  • India’s repo market now involves mutual funds, insurance companies, and banks, reflecting the evolving financial landscape.

MIBOR vs SORR

7. TATA AIG Partners with Equitas Small Finance Bank to Expand Insurance Access

Source: BL

Context

TATA AIG General Insurance Company Ltd has entered into a bancassurance partnership with Equitas Small Finance Bank to enhance the distribution of non-life insurance products, particularly in semi-urban and rural India.

Key Highlights:

• Nature of Partnership:
  • Customers of Equitas Bank can now purchase TATA AIG’s general insurance products through the bank’s network.
  • Products offered include motor, health, personal accident, travel, and other non-life insurance solutions.
• Focus Areas:
  • Emphasis on financial protection for households and small businesses in emerging markets.
  • Aims to increase insurance penetration in underserved semi-urban and rural regions.

Agriculture

1. Arya.ag Wins SmartAG Award 2025

Source: BL

Context

Arya.ag, an integrated grain commerce platform, has been recognized with the SmartAG Award 2025 for its solutions promoting climate resilience and sustainable agriculture for smallholder farmers.

About SmartAG Award:

• Organized by responsAbility, a global impact asset manager focusing on private market investments aligned with UN Sustainable Development Goals (SDGs).
• Highlights innovative, scalable agriculture and food system solutions that enhance climate resilience, sustainability, and inclusion.

Arya.ag’s Winning Initiative

Smart Farm Centre Model:

• Core of Arya.ag’s award-winning solution.
• Integrates climate-smart technologies, economic resilience measures, and sustainable practices.
• Features the in-house developed AI-powered AryaQ grain quality device, helping assess and monitor grain quality efficiently.

Key Features:

• Operated by women community value chain resource persons.
• Provides smallholder farmers in climate-vulnerable regions with real-time access to advanced agri-tech services:
  • Soil testing
  • Drone-based spraying
  • Hyperlocal weather advisories
• Enables data-driven decisions to reduce waste, boost procurement efficiency, and allow quality-linked pricing.

Facts To Remember

1. Centre appoints RBI ED Murmu as Deputy Governor

The Appointments Committee of the Cabinet (ACC) has approved the appointment of Shirish Chandra Murmu, Executive Director, Reserve Bank of India (RBI), for the post of Deputy Governor, RBI, for a period of three years.

2. Rinku clinches gold with championship record

A day after his namesake won the Asia Cup in cricket for India, Rinku Singh went one further, setting a new championship record en route being crowned the world champion at the World Para Athletics Championships at the Jawaharlal Nehru Stadium.

3. Prabu wins gold; silver medals for Dewan and Tarushi

Nine-year-old Aaruthran Prabu won gold in the karting slalom cadet class while Aarav Dewan, a 15-year-old from Gurugram, and Chikmagaluru’s Tarushi Vikram, won a silver each in the FIA Asia-Pacific motorsport championship at Bandaragama (Sri Lanka).

4. Ojasvi powers India to a sweep of air rifle medals

Ojasvi Thakur led a sweep of air rifle medals for the host in the Junior World Cup at the Dr. Karni Singh Range, Tughlakabad.

5. Punjab farm groups oppose crackdown on stubble burning

Farmer bodies have begun opposing the crackdown on stubble burning in Punjab and demanded cash incentives for farmers to desist from the practice, in keeping with the 2019 SC directive on crop-residue management.

6. India inks pact to construct first-ever rail links with Bhutan

India and Bhutan signed an agreement Monday for construction of two cross-border railway lines, aimed at strengthening economic and people-topeople links between the two neighbouring nations.

7. Tata Capital’s ₹15,511 Crore IPO to be India’s Largest NBFC Listing

Tata Capital, the financial services arm of Tata Group, is launching its ₹15,511-crore Initial Public Offering (IPO), making it the largest-ever IPO by any Non-Banking Financial Company (NBFC) in India and Tata Group’s biggest IPO to date.

8. India bag gold and silver in men’s javelin throw

Two unfortunate accidents, which resulted in disability for life, didn’t deter India’s leading differently-abled javelin throwers Rinku Hooda and Sundar Singh Gurjar from achieving a momentous 1-2 for the country at the ongoing World Para Athletics Championships.

9. IVF to save a rhino: Mumbai filmmaker’s docu-series wins at Cannes

WHILE OTT watchers were smitten by direwolves on Game of Thrones and their de-extinction was underway, a few more species were in various stages of conservation, or being brought back from their vanishing turns.

10. Yogesh Khatuniya Wins Silver in Men’s Discus Throw F56 at World Para Athletics Championship

Yogesh Khatuniya has won silver at the World Para Athletics Championship.

11. Sidbi net profit rises by 19.5% to record high of ₹4,811 cr in FY25

Small Industries Development Bank of India (Sidbi) said its net profit rose by 19.5 per cent to hit an all-time high of Rs 4,811 crore in the 2024-25 financial year.

Read more>>

Daily Current Affairs Quiz
1 October, 2025

National Affairs

1. India–EFTA Trade and Economic Partnership Agreement (TEPA)

Source: News on Air

Context

The India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) came into effect on 1st October 2025. It is India’s first FTA with four developed European countries, promising $100 billion investments and 1 million jobs in the next 15 years.

About TEPA

• What it is?
  • A comprehensive Free Trade Agreement (FTA) between India and the European Free Trade Association (EFTA).
  • First Indian FTA linking trade, investment, and job creation.
• Signed on:
  • 10th March 2024 in New Delhi
• EFTA Members:
  • Switzerland (India’s largest EFTA trade partner)
  • Norway
  • Iceland
  • Liechtenstein

Key Features

2. Dugong Conservation in India

Source: IE

Context

The International Union for Conservation of Nature (IUCN) has recognised Tamil Nadu’s Dugong Conservation Reserve in Palk Bay as a global model for marine biodiversity conservation during the IUCN World Conservation Congress 2025.

Key Highlights:

• First Dugong Reserve of India: Declared in September 2022 under the Wildlife Protection Act, 1972.
• Location & Size: Spread over 448.34 sq. km in northern Palk Bay, Tamil Nadu; includes 12,250 hectares of seagrass meadows.
• IUCN Recognition: Motion proposed by Omcar Foundation, supported by 98% of countries/agencies and 94.8% NGOs/research bodies.
• Species Focus: Dugongs (Dugong dugon), listed as Vulnerable on the IUCN Red List.
• Ecological Role: Seagrass meadows provide feeding grounds, support biodiversity, and act as carbon sinks.

3. Female Labour Force Participation in India

Context

The Female Labour Force Participation Rate (FLFPR) measures the share of women who are employed or actively seeking work. While India’s FLFPR fell from 31.2% in 2011-12 to 23.3% in 2017-18, it rose sharply to 41.7% in 2023-24, driven mainly by rural women.

Female Labour Force Participation Rate (FLFPR)

• Female Labour Force Participation Rate (FLFPR) is the proportion of women (aged 15 years and above) who are either employed (working) or actively seeking employment.
• It is a key indicator of gender equality, economic inclusion, and social progress.

Key Highlights:

Banking and Finance

1. FPI Outflows from Indian Equities

Context

Foreign Portfolio Investors (FPIs) withdrew ₹23,885 crore from Indian stocks in September 2025, marking the third consecutive month of net outflows, according to NSDL data.

What are Foreign Portfolio Investors (FPIs)?

• FPIs are investors (institutions, hedge funds, individuals) registered with SEBI who invest in Indian financial assets like:
  • Stocks
  • Bonds
  • Mutual funds
• Investments are made in secondary markets and can be withdrawn quickly.

Characteristics

• Short-term & liquid investments.
• Highly sensitive to global interest rates, currency, and risk sentiment.
• Governed by SEBI FPI Regulations, 2019.

Impact of FPI Flows on Indian Market

• Outflows → Stock market correction, rupee depreciation, higher volatility.
• Inflows → Boost to equity valuations, liquidity, and investor confidence.
• FPIs hold ~16–18% of Indian market capitalization, making their flows crucial for market sentiment.

FPI vs FDI

2. ADB Downgrades India’s Growth Outlook for FY26

Source: TH

Context

The Asian Development Bank (ADB) has lowered India’s economic growth forecast for the current financial year (2025-26) to 6.5% from the earlier 6.7%, mainly due to the impact of 50% U.S. tariffs on imports from India. The growth outlook for 2026-27 has also been revised downward to 6.5% from 6.8%.

Key Highlights:

3. India’s Fiscal Deficit

Context

The Centre’s fiscal deficit for April–August 2025 stood at 38.1% of the full-year Budget Estimate (BE), as per data released by the Controller General of Accounts (CGA).

What is Fiscal Deficit?

• The shortfall between the government’s total expenditure and total revenue (excluding borrowings).
• Formula:
  Fiscal Deficit = Total Expenditure – (Revenue Receipts + Non-debt Capital Receipts)
• It shows how much the government needs to borrow to finance its expenditure.

What to Do When Fiscal Deficit Occurs?

Governments adopt a mix of short-term financing measures and long-term structural reforms:

Short-term Financing (Bridging the Gap)

• Borrowings: From domestic market (bonds, securities) or foreign sources.
• Disinvestment: Selling govt stake in PSUs to raise capital.
• Use of Reserves: Dividend transfers from RBI/PSUs.
• External Aid/Loans: From multilateral institutions (World Bank, ADB, AIIB).

Long-term Structural Measures

• Boost Revenue:
  • Widen tax base (GST, direct tax compliance).
  • Improve non-tax revenues (dividends, fees, spectrum auctions).
• Rationalise Expenditure:
  • Cut down subsidies/leakages.
  • Better targeting via DBT (Direct Benefit Transfer).
  • Prioritise productive capex over revenue expenditure.
• Reforms for Growth:
  • Encourage FDI, FPI, private investment.
  • Infrastructure push to boost GDP and tax collection.

Last Resort

• Monetisation of Deficit (RBI printing money) – Inflationary, avoided in normal times.

Types of Deficit

4. RBI Launches Scheme to Activate Inoperative Accounts and Settle Unclaimed Deposits

Source: News on Air

Context

The Reserve Bank of India (RBI) has launched a one-year incentive scheme (October 2025 – September 2026) to encourage banks to reactivate inoperative accounts and repay unclaimed deposits to rightful claimants.

What is an Inoperative Account?

• A bank savings/current account that has had no customer-initiated transactions for 2 years (as per RBI guidelines).
• Balance remains but account is inactive until reactivated by the customer.

Key Highlights:

• Incentives for Banks:
  • Banks will receive 5%–7.5% of amounts (up to ₹25,000) for:
    • Reactivating inoperative accounts.
    • Settling unclaimed deposits with legitimate owners.
  • Payouts are linked to:
    • Account age – older inoperative accounts may attract higher incentives.
    • Deposit size – larger unclaimed amounts may receive proportionate rewards.
• Objective:
  • Reduce the stock of dormant/inoperative accounts in the banking system.
  • Ensure depositors receive their rightful funds, improving customer trust in banks.

5. SEBI Seeks Disclosures on Promoters’ In-Laws and Related Entities

Source: TOI

Context

The Securities and Exchange Board of India (SEBI) has clarified that listed companies must disclose information about the relatives of promoters, including:

• Spouse’s parents
• Married children’s spouses and their parents
• Entities where these relatives hold over 20% shareholding, even if they do not own shares in the listed company

What is the New Proposal?

• Promoter-related disclosures to be expanded.
• Now, listed companies must also disclose relationships with:
  • Promoters’ in-laws (beyond immediate family).
  • Entities where such relatives hold beneficial interest or control.

Why is SEBI Doing This?

• Current loophole: Some promoters route money through relatives (like in-laws) or associated entities to avoid RPT scrutiny.
• SEBI wants to plug gaps and ensure all such transactions are reported to exchanges.
• Strengthens protection for minority shareholders.

Related-Party Transactions (RPTs)

• Any deal between a company and its related entities/individuals.
• Includes promoters, directors, relatives, and entities under their control.
• Must be disclosed and, in some cases, approved by shareholders.

6. RBI Governor to Chair New Payments Regulatory Board (PRB)

Source: IE

Context

The Reserve Bank of India (RBI) has constituted a six-member Payments Regulatory Board (PRB) to regulate payment systems in India. The board replaces the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).

Composition of PRB:

• Chair: RBI Governor Sanjay Malhotra
• RBI Members (3):
  • Deputy Governor
  • Executive Director in charge of Payment and Settlement Systems
  • Governor
• Government Nominees (2):
  • Secretary, Department of Financial Services (DFS)
  • Secretary, Ministry of Electronics and Information Technology (MeitY)
• Additional Member: Aruna Sundararajan, former MeitY secretary
• Permanent Invitee: RBI’s Principal Legal Adviser

Functions and Meetings:

• Regulates payment systems in India
• Will ordinarily meet at least twice a year
• Replaces BPSS, which had no government representatives and was a five-member body

Background:

• The move follows recommendations from an inter-ministerial committee headed by the Economic Affairs Secretary.
• The committee suggested amendments to the Payment and Settlement Systems Act, 2007 and proposed an independent regulatory board to handle payment-related issues.

7. RBI Raises Overseas Perpetual Debt Limit for Banks

Source: BS

Context

The Indian central bank has raised the limit for perpetual debt that banks can raise overseas and use as part of their core capital, according to a circular

Key Highlights:

• Regulator: Reserve Bank of India (RBI) issued a circular allowing banks to raise perpetual debt overseas and include it in their core capital.
• Perpetual Debt: A type of debt without a fixed maturity date, often used by banks to strengthen capital buffers.
• Purpose: Eligible for inclusion in Additional Tier-1 (AT1) capital, which forms part of a bank’s core capital under Basel III norms.
• Additional Tier-1 (AT1) Capital: Additional Tier-1 (AT1) capital is a component of a bank’s regulatory capital that is perpetual in nature (no fixed maturity) and absorbs losses to help banks remain solvent during financial stress.
• It is part of the Tier-1 capital, which is considered core capital, along with Common Equity Tier-1 (CET1).

Updated Guidelines

• Limit for AT1 Inclusion: Banks can now include up to 1.5% of Risk-Weighted Assets (RWA) through perpetual debt.
• Risk-Weighted Assets (RWA): Risk-Weighted Assets (RWA) are a bank’s assets weighted by credit risk. They represent the total assets of a bank adjusted for the riskiness of each asset, rather than just the raw book value.
• Foreign Issuance: Debt issued in foreign currency or in Indian rupees overseas can now be fully counted towards the 1.5% AT1 limit.
• Earlier Norms: Previously, only less than half of the 1.5% AT1 limit could be raised overseas, the rest had to be domestic.

Significance

• Strengthens Bank Capital: Helps banks bolster their core capital to meet regulatory requirements.
• Flexibility: Provides banks with more leeway to raise funds globally, improving capital adequacy and liquidity.
• Cost Advantage: Overseas debt may offer competitive interest rates and access to a broader investor base.

8. PhonePe and Mastercard Launch Tap-and-Pay Feature

Source: BS

Context

Fintech giant PhonePe and Mastercard have introduced a new feature allowing Mastercard cardholders to make in-store transactions via tap-and-pay using NFC-enabled smartphones.

Key Details:

• Mastercard users can tap their smartphones at NFC-enabled payment terminals to complete purchases.
• The feature also supports tokenised e-commerce transactions on NFC-capable Android smartphones.
• Cardholders can save their Mastercard credit, debit, and prepaid cards on their smartphones for seamless payments.

9. Major Rule Changes Effective from October 1, 2025

Source: ET

Context

From October 1, 2025, several important regulatory and policy changes across banking, pensions, ticketing, and postal services will take effect. These changes aim to improve efficiency, enhance transparency, and provide greater flexibility to consumers.

Banking – Cheque Clearing

• What’s new? Cheque clearing moves from batch clearing to continuous clearing.
• Phased implementation:
  • Phase 1: October 4, 2025 – January 2, 2026.
  • Phase 2: Full roll-out after January 2, 2026.
• Impact: Faster settlement and reduced delay in fund transfers.

IRCTC Ticket Reservation

• New rules for general category online bookings.
• Aadhaar-based authentication mandatory in certain cases to prevent misuse.
• Impact: Reduces fraudulent and bulk ticket bookings.

NPS (National Pension System)

• 100% equity option allowed for non-government subscribers.
• Investors can maintain multiple schemes under one PRAN across different Central Recordkeeping Agencies (CRAs).
• Deadline: Government employees cannot switch from Unified Pension Scheme (UPS) to NPS after September 30, 2025.
• Impact: More flexibility, potentially higher returns for investors.

Banking Service Charges

• PNB, YES Bank, and others revising service charges.
• Affects locker rent, stop payment, nomination services, and standing instruction failure fees.
• Impact: Customers may face higher costs, need to check bank notifications.

Postal Services

• Speed Post tariff revision and new features.
• OTP-based delivery authentication and GST split shown separately in invoices.
• Impact: Better transparency and customer trust in India Post services.

10. RBI Raises Limit for Perpetual Debt in Banks’ Core Capital

Source: BS

Context

The Reserve Bank of India (RBI) has revised rules on perpetual debt inclusion in banks’ capital structure, allowing a higher share of such debt raised overseas to count towards Additional Tier-1 (AT1) capital.

What is Perpetual Debt?

• A type of debt instrument that has no maturity date.
• Banks pay interest (coupon) on it indefinitely, but principal is not repaid.
• Treated as quasi-equity in regulatory terms.

RBI’s New Guidelines

• Earlier Rule: Perpetual debt up to 1.5% of Risk-Weighted Assets (RWA) could be counted in AT1 capital, but less than half was allowed from foreign currency or rupee-denominated bonds issued overseas.
• New Rule (Sept 2025): Entire 1.5% of RWA can now be raised overseas, either in foreign currency or in rupees issued abroad.
• Impact: Gives banks more flexibility to access cheaper global funds.

Why It Matters

• Strengthens Core Capital: AT1 capital is part of banks’ Basel-III capital framework, critical for absorbing financial shocks.
• Diversified Funding: Reduces over-reliance on domestic markets, allowing banks to tap global investors.
• Boosts Lending Capacity: Higher capital adequacy means more room to expand credit.

Related Concepts

• Risk-Weighted Assets (RWA): Bank assets (like loans, investments) adjusted for risk levels; used to calculate minimum capital requirements.
• Additional Tier-1 (AT1) Capital: The core capital of banks, consisting of equity and perpetual instruments, used to absorb losses while the bank is still a going concern.

Agriculture

1. Farmer Suicides in India – NCRB 2023 Data

Source: TH

Context

The National Crime Records Bureau (NCRB) reported that 10,786 farmers and agricultural workers committed suicide in 2023. This continues a trend of over 10,000 farm sector suicides annually, highlighting ongoing distress in agriculture.

Key Highlights:

• State-wise Distribution:
  • Maharashtra: 38.5% of cases (highest), especially Marathwada and Vidarbha cotton/soybean belts.
  • Karnataka: 22.5%
  • Andhra Pradesh: 8.6%
  • Madhya Pradesh: 7.2%
  • Tamil Nadu: 5.9%
  • Several states reported no farm suicides: West Bengal, Bihar, Odisha, Jharkhand, Himachal Pradesh, Arunachal Pradesh, Goa, Manipur, Mizoram, Nagaland, Tripura, Chandigarh, Delhi, Lakshadweep.
• Farmer vs Agricultural Worker Suicides:
  • Farmers/Cultivators: 4,690 (4,553 male; 137 female)
  • Agricultural Workers: 6,096 (5,433 male; 663 female)
  • Farm sector suicides accounted for 6.3% of total suicides (1,71,418) in India in 2023.
• Causes & Concerns:
  • Farmer organisations blame government policies, including the waiver of import duty on cotton, which could impact domestic cotton farmers.
  • Marathwada and Vidarbha regions are particularly affected.
  • Critics argue that trade agreements and imports from the U.S. threaten the livelihoods of smallholders.

2. AVPL Launches Tech Park to Indigenize Drone Components

Source: BL

Context

AVPL Ltd (AITMC Ventures Limited International), an integrated agri-drone company, is looking at indigenizing the drone ecosystem in the country in league with component manufacturers, said Preet Sandhu, co-founder and Chairperson, AVPL Ltd.

Objective To reduce dependence on imported drone parts, enhance supply chain resilience, and foster innovation in the agricultural drone industry.

Key Features of the Tech Park

• Location: Situated in a strategic area to facilitate research, development, and production activities.
• Facilities: Equipped with state-of-the-art laboratories, testing zones, and assembly lines for drone components.
• Focus Areas:
  • Development of autonomous navigation systems.
  • Creation of lightweight drone frames.
  • Integration of AI-powered sensors for precision agriculture.
  • Manufacturing of high-capacity batteries tailored for agricultural drones.

Potential Impact on Agriculture

• Enhanced Productivity: Drones equipped with advanced sensors can monitor crop health, optimize pesticide use, and improve irrigation efficiency.
• Data-Driven Decisions: Real-time data collection enables farmers to make informed decisions, leading to better yield and resource management.
• Sustainability: Precision agriculture practices promoted by drone technology contribute to sustainable farming by minimizing chemical usage and conserving water.

Facts To Remember

1. BJP leader V.K. Malhotra passes away at 93

Veteran Bharatiya Janata Party (BJP) leader Vijay Kumar Malhotra, a five-time Lok Sabha member from Delhi, passed away on Tuesday morning after a brief illness. He was 93.

2. Sumit completes a hat-trick of titles with meet record

Sumit completes a hat-trick of titles with meet record with a season’s best of 72.35m, almost 25 metres more than the personal best of his closest competitor in the F64 javelin throw category, the two-time Paralympic champion and world record holder had only himself to beat on day four of the World Para Athletics.

3. Vinay wins trap bronze; Indian pairs make it a 1-2 in mixed air rifle

Vinay Pratap Chandrawat fought his way to the trap bronze, even as the Indian mixed air rifle teams clinched the gold and silver, in the Junior World Cup.

4. Srihari wins his fifth medal, Rohit claims silver in 50m butterfly

Star Indian swimmer Srihari Nataraj once again stood tall, bagging a bronze in the 100m freestyle to extend his personal haul to five medals at the 11th Asian aquatics championships.

5. Isha & Himanshu clinch 10m rifle gold

Indian shooters continued their winning run at the ISSF Junior World Cup by winning gold and silver at the Dr Karni Singh Shooting Range.

6. Nehra breaches 80m to claim javelin gold

Rishabh Nehra became India’s newest member of the 80m club as he grabbed the javelin gold at the National Open Athletics Championships in Ranchi.

7. Indian Railways to Launch First Container Service with Assured Transit Time

Indian Railways, in partnership with Container Corporation of India (CONCOR), will launch its first container train service with assured transit time on a pilot basis from October 1, 2025.

Daily Current Affairs Quiz
2 & 3 October, 2025

National Affairs

1. Beti Bachao, Beti Padhao Completes a Decade

Context

The Beti Bachao, Beti Padhao (BBBP) scheme, launched in 2015, has completed 10 years, registering progress in sex ratio at birth and girls’ education outcomes across India. The initiative has been implemented as a convergence of Women & Child Development (WCD), Health, and HRD Ministries.

Beti Bachao, Beti Padhao (BBBP) Scheme

• Launch: 22 January 2015 by the Government of India at Panipat, Haryana.
• Nodal Ministry: Ministry of Women and Child Development (MoWCD) in collaboration with the Ministry of Health & Family Welfare (MoHFW) and the Ministry of Education (MoE, formerly HRD).
• Objective: To prevent gender-biased sex-selective elimination (female foeticide), ensure survival & protection of the girl child, and promote her education & participation.

Achievements of BBBP

• Sex Ratio at Birth (SRB): Improved from 919 (2015–16) to 929 (2019–21).
• State-level performance: 20 out of 30 States/UTs now above the national average.
• Awareness impact: Surveys (e.g., Madhya Pradesh) show 89.5% people aware of BBBP, with 63.2% motivated to send daughters to school.
• Education outcomes: Higher enrollment of girls in secondary schools and improved transition rates.

2. ANRF launches SARAL Tool to Simplify Scientific Research

Source: TH

Context

The Anusandhan National Research Foundation (ANRF) has launched the SARAL Tool (Simplified and Automated Research Amplification and Learning). It is an AI-powered platform designed to simplify complex research papers into easy-to-understand summaries.

About SARAL Tool

• Full Form: Simplified and Automated Research Amplification and Learning.
• Developed by: Anusandhan National Research Foundation (ANRF).
• Purpose: To make scientific knowledge inclusive and accessible for citizens, policymakers, academia, and industry.

Key Features

1. AI-driven Summaries: Extracts key insights from research papers and converts them into simplified versions.
2. Multi-Format Outreach: Generates videos, podcasts, posters, and presentations to increase reach.
3. Science Communication: Bridges the gap between researchers and the general public.
4. Integration with AI Open India Stack: Linked to the upcoming AI Science & Engineering Open India Stack for applications in:
   • Drug discovery
   • Aerospace
   • Climate science
   • Advanced materials

Banking and Finance

1. RBI MPC Meeting – October 1, 2025

Context

The Reserve Bank of India (RBI), in its October 2025 Monetary Policy Committee (MPC) meeting, kept the repo rate unchanged at 5.5% with a neutral stance. The decision comes amid tariff-related uncertainties, the need to evaluate the impact of previous rate cuts, and an improving domestic macroeconomic outlook.

Policy Decisions

• Repo Rate: Unchanged at 5.50% (second consecutive pause)
• Monetary Policy Stance: Neutral
• Cumulative Rate Cuts in 2025: 100 bps (Feb, Apr, Jun) → from 6.5% to 5.5%

Macro Outlook

• GDP Growth (FY26): Revised upward to 6.8% (from 6.5%)
• CPI Inflation (FY26): Revised downward to 2.6% (from 3.1%)

Rationale

• Tariff Uncertainties: May weigh on exports, create near-term risks.
• GST Rationalisation: Expected to lower inflation and boost demand.
• Global Headwinds: Persist as a risk factor.

Key Regulatory & Structural Announcements

• Expected Credit Loss (ECL) Framework
  • Applicable to all Scheduled Commercial Banks from April 1, 2027.
  • Forward-looking provisioning → enhances credit discipline.
• Basel III Norms
  • Revised capital adequacy framework to be implemented from April 1, 2027.
  • Strengthens resilience of banks through higher buffers.
• Group Entities Regulation
  • Restrictions on overlaps between banks and group entities to be removed.
  • Provides flexibility in operations.
• Risk-Based Insurance Premium
  • RBI to introduce differentiated deposit insurance premium framework for banks based on risk profile.
• Capital Market Lending Expansion
  • Removal of regulatory ceiling on lending against listed debt securities.
  • Lending against shares: Raised to ₹1 crore (from ₹20 lakh per person).
  • IPO Financing: Enhanced to ₹25 lakh (from ₹10 lakh per person).

Implications

For Economy

• Growth-supportive stance despite global uncertainty.
• Stable repo rate → supports investment and consumption.
• Upward GDP revision signals confidence in domestic recovery.

For Banks & Financial Institutions

• ECL & Basel III norms (from 2027) → strengthen risk management, capital adequacy.
• More freedom in capital market lending → deepens debt & equity markets.
• Higher IPO financing limits → encourages retail/HNI participation.

For Borrowers & Investors

• Loan EMIs remain stable (repo unchanged).
• Retail investors benefit from higher lending against shares & IPO financing.
• Lower inflation outlook → real interest rates remain supportive.

Key Terms

2. RBI MPC October 2025 – Key Takeaways

Context

• The Reserve Bank of India (RBI) conducted the 57th Monetary Policy Committee (MPC) meeting from 29 September – 1 October 2025.
• Policy stance: Neutral, keeping growth-supportive measures while monitoring inflation and external risks.
• Objective: Support domestic demand, maintain financial stability, and ensure orderly liquidity.

Policy Rates

• Cumulative rate cuts in 2025: 100 bps (Feb, Apr, Jun) from 6.5% → 5.5%.

Macro Outlook

GDP Growth (FY26)

• Revised upward to 6.8% from 6.5% in August projection.
• Quarterly forecast:
  • Q1 FY26: 7.8%
  • Q2 FY26: 7.0%
  • Q3 FY26: 6.4%
  • Q4 FY26: 6.2%
  • Q1 FY27: 6.4%
• Drivers: Strong consumption, investment, government spending, good monsoon, GST rationalisation, and rising capacity utilisation.

CPI Inflation (FY26)

• Revised downward to 2.6% from 3.1%.
• Quarterly forecast:
  • Q1 FY26: 4.5%
  • Q2 FY26: 1.8%
  • Q3 FY26: 1.8%
  • Q4 FY26: 4.0%
• Factors: Food disinflation, mild fuel inflation, GST rationalisation, favourable base effects.

External Sector

• Current Account Deficit (CAD): 0.2% of GDP in Q1 FY26 (down from 0.9% last year).
• Services exports: double-digit growth; remittances: US$35.3 billion.
• Merchandise exports: +2.5%, imports: +2.1% (April–August 2025).
• FDI inflows: US$37.7 billion (April–July 2025).

Key Regulatory & Structural Announcements

• Banking & Risk Management
  • ECL Framework: Forward-looking provisioning for all scheduled commercial banks from April 1, 2027.
  • Basel III Norms: Revised capital framework effective April 1, 2027.
  • Risk-Based Insurance Premium: Differential insurance premium for banks based on risk profile.
  • Group Entities Regulation: Remove restrictions on overlaps between banks and group entities.
• Credit Flow & Capital Market Lending
  • Removal of ceiling on lending against listed debt securities.
  • Lending against shares limit raised from ₹20 lakh → ₹1 crore per person.
  • IPO financing limit raised from ₹10 lakh → ₹25 lakh per person.
  • NBFC lending to high-quality infrastructure: lower risk weights.
  • Credit limit thresholds for large borrowers revised.
• External / FX & Ease of Doing Business
  • Rationalisation of ECB/FEMA rules (borrowers, lenders, end-use norms, reporting).
  • Exporters’ FCY repatriation extended: 1 → 3 months.
  • Merchanting trade repatriation extended: 4 → 6 months.
  • Promote INR cross-border transactions with Bhutan, Nepal, Sri Lanka.
• Financial Inclusion & Consumer Protection
  • Strengthen Basic Savings Bank Deposit (BSBD) accounts.
  • Revise RBI Ombudsman Scheme, including rural cooperative banks.
  • Strengthen Internal Ombudsman mechanisms in regulated entities.
• Acquisition financing:
  • Banks now allowed to finance mergers & acquisitions (M&A) of Indian companies, addressing a long-standing demand.
• Credit exposure liberalisation:
  • Limit on lending to large corporates removed, previously capped under the 2016 circular.
  • RBI to monitor system-level concentration risk rather than individual banks.
• Collateral and credit limits:
  • Increased loan limits against shares, REITs, InvITs.
  • Ceiling removed on loans against listed debt securities.
  • Higher limits for financing IPOs and loans against shares for individuals.

Implications

For the Economy:

• Growth-supportive stance encourages investment and consumption.
• Lower inflation maintains purchasing power and real rates.
• External stability (CAD narrowing) supports rupee and financial markets.

For Banks & Financial Institutions:

• ECL and Basel III require stronger capital adequacy and risk management.
• Expanded capital market lending fosters market depth.
• Higher IPO financing supports retail and HNI participation.

For Borrowers & Investors:

• Loan EMIs stable due to unchanged repo.
• Real interest rates favorable amid lower inflation.
• Retail investors benefit from higher financing limits for shares and IPOs.

Key Terms for RBI Grade B / Exams

• Repo Rate: Rate at which RBI lends short-term funds to banks against government securities. Tool to control liquidity and inflation.
• Reverse Repo Rate: Rate at which RBI borrows from banks. Absorbs liquidity or encourages lending depending on level.
• ECL Framework: Forward-looking provisioning system; banks estimate expected credit losses.
• Basel III: International banking reforms to strengthen capital, liquidity, and leverage standards.
• CPI Inflation: Consumer Price Index; measures average change in prices of goods and services consumed by households.
• CAD (Current Account Deficit): Difference between imports & exports of goods, services, and net transfers.

3. RBI Withdraws System-Level Lending Cap for Large Corporates

Source: BS

Context

The Reserve Bank of India (RBI) has withdrawn its 2016 circular that restricted banks from lending beyond a specified threshold to a single large corporate or group at the systemic level, while maintaining the large exposure framework at individual bank level.

Key Highlights:

• Previous Circular:
  • Set credit exposure limits at the banking system level:
    • ₹25,000 crore in FY18 → ₹15,000 crore in FY19 → ₹10,000 crore from FY20.
  • Aimed to reduce concentration risk across the banking system.
• Current Framework:
  • Large Exposure Framework continues:
    • Single borrower: ≤20% of Tier-1 capital
    • Corporate group: ≤25% of Tier-1 capital
• Reason for Withdrawal:
  • Share of corporates in total banking exposure has fallen by ~10%, reducing systemic risk.
  • The circular is no longer necessary to ensure financial stability, and its removal eases compliance burdens.

Market and Banking Impact

• Corporate credit demand remains muted due to:
  • Slower capex cycle
  • Alternative funding sources (bond markets, ECBs)
  • Healthy cash reserves
• Some incremental lending may flow into:
  • Infrastructure
  • MSME sectors
• Potential funds returning to banks from bonds/ECBs: ₹3–4.5 trillion

4. RBI Proposes Lower Risk Weights for NBFC Infrastructure Loans

Source: BS

Context

The Reserve Bank of India (RBI) has proposed reducing risk weights for loans by Non-Banking Financial Companies (NBFCs) to operational, high-quality infrastructure projects.

• Objective: Reduce the cost of infrastructure financing, improve risk assessment, and optimise capital allocation.
• The framework will be principle-based, allowing NBFCs more discretion in assigning risk weights for infrastructure lending.

Key Highlights

Scope of Proposal

• Applies to NBFCs lending to operational infrastructure projects.
• Draft regulations will be issued for public consultation before implementation.
• Existing norms already allow lower-risk weights for PPP projects; the proposal extends clarity and flexibility for other operational projects.

Expected Impact

• Cost of financing: Reduced for NBFCs, potentially making infrastructure projects more viable.
• Competitiveness: Other NBFCs beyond IDFs and IFCs can benefit, expanding financing sources.
• Market participation: Could attract new players to infrastructure lending.

Risks & Cautions

• Supervisory oversight is essential to avoid underestimation of risks.
• Excessive lowering of risk weights may lead to over-leveraging and concentration in infrastructure portfolios.
• NBFCs need prudent capitalisation to maintain strong credit profiles.

5. RBI to Consider Issuance of New Urban Cooperative Bank (UCB) Licences

Source: BL

Context

The Reserve Bank of India (RBI) has announced plans to issue a discussion paper on licensing new banks in the Urban Cooperative Banking (UCB) sector, indicating a shift in policy after nearly two decades.

Background

• 2004 Freeze: Fresh licenses for UCBs were stopped due to weak financial health and governance issues in the sector.
• The decision to explore new licences comes in light of improved financial performance and regulatory compliance among existing UCBs.
• Consolidation Drive (2004–24):
  • Amalgamation of unviable UCBs.
  • Closure of non-viable entities.
  • Suspension of new licenses.
• As a result, the number of UCBs fell from 1,926 (2004) to 1,472 (March 2024).

What are UCBs?

• Urban Cooperative Banks (UCBs) are cooperative banks operating in urban and semi-urban areas, primarily catering to small borrowers, traders, low- and middle-income groups.
• They are organised under the cooperative structure but perform banking functions like accepting deposits, lending, remittances, and other retail banking services.

RBI Governance of UCBs

6. RBI Eases Bank Lending to Boost Corporate Growth and Capital Markets

Context

The RBI has introduced its most comprehensive reforms in bank lending, targeting both corporate and individual borrowers. The aim is to reverse disintermediation (where companies bypass banks for funding), strengthen capital markets, and support economic growth.

Key Reforms and Implications

Corporate Lending and Acquisitions

• Banks can now finance mergers and acquisitions, reducing the cost of corporate takeovers.
• This encourages leveraged buyouts and supports a strong pipeline of new issues, improving corporate access to capital.
• Bank credit growth has lagged behind economic growth; these measures aim to expand banks’ corporate lending books.

Lending to Large Companies

• Withdrawal of the 2016 lending cap framework will allow banks to lend more flexibly.
• Freed resources can be directed to productive economic activity, such as infrastructure and MSMEs.

Individual Investor Lending

• Higher caps on loans for individuals investing in IPOs and shares will maintain investor interest in emerging and high-performing companies.
• This also improves liquidity in the equity market.

Risk Management and Prudential Measures

• Lower risk weights for infrastructure loans support ongoing capex projects.
• Ceilings on lending against debt securities removed, allowing banks more flexibility.
• RBI is shifting towards macroprudential regulation, focusing on systemic risk rather than punitive lending limits.
• Phased transition to international credit risk frameworks ensures minimal disruption.

External Commercial Borrowing (ECB) and Export Credit

• Revised ECB norms will expand the pool of eligible borrowers and lenders, relax borrowing limits, and simplify reporting.
• Export credit rules are being eased to improve ease of doing business.

7. Nuvama Wealth Gets SEBI Approval to Set Up Mutual Fund Business

Source: BS

Context

Nuvama Wealth Management Ltd. (formerly Edelweiss Securities arm) has received regulatory clearance from the Securities and Exchange Board of India (SEBI) to enter the mutual fund (MF) industry as a sponsor.

SEBI Norms: Eligibility of a Mutual Fund Sponsor

The sponsor is the promoter who sets up the mutual fund and AMC. According to SEBI (Mutual Funds) Regulations, 1996, the following conditions must be fulfilled:

8. Fin-Influencers

Context

The Securities and Exchange Board of India (SEBI) has been actively cracking down on financial influencers (“fin-fluencers”) for spreading misinformation and fraudulent advice. Yet, a recent SEBI-Kantar study shows Indian investors continue to place significant trust in them.

Who Are Finfluencers?

• Finfluencers are social media content creators who provide advice or opinions on stocks, mutual funds, crypto, insurance, trading strategies, and personal finance.
• Platforms: YouTube, Instagram, Telegram, Twitter (X), etc.
• Influence: Large following among young, first-time investors.

SEBI’s Concerns

1. Misinformation: Many finfluencers provide unverified or fraudulent advice.
2. Conflict of Interest: Paid promotions of stocks or schemes without disclosure.
3. Pump-and-Dump Risk: Coordinated stock tips to artificially inflate prices.
4. Lack of Registration: Most are not registered with SEBI as investment advisers (IA) or research analysts (RA).

SEBI’s Crackdown & Regulations

• Registered Advice Mandatory: Only SEBI-registered IAs and RAs can legally provide financial advice.
• Disclosure Norms: Strict rules on disclosure of affiliations, compensation, and risks.
• Finfluencer Ban Proposals:
  • No profit-sharing arrangements between finfluencers and registered intermediaries.
  • No misleading ads or referral models.
• Investor Education: SEBI is strengthening official investor education portals to counter finfluencer misinformation.

Key Terms

• Investment Adviser (IA) – Registered with SEBI to provide personalised financial advice for a fee.
• Research Analyst (RA) – Provides research reports/stock recommendations with mandatory disclosures.
• Pump-and-Dump – Fraud where promoters/finfluencers artificially inflate stock prices, then sell at a profit, leaving retail investors at a loss.

Agriculture

1. National Pulses Mission (2025–31)

Source: PIB

Introduction

• Approval: Union Cabinet, October 2025
• Nodal Ministry: Ministry of Agriculture & Farmers’ Welfare
• Duration: Six years (2025–26 to 2030–31)
• Budget: ₹11,440 crore
• Objective: To achieve Aatmanirbharta (self-reliance) in pulses, enhance food and nutritional security, and reduce import dependency.

Key Objectives

• Boost Domestic Production: Raise production from 242 lakh tonnes (2024–25) to 350 lakh tonnes (2030–31).
• Expand Cultivation Area: Bring pulses area under cultivation to 310 lakh hectares.
• Enhance Productivity: Increase yield to 1,130 kg/ha.
• Reduce Imports: Cut dependency by 15–20%, saving foreign exchange.

Major Features

• Seed Security:
  • Distribution of 126 lakh quintals of certified seeds.
  • 88 lakh free seed kits for farmers.
  • Tracking via SATHI digital portal for transparency.
• Assured Procurement:
  • 100% procurement of Tur (Arhar), Urad, and Masoor at MSP for 4 years.
• Infrastructure Support:
  • Establishment of 1,000 post-harvest processing units.
  • Subsidy support up to ₹25 lakh per unit.
• Research & Innovation:
  • Multi-location trials for climate-resilient and pest-resistant varieties.
• Farmer Training & Capacity Building:
  • Programmes for adoption of modern, sustainable pulse cultivation techniques.

2. Crop Insurance Premiums Fall 34% in FY26

Source: BS

Context

India’s crop insurance sector is witnessing a sharp decline in premium collections in FY26 due to structural reforms, aggressive pricing, and re-tendering by states. The trend raises concerns about the sustainability of insurers under the current loss-sharing models.

Key Highlights:

• Major Insurer Performance:
  • Agriculture Insurance Company of India (segment leader): ₹2,539 crore, down 4% YoY.
• State Trends:
  • Maharashtra’s crop insurance premium dropped sharply from ₹9,000 crore earlier to ~₹3,000 crore.
  • Other states may follow re-tendering practices, further reducing premiums.
• Pricing & Models:
  • Farmers’ share of premiums remains capped under PMFBY:
    • Kharif crops: max 2% of sum insured.
    • Rabi crops: max 1.5%.
    • Commercial/horticultural crops: max 5%.
  • Balance subsidised by Centre & states.
  • Risk-sharing frameworks include:
    • Cup & cap model (80:110 / 60:130) – refunds to state treasury if claims < threshold; Centre/state share burden if claims exceed upper cap.
    • Profit-loss sharing model – government subsidy partly refunded to state if claims below a certain level.

Facts To Remember

1. Thumri loses its voice as Pandit Chhannulal Mishra passes away leaving a musical legacy

Thumri fell silent on Thursday as Pandit Chhannulal Mishra, the most mellifluous exponent of the semi-classical art form, passed on from age-related ailments.

2. Dharambir, Atul add to India’s medal tally

On a day the retreating monsoon decided to turn up in full force in the city, Dharambir Nain proved he was still one of the best, winning silver in the club throw F51 category on the fifth day of the 2025 World Para Athletics Championships.

3. Top seed Iniyan crowned National chess champion

GM P. Iniyan of Tamil Nadu won the 62nd National chess championships, remaining undefeated over 11 rounds in Guntur.

4. India tops the table with 26 medals in Junior WC

Aleksandra Tikhonova beat Tejaswani 33-30 for the sports pistol gold in the Junior World Cup that concluded at the Dr. Karni Singh Range, Tughlakabad.

5. Global Agency Projections for India (FY26)

• CII: 6.4–6.7%
• IMF: 6.4%
• Fitch: 6.9% (FY26), 6.3% (FY27)
• S&P Global: 6.5%
• UN: 6.3% (FY26), 6.4% (FY27)
• OECD: 6.7%

Daily Current Affairs Quiz
4 October, 2025

National Affairs

1. Cyclone Shakthi

Source: TH

Context

The India Meteorological Department (IMD) has officially confirmed the formation of Cyclone Shakthi over the northeast Arabian Sea, marking one of the early post-monsoon cyclonic events of 2025.

About Cyclone Shakthi

• A tropical cyclonic storm that developed in the northeast Arabian Sea, around 340 km west of Dwarka, Gujarat.
• Named “Shakhti” under the World Meteorological Organisation (WMO) regional naming system for the North Indian Ocean.

Origin and Development:

• Emerged from a low-pressure area formed over the warm Arabian Sea waters in early October 2025.
• Intensified into a Cyclonic Storm (CS) on October 3, and is forecast to strengthen into a Severe Cyclonic Storm (SCS) as it moves west-southwestwards.

Why the Bay of Bengal Gets More Cyclones than the Arabian Sea?

2. Snow Leopards

Context

The Himachal Pradesh Forest Department has recorded 83 snow leopards in its latest 2025 survey, showing a significant rise from 51 individuals reported in 2021. The increase reflects ongoing conservation success under India’s Project Snow Leopard and improved habitat monitoring through scientific tracking methods.

Credit: Wikipedia

About the Snow Leopard (Panthera uncia)

• A large, elusive wild cat native to the high-altitude regions of Asia.
• Often called the “ghost of the mountains” for its remarkable camouflage and stealthy movement.
• Declared the State Animal of Himachal Pradesh.

Conservation Status

• IUCN Red List: Vulnerable (VU)
• CITES Appendix I: Trade strictly prohibited.
• Indian Wildlife (Protection) Act, 1972: Listed in Schedule I, offering the highest level of protection.

Key Conservation Initiatives in India

• Project Snow Leopard (2009):
  • A central government initiative promoting landscape-level conservation across five Himalayan states.
• SECURE Himalaya Project:
  • Jointly implemented by the Government of India and UNDP, focusing on sustainable livelihoods and biodiversity conservation in snow leopard habitats.
• Himalayan Wildlife Surveys:
  • Use of camera traps, genetic sampling, and AI-based tracking for accurate population assessments.

Banking and Finance

1. External Commercial Borrowings (ECBs)

Context

The Reserve Bank of India (RBI) has announced that it will soon release a draft framework to simplify and rationalise rules governing External Commercial Borrowings (ECBs). The new framework aims to expand the scope of eligible borrowers and recognised lenders, relax borrowing and maturity limits, remove cost restrictions, and simplify reporting procedures to enhance ease of doing business and promote capital inflows.

About External Commercial Borrowings (ECBs)

External Commercial Borrowings (ECBs) are commercial loans raised by eligible Indian entities from recognised non-resident entities in foreign currency or Indian Rupees (INR).
They are governed under the Foreign Exchange Management Act (FEMA), 1999, and related RBI regulations.

Organisations Involved

• Reserve Bank of India (RBI): Regulates and issues guidelines for ECBs.
• Borrowers: Indian corporates, Public Sector Undertakings (PSUs), Non-Banking Financial Companies (NBFCs), trusts, and institutions.
• Lenders: International banks, multilateral financial institutions, export credit agencies, foreign equity holders, and other recognised entities.

Aim of ECBs

• To provide Indian entities access to foreign capital at competitive interest rates.
• To diversify funding sources beyond domestic markets.
• To facilitate financing of infrastructure, capacity expansion, and other long-term projects.

Key Features of External Commercial Borrowings

Routes of Borrowing

• Automatic Route: Borrowing permitted directly if it meets standard conditions; processed through Authorised Dealer (AD) Category-I banks.
• Approval Route: Borrowing proposals that do not meet automatic route conditions require specific RBI approval.

Basic Conditions

• Minimum Maturity Period: ECBs must have a defined tenure (e.g., 3–5 years or more depending on end-use).
• All-in-Cost Ceiling: A cap on total borrowing costs, including interest, fees, and other charges.
• End-Use Restrictions: Rules defining permitted and prohibited uses of ECB funds.
• Mandatory Reporting: Borrowers must obtain a Loan Registration Number (LRN) and report transactions via Form ECB to the RBI.

Permitted Uses

• Financing capital expenditure, infrastructure, or expansion projects.
• Refinancing existing loans or replacing costlier debt.

Prohibited Uses

• Real estate business (except affordable housing and township projects).
• Investment in capital markets or speculative purposes.
• Working capital or general corporate purposes (unless specifically allowed).

2. Basic Savings Bank Deposit (BSBD) Accounts

Source: BS

Context

The Reserve Bank of India (RBI) has issued a draft circular updating guidelines for Basic Savings Bank Deposit (BSBD) accounts, aiming to enhance customer service, promote digitisation, and deepen financial inclusion. BSBD accounts include those opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

What Is a BSBD Account?

• A Basic Savings Bank Deposit (BSBD) account is a no-frills savings account designed to provide basic banking facilities to every individual without requiring a minimum balance.
• Accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) are treated as BSBD accounts.
• Over 566 million PMJDY accounts have been opened, holding deposits of approximately ₹2.67 trillion.

Key Features of BSBD Accounts

Significance

• Promotes financial inclusion for unbanked and underbanked populations.
• Aligns with the digitisation of banking services.
• Provides a standardised, cost-free, and accessible account for low-income and first-time bank users.

3. Scale-Based Regulation (SBR) Framework

Source: ET

Context

The Reserve Bank of India (RBI) has directed 15 Upper Layer Non-Banking Financial Companies (NBFCs), including Tata Sons (a Core Investment Company - CIC), to list on stock exchanges by 30 September 2025.

This mandate stems from the Scale-Based Regulation (SBR) Framework, which classifies NBFCs based on their size, activity, and systemic importance to ensure proportionate regulation and stronger governance in the shadow banking sector.

About the Scale-Based Regulation (SBR) Framework

Introduced by the RBI in October 2021, the Scale-Based Regulation (SBR) framework is a risk-based regulatory structure for NBFCs.
It aims to align regulatory intensity with the size, complexity, and risk profile of NBFCs—similar to the tiered approach used for banks.

Objective

• To strengthen financial stability and regulatory oversight in the NBFC sector.
• To prevent systemic risks from large, interconnected NBFCs.
• To improve transparency, governance, and accountability through stricter compliance norms.

Four-Layer Structure Under the SBR Framework

Key Features of the SBR Framework

• Proportionate Regulation
  • Regulatory requirements increase with the size and risk of the NBFC.
• Governance and Board Oversight
  • Upper Layer NBFCs must adopt enhanced corporate governance, independent board composition, and risk management frameworks comparable to banks.
• Listing Requirement (for Upper Layer NBFCs)
  • RBI mandates that NBFCs identified in the Upper Layer must be listed on a recognised stock exchange within three years of classification.
  • This enhances market discipline and transparency.
• Capital Adequacy Norms
  • Stricter minimum capital requirements, liquidity coverage ratio (LCR), and exposure norms apply to Upper Layer NBFCs.
• Disclosure and Supervision
  • Regular stress testing, public disclosures, and supervisory reporting to RBI.
• Dynamic Classification
  • RBI can reclassify NBFCs across layers annually based on changes in their balance sheet size, systemic importance, or risk profile.

4. RBI Proposes Overhaul of ECB Framework

Source: IE

Context

The Reserve Bank of India (RBI) has released a draft framework to reform External Commercial Borrowing (ECB) regulations, aiming to enhance access to foreign capital while ensuring prudent risk management. The proposal seeks to link borrowing limits to company financial strength, remove cost caps, and simplify end-use and maturity rules to align with global standards.

Key Proposals:

• Borrowing Limits Linked to Net Worth:
  • Companies may raise funds up to the higher of $1 billion in outstanding ECBs or total external and domestic borrowings up to 300% of net worth, based on the latest audited balance sheet.
  • The move ties borrowing capacity to the borrower’s financial resilience rather than a uniform cap.
• Market-Determined Interest Rates:
  • The RBI proposes to remove the all-in-cost ceiling (currently capped at 450 bps over benchmark).
  • Borrowing costs will instead be aligned with prevailing market conditions, improving pricing efficiency and flexibility.
• Simplified End-Use and Maturity Norms:
  • End-use restrictions and minimum average maturity (MAM) requirements will be eased.
  • This change will benefit large corporates in infrastructure and capital-intensive sectors that need flexible long-term funding.
• Broadened Borrower and Lender Base:
  • The framework expands the pool of eligible borrowers and lenders, facilitating greater participation and capital inflow.
• Operational Guidelines:
  • ECB proceeds must be repatriated immediately and credited to an INR account with a bank in India.
  • Pending deployment, funds can be held in fixed deposits for up to 12 months.
  • Funds meant for permissible foreign currency expenditure can be held in foreign currency accounts in India or invested in high-quality overseas deposits until use.
  • Restructuring or insolvency cases may raise ECBs only if permitted under their resolution plan.
• Reporting Simplification:
  • ECB reporting and compliance requirements will be streamlined to reduce administrative friction.

5. Multi-Asset Allocation Funds

Source: BS

Context

Multi-asset allocation funds (MAAFs) have emerged as strong performers among mutual funds (MFs), rivalling medium-term returns from traditional equity categories while maintaining a lower risk profile.

What Are Multi-Asset Allocation Funds (MAAFs)?

Multi-Asset Allocation Funds are hybrid mutual fund schemes that invest in at least three different asset classes, such as:

• Equity and equity-related instruments
• Debt and money market instruments
• Commodities (primarily gold or silver)

Regulatory Mandate (SEBI Rule):

As per the Securities and Exchange Board of India (SEBI), MAAFs must invest a minimum of 10% in each of at least three asset classes at all times.

Key Features of MAAFs

• Diversified Asset Mix
  • Allocation across equity, debt, and commodities reduces portfolio concentration risk.
• Lower Volatility
  • Since returns come from multiple asset classes, MAAFs exhibit lower drawdowns during equity market corrections.
• Dynamic Rebalancing
  • Fund managers periodically rebalance the portfolio to capture opportunities across asset classes depending on market conditions.
• Inflation Hedge
  • Exposure to gold and commodities provides a natural hedge against inflation and currency depreciation.
• Tax Efficiency
  • If equity allocation exceeds 35%, the fund is taxed as a hybrid-debt fund (post-April 2023 norms).
  • Earlier, some funds maintained >65% equity to avail equity taxation benefits, but SEBI’s latest rules ensure clearer classification.

Why MAAFs Are Performing Well

• Equity markets have delivered solid long-term gains, boosting fund returns.
• Debt instruments have provided stability amid fluctuating interest rates.
• Gold exposure has contributed positively amid global inflation and geopolitical uncertainty.
• This tri-asset structure has resulted in steady, risk-adjusted returns over the past three years.

Comparison: MAAFs vs. Traditional Equity Funds

6. Kiwi Launches Interest-Backed EMI Option on UPI

Source: BS

Context

Fintech firm Kiwi has announced the launch of India’s first-ever interest-backed EMI option on UPI payments, enabling users to convert high-value transactions into instalments while earning cashback equivalent to the interest paid. The move comes amid a broader push to expand credit accessibility via real-time payment systems.

Key Highlights

Unique Model: Users can split big-ticket UPI payments into EMIs with cashback on interest — a first-of-its-kind feature in India’s fintech ecosystem.

Objective To promote credit-based UPI transactions while reducing the effective cost of borrowing for consumers.

7. RBI Tightens Related Party Lending Rules, Introduces Unified Framework

Source: ET

Context

The Reserve Bank of India (RBI) has issued a draft circular expanding the definition and scope of related party transactions for commercial banks and NBFCs. This reform aims to strengthen corporate governance, prevent conflicts of interest, and ensure greater transparency in lending practices. The new norms will come into effect from April 1, 2026.

Key Highlights:

Broader Definition of Related Parties

The updated framework brings under its ambit:

• Promoters and Key Managerial Personnel (KMPs)
• Shareholders holding over 5% equity
• Entities with significant influence and their relatives
• Earlier, the restrictions were limited only to directors and entities in which they held interests.

Unified Governance Framework

• The new circular consolidates over a dozen legacy circulars, ensuring a single, harmonised rulebook for related party lending.
• The goal is to minimise regulatory arbitrage and create uniform compliance standards across all banks and NBFCs.

Scale-Based Approval Thresholds

Board approval is now mandatory for loans beyond specified limits:

Governance Safeguards

• Mandatory recusal of interested directors or executives from approval processes.
• Quarterly internal audits and statutory auditor reviews of all related party exposures.
• Public disclosures of top exposures and provisioning details in financial statements.

Exemptions and Allowances

• Loans to public trusts allowed if a trustee is also a bank director.
• Loans to directors backed by government securities, life insurance, or FDs are permitted (LTV ≤ 100%).
• Employee-directors can receive personal loans if they qualify under employee schemes.
• Non-fund-based facilities (e.g., guarantees) allowed if fully cash-collateralised.

Restrictions on Foreign Bank Branches

• Foreign bank branches in India are prohibited from lending to Indian firms where a director of the parent foreign bank abroad has an interest.

8. RBI Recognises FIDC as Self-Regulatory Organisation (SRO) for NBFCs

Source: TOI

Context

The Reserve Bank of India (RBI) has officially recognised the Finance Industry Development Council (FIDC) as the Self-Regulatory Organisation (SRO) for the Non-Banking Financial Companies (NBFC) sector, marking a significant step toward structured self-governance, enhanced compliance, and sector-wide coordination.

About the Finance Industry Development Council (FIDC)

• Established: 2004
• Nature: A representative body for NBFCs registered with the RBI.
• Scope: FIDC primarily represents asset financing, loan, and investment NBFCs, advocating for fair practices, policy dialogue, and professional standards.
• Objective: To promote best governance practices, industry ethics, and collaborative engagement between NBFCs and regulators.

Significance of RBI Recognition

1. Formal Role in Self-Regulation
   • As an SRO, FIDC will now play an official supervisory and coordination role for NBFCs.
   • It will help bridge communication between the RBI and NBFCs on policy, compliance, and operational matters.
2. Enhanced Industry Discipline
   • The SRO mechanism ensures peer accountability, encouraging members to adhere to ethical lending, transparency, and fair customer practices.
3. Strengthened Regulatory Ecosystem
   • Recognition of FIDC will help streamline grievance redressal, monitor market conduct, and promote capacity building across NBFCs.
4. Improved Compliance Framework
   • FIDC, as an SRO, will issue guidelines, best practices, and codes of conduct, ensuring consistent compliance across the NBFC sector.

What Is a Self-Regulatory Organisation (SRO)?

A Self-Regulatory Organisation (SRO) is an industry body recognised by a regulatory authority (like the RBI or SEBI) to:

• Develop and enforce standards of conduct among its members.
• Promote ethical business practices.
• Support regulators in monitoring and supervision.
• Facilitate two-way communication between industry participants and regulators.

Examples:

• AMFI (Association of Mutual Funds in India) – for mutual funds.
• FIMMDA (Fixed Income Money Market and Derivatives Association of India) – for bond and derivatives markets.
• FIDC – now, for NBFCs.

Broader Regulatory Context

• The recognition aligns with the RBI’s push for a stronger, tiered NBFC regulatory framework under the Scale-Based Regulation (SBR) structure.
• It complements the RBI’s broader strategy of risk-based supervision and market-led governance, particularly for systemically important NBFCs.

9. NITI Aayog Moves to Simplify Tax for Foreign Firms

Source: News on Air

Context

In a move aimed at reducing tax disputes and simplifying compliance for foreign businesses, NITI Aayog has proposed an optional presumptive tax regime for permanent establishments (PEs) operating in India. The proposal, outlined in the Aayog’s Tax Policy Working Paper Series-1, seeks to enhance certainty, transparency, and uniformity in India’s tax administration system.

What is a Permanent Establishment (PE)?

A Permanent Establishment (PE) refers to a significant and fixed business presence of a foreign entity within India. Such entities are typically liable to pay corporate income tax on income attributable to their Indian operations.

Key Proposal: Optional Presumptive Tax Scheme

NITI Aayog has suggested introducing a simplified, optional tax mechanism where a foreign company can be taxed based on a pre-defined percentage of gross revenue rather than undergoing a full-scale audit and profit attribution process.

Main Features of the Proposal:

• Optional Scheme: Foreign companies may opt in for simplicity or opt out to file a regular return if their actual profits are lower.
• Sector-Specific Rates: Different deemed profit margins would apply across industries.
• Certainty & Compliance Ease: Companies opting in would be exempt from maintaining detailed books in India for covered activities.
• Safe Harbour Protection: Tax authorities would not litigate the existence of a PE for opted-in entities, offering legal certainty.
• Alignment with Global Norms: The scheme would align with OECD principles and avoid retrospective amendments.

Expected Benefits:

• Reduction in tax litigation and administrative burden,
• Boost in investor confidence and ease of doing business,
• Improved tax revenue certainty for the government,
• Alignment with Make in India and FDI promotion goals,
• Strengthened India’s global investment competitiveness.

Facts to Remember

1. Veteran journalist T.J.S. George no more

T.J.S. George, veteran journalist, biographer and columnist, who left a mark on Indian English journalism through his incisive commentary and uncompromising independence, passed away from age-related complications. He was 97.

2. Former Rajasthan Speaker Girraj Tiwari passes away

Former Rajasthan Assembly Speaker Girraj Prasad Tiwari died in Bharatpur late on Thursday night at the age of 105 years.

3. Nishad, Simran make it a golden day for India

Nishad Kumar broke the jinx, winning his maiden world title after a series of second-placed finishes in style with a new Asian record of 2.14m, on a productive day seven of the World Para Athletics Championships.

4. Cyclone Shakti, season’s 1st over Arabian Sea

The season’s first cyclonic storm over the Arabian Sea has intensified into ‘Cyclone Shakti’ on Friday, the IMD stated. Currently centred about 250km westsouthwest of Gujarat’s Dwarka, the system is expected to strengthen into a severe cyclonic storm by Saturday. While forecasters said it is unlikely to have a significant impact on the Indian landmass, sea conditions are expected to be rough over the weekend.

5. India Ratings Downgrades WAPCOS Bank Loans to BBB

India Ratings has downgraded the bank loan facilities of WAPCOS, a central public sector enterprise, from A to BBB. The move comes amid concerns over the company’s elongated working capital cycle and potential reliance on debt to manage temporary cash-flow mismatches.

6. Government Raises Wheat MSP for 2025-26 Amid Policy Concerns

The Narendra Modi government has announced a minimum support price (MSP) of Rs 2,585 per quintal for the 2025-26 wheat crop, up Rs 160 from last year. This marks a higher-than-usual hike, exceeding the Rs 150-per-quintal rise of the previous two years.

7. Digital Transformation in Cotton Procurement: Kapas Kisan App Empowers 16 Lakh Farmers

The Cotton Corporation of India (CCI) has launched the Kapas Kisan App to digitise and streamline the cotton procurement process across India, beginning with the 2025-26 procurement season. This marks a significant step toward transparent, efficient, and farmer-friendly operations under the Minimum Support Price (MSP) framework.

8. Amit Shah inaugurates ₹325 cr Sabar Dairy plant in Rohtak

Union Home Minister Amit Shah inaugurated the newly constructed Sabar Dairy Plant in Rohtak, as part of efforts to promote the cooperative sector.

Daily Current Affairs Quiz
5 & 6 October, 2025

National Affairs

1. India–UK Conduct Bilateral Naval Exercise KONKAN-2025

Source: News on Air

Context

Exercise KONKAN-2025, a bilateral naval exercise between the Indian Navy and the Royal Navy (UK), commenced off the western coast of India on 5 October 2025. The exercise reaffirms both nations’ commitment to a secure, open, and free Indo-Pacific and aligns with the India–UK Comprehensive Strategic Partnership outlined in Vision 2035.

Key Highlights:

• Duration & Phases:
  • Conducted in two phases (5–12 October 2025) — Harbour Phase and Sea Phase.
• Harbour Phase (5–8 October):
  • Includes professional interactions, cross-deck visits, sports fixtures, and cultural exchanges.
  • Joint Working Group meetings and Subject Matter Expert (SME) exchanges to strengthen operational understanding.
• Sea Phase (9–12 October):
  • Involves complex maritime operations, including:
    • Anti-Air, Anti-Surface, and Anti-Submarine Warfare drills.
    • Flying operations and seamanship evolutions.
  • Focus on interoperability and joint mission capability across domains.
• Forces Involved:
  • Indian Navy: Carrier Battle Group led by INS Vikrant along with other surface, sub-surface, and air assets.
  • Royal Navy: UK Carrier Strike Group (CSG-25) led by HMS Prince of Wales, with participation from Norway and Japan.
• Follow-up Exercise:
  • After KONKAN-2025, UK CSG-25 will conduct a one-day aerial defence exercise with the Indian Air Force on 14 October 2025.

2. Landslides in India

Source: TOI

Context

Heavy rainfall in Darjeeling and Kalimpong districts (West Bengal) triggered multiple landslides, killing at least 14 people and damaging key infrastructure, including the Dudhia Bridge and Teesta Bazaar link road. The incident highlights the increasing frequency of climate-induced disasters in the fragile Eastern Himalayan region.

About Landslides:

• A landslide is the downward movement of rock, soil, or debris along slopes under the influence of gravity.
• Triggered when shear stress exceeds the shear strength of slope materials.

Key Causes:

• Heavy rainfall, earthquakes, deforestation, unplanned construction, and road cutting.
• Human interference in fragile terrains accelerates slope instability.

Impacts:

• Destroys roads, bridges, and settlements, isolates communities, and disrupts vital supply and communication networks.

India’s Vulnerability to Landslides:

• Around 13% of India’s land area (0.42 million sq. km) is landslide-prone, per the Geological Survey of India (GSI).
• Major high-risk regions: Himalayas, Northeastern Hills, Western Ghats, Nilgiris, and Eastern Ghats.
• The Northeast alone accounts for 42% of the total hazard zone due to:
  • Steep gradients, fragile geology, and intense monsoon rainfall.
  • Unregulated construction and deforestation.

Darjeeling Landslides – Causes and Impact:

NDMA Guidelines on Landslide Management:

3. Unified National Employment Framework

Source: TH

Context

India’s employment challenge has re-emerged as a national policy priority as experts from the Confederation of Indian Industry (CII) urged the government to create a Unified National Employment Framework (NEF). The proposal aims to synchronize skilling, industrial, and labour policies to address job–skill mismatches and ensure inclusive growth amid rapid economic and technological changes.

Key Trends in Employment:

• Demographic Advantage:
  • India is expected to add 133 million workers by 2050, forming 18% of the global workforce.
  • The demographic window will peak by 2043, demanding urgent job creation strategies.
• Rise of Informal and Gig Sectors:
  • Gig economy jobs projected to reach 9 crore by 2030, but most lack social security and formal benefits.
• Urban Job Distress:
  • Automation and post-pandemic migration have widened rural–urban employment gaps.
• Low Female Participation:
  • Female Labour Force Participation Rate (FLFPR): below 35% (PLFS 2024) despite growing education levels.

Need for a Unified Employment Framework:

• Fragmented Schemes: Existing job, skill, and welfare programmes operate in silos, reducing efficiency.
• Demographic Urgency: Delay in reforms may erode the demographic dividend opportunity.
• Economic Inclusivity: A unified policy can ensure balanced, gender-sensitive, and tech-driven employment.
• Policy Coherence: Aligns trade, industrial, and labour policies toward measurable job outcomes.

Major Government Initiatives (Ongoing):

• Skill India Mission & PMKVY:
  • Target to skill 40 crore youth through short-term and industry-oriented courses.
• National Career Service (NCS) Portal:
  • A digital employment exchange linking job seekers, employers, and counsellors.
• Production-Linked Incentive (PLI) Scheme:
  • Promotes manufacturing-led employment via performance-based sectoral incentives.
• Labour Codes (2020):
  • Consolidated 29 labour laws into 4 codes for ease of compliance and enhanced worker protection.
• Gig and Platform Worker Schemes:
  • Expanding social security coverage to informal and gig sector workers.

Way Forward:

• Integrated National Employment Policy:
  • Merge central and state employment programmes into a coordinated framework.
• MSME and Gig Worker Focus:
  • Provide credit access, digital enablement, and safety nets for these job-rich sectors.
• Skill–Industry Alignment:
  • Reform higher education and vocational training to match AI, robotics, and green industry demands.
• Inclusive Job Creation:
  • Introduce urban employment guarantees and women-centric job incentives.
• Real-Time Labour Data:
  • Create a Unified Labour Observatory for real-time monitoring of workforce dynamics.

4. IUCN World Conservation Congress 2025

Context

India is set to release its first-ever National Red List of Endangered Species at the IUCN World Conservation Congress (WCC) 2025, scheduled in Abu Dhabi, UAE. This marks a major milestone in India’s biodiversity conservation framework, aligning national efforts with global sustainability goals.

About IUCN World Conservation Congress 2025

• Organiser: International Union for Conservation of Nature (IUCN)
• Nature: A quadrennial global summit bringing together governments, civil society, indigenous communities, scientists, and the private sector.
• Objective: To determine global priorities for biodiversity protection, climate action, and sustainable development.
• Host Country: United Arab Emirates (UAE)
• Previous Edition: Held in Marseille, France (2021), focusing on post-pandemic recovery and climate resilience.

Historical Background

• The first IUCN Congress was convened in 1948, the same year IUCN was established.
• India has been an IUCN State Member since 1969 and has consistently contributed to global biodiversity and conservation dialogues.

Themes of IUCN Congress 2025

• Scaling Up Resilient Conservation Action: Enhancing ecosystem restoration and species protection initiatives.
• Reducing Climate Overshoot Risks: Strengthening global climate mitigation to prevent ecological tipping points.
• Delivering on Equity: Ensuring inclusivity and community participation in conservation efforts.
• Transitioning to Nature-Positive Economies: Promoting circular economy, sustainable production, and green finance.
• Disruptive Innovation and Leadership: Leveraging technology, AI, and youth engagement for conservation breakthroughs.

5. Arunachal Pradesh Launches First Commercial Coal Mine at Namchik-Namphuk

Source: Mint

Context

Arunachal Pradesh has launched its first-ever commercial coal mining operation at the Namchik-Namphuk coal block in Changlang district, marking a major step toward harnessing the state’s natural resources and supporting India’s Atmanirbhar Bharat (self-reliant India) energy strategy.

About Namchik-Namphuk Coal Block

• Location: Changlang district, southeastern Arunachal Pradesh, within the Upper Assam coal belt.
• Reserves: Estimated 1.5 crore tonnes of coal reserves, enabling long-term production.
• Significance:
  • Will create local employment and help curb illegal coal extraction in the region.
  • Developed under the eco-sensitive initiative “Mission Green Coal Regions”, focusing on land reclamation and afforestation post-mining.
  • Aligned with the PM EAST Vision — Empower, Act, Strengthen, Transform — to promote inclusive and balanced development in the Northeast region.

About Commercial Coal Mining in India

• Definition: Commercial coal mining allows private companies to extract and sell coal in the open market, ending Coal India Ltd.’s monopoly.
• Origin:
  • Introduced under the Coal Mines (Special Provisions) Act, 2015.
  • Operationalised in 2020 as part of the AatmaNirbhar Bharat reforms.
• Objective:
  • Enhance competition and efficiency in coal production.
  • Strengthen energy security and self-reliance.
  • Attract private investment and create jobs in the mining sector.

Banking and Finance

1. India Considers Early Warning Framework to Prevent Corporate Insolvency

Source: Mint

Context

The Ministry of Corporate Affairs and the Insolvency and Bankruptcy Board of India (IBBI) are exploring the introduction of a pre-insolvency early warning system aimed at identifying financial distress signals before defaults occur. This follows a suggestion by the Supreme Court during the Mansi Brar Fernandes vs Shubha Sharma & ANR case.

Key Highlights:

Objective

• Enable companies and lenders to monitor early signs of financial distress.
• Pre-empt insolvency rather than addressing it post-default under the current Insolvency and Bankruptcy Code (IBC).
• Reduce load on the National Company Law Tribunal (NCLT) by resolving issues before formal proceedings.

Proposed Features

• Early stress indicators: Financial ratios, continuous disclosure obligations, sector-specific red flags.
• Mandatory risk reporting: Directors and auditors may need to report distress signs to regulators and creditors.
• Pre-insolvency mediation and restructuring: Structured platforms for promoters, creditors, and regulators to explore solutions before default escalates.
• Sector-based triggers: IBBI could introduce industry-specific early interventions.

Insolvency and Bankruptcy Board of India (IBBI)

The Insolvency and Bankruptcy Board of India (IBBI) is the key regulatory authority overseeing India’s insolvency resolution framework under the Insolvency and Bankruptcy Code (IBC), 2016. It plays a critical role in maintaining creditor confidence, improving the ease of doing business, and strengthening the financial system’s stability.

About IBBI

• Establishment: 1st October 2016
• Statutory Authority Under: Insolvency and Bankruptcy Code (IBC), 2016
• Headquarters: New Delhi
• Parent Ministry: Ministry of Corporate Affairs (MCA)

2. RBI’s AI Committee Report Sets Roadmap for Ethical, Responsible, and Inclusive Use of AI in Indian Banking

Source: BS

Context

The Financial Regulation and Ethics in AI (FREE) Committee report by the Reserve Bank of India (RBI) provides a framework for harnessing AI in banking while managing risks and ethical challenges. The report aims to balance innovation with accountability, ensuring AI adoption drives financial inclusion, operational efficiency, and improved risk management.

Key Highlights:

• Governance and Accountability:
  • Strong governance mechanisms for AI adoption in banks.
  • Clear accountability for AI models and policy oversight.
  • Banks expected to monitor, report, and mitigate algorithmic bias to ensure fairness, diversity, and inclusivity.
• Opportunities for Banking:
  • Faster loan processing and credit scoring.
  • Improved risk management and regulatory compliance.
  • Integration with India’s Digital Public Infrastructure (Aadhaar, UPI, account aggregators) to expand credit availability and financial inclusion.

Critical Implementation Areas:

• Vendor Liability & Responsibilities:
  • Responsibility allocation between banks and AI vendors needs clarity.
  • Pre-market assessments and robust contracts are currently unspecified, requiring shared frameworks to avoid disputes.
• Data Readiness:
  • High-quality data and upgraded legacy systems are essential.
  • Cloud migration and compliance with BCBS 239 principles recommended for data governance, integrity, and a single source of truth.
  • Collaboration between banks and regulators needed to standardize and share costs.
• Sector-Specific AI Models:
  • Tailored AI solutions for banking and public infrastructure present efficiency and inclusion opportunities.
  • Challenges: model ownership, data privacy, and secure data sharing.
• Metrics for Fairness:
  • Banks and RBI must define measurable standards for fairness, diversity, and inclusivity in AI outcomes.

Significance / Implications:

• Marks a watershed moment in Indian banking, formalizing AI governance while encouraging innovation.
• Provides a clear roadmap for integrating AI with financial inclusion, particularly through digital public infrastructure.
• Encourages banks to adopt a proactive approach to ethical AI, mitigating bias, ensuring fairness, and strengthening trust.
• Success depends on collaboration among banks, vendors, and regulators, particularly on data quality, model governance, and privacy protection.

3. DARPG Rankings Spotlight Customer Service Improvements in Indian Banking and Insurance

Context

The Department of Administrative Reforms and Public Grievances (DARPG) monitors and ranks government ministries and departments based on the redress of citizen complaints via the Centralised Public Grievance Redress and Monitoring System (CPGRAMS).

Financial sector entities, particularly under the Department of Financial Services (DFS), are seeing significant improvements in grievance handling.

The rankings encourage better customer service, faster grievance resolution, and improved public trust in banks and insurers.

Key Highlights:

4. RBI’s Digital Payment Authentication Overhaul to Enhance Security and User Convenience

Source: TOI

Context

India’s digital payments ecosystem has grown rapidly, but concerns over fraud and cyber risks remain. The Reserve Bank of India (RBI) has issued new digital payment directions, effective April 2026, introducing a risk-based authentication (RBA) framework for banks. The framework aims to strengthen security, reduce consumer friction, and align India’s payment system with international best practices.

Key Highlights:

• Shift from OTP-centric system:
  • Maintains mandatory two-factor authentication (2FA).
  • Moves away from a static one-time password (OTP) approach to dynamic, risk-based checks.
• Risk-Based Authentication Features:
  • Uses signals such as device compromise, transaction behaviour, location, and history to detect anomalies.
  • Allows transaction-specific measures, reducing false rejections and enhancing fraud detection.
  • Additional verification applied only when transactions appear suspicious (e.g., new device, odd timing, overseas).
  • Routine transactions like bill payments and small purchases remain seamless.
• Alternative Authentication Methods:
  • Banks can offer biometrics, device-binding, or other methods as one of the two authentication factors.
  • Supports a layered, zero-trust approach, improving security without creating friction.
• Implementation Challenges:
  • Banks may need to upgrade systems to incorporate AI-driven fraud detection and behavioural analytics.
  • Potential rural-urban divide due to limited smartphone access in rural areas; OTPs remain important.
  • Legal and regulatory considerations must be addressed alongside technical upgrades.

5. RBI May Allow Real Estate Projects to Access Offshore Loans to Boost Dollar Inflows

Source: ET

Context

Historically, the Reserve Bank of India (RBI) has resisted allowing external commercial borrowings (ECBs) in real estate due to lessons from the 1997 Asian financial crisis, where foreign currency debt in property markets caused major economic disruptions in Thailand, South Korea, and Indonesia. RBI’s draft ECB policy now signals a major shift, proposing that all real estate projects eligible for foreign direct investment (FDI) can access ECBs.

Key Highlights:

• Eligibility Expansion:
  • Previously, ECBs were limited to large projects such as industrial parks, integrated townships, and SEZs.
  • The draft allows any real estate project approved for FDI to raise ECBs.
  • ECBs will not be allowed for “real estate business” (trading in properties) or construction of farmhouses, aligning with FDI restrictions.
• Motivation for the Change:
  1. Boost Dollar Inflows:
     • ECBs can increase dollar supply, countering pressures from foreign portfolio investor (FPI) sell-offs and export tariffs.
  2. Real Estate Sector Maturity:
     • Regulatory reforms like RERA and REITs have deepened transparency and risk management.
  3. Industry Lobby:
     • Entry of large corporates into real estate projects has likely influenced policy direction.
• Lender Relaxation:
  • Current rule: ECB lenders must comply with FATF or IOSCO regulations.
  • Draft proposal: Any person resident outside India can be a “recognised lender,” simplifying cross-border lending.
• Business Implications:
  • Land Acquisition: Builders can use ECBs to purchase land for commercial or residential projects, reducing reliance on Joint Development Agreements (JDAs).
  • LLPs and NRIs: Limited liability partnerships (LLPs) can borrow from NRI partners, expanding funding options.

6. India Expands UPI Reach to Qatar

Source: BL

Context

India has extended the international reach of its Unified Payments Interface (UPI) by launching the facility at Lulu Group stores in Qatar, following its introduction at duty-free outlets in Hamad International Airport last month. This marks another milestone in India’s effort to globalize its digital payment ecosystem through NPCI International Payments Ltd (NIPL).

Key Highlights:

• Launched by: Piyush Goyal, Union Minister of Commerce and Industry.
• Partnership: NPCI International Payments Ltd (NIPL), Qatar National Bank (QNB), and Japanese payment gateway NETSTARS.
• Purpose: To enable seamless, real-time, and low-cost UPI payments for Indian residents and tourists in Qatar.
• Significance:
  • Qatar becomes the 8th country to accept UPI payments.
  • Aims to strengthen India–Qatar trade and financial integration.
  • Facilitates faster, cost-effective cross-border capital movement and remittances.
• Beneficiaries: Around 8.3 lakh Indians living in Qatar, who will now experience faster and cheaper money transfers.

About Unified Payments Interface (UPI)

• Launched: 2016 by the National Payments Corporation of India (NPCI).
• Function: Enables instant, real-time fund transfers between bank accounts through mobile platforms using QR codes or phone numbers.

Facts To Remember

1. Takaichi set to be Japan’s first woman PM

Conservative Sanae Takaichi hailed a “new era” on Saturday after becoming head of Japan’s ruling party, putting her on course to become the country’s first woman Prime Minister.

2. PM Modi launches ₹62,000-crore schemes targeted at Bihar youth

Prime Minister Narendra Modi on Saturday launched various youth-focused initiatives estimated at more than ₹62,000 crore, with a focus on poll-bound Bihar, from New Delhi.

3. Veteran Congress leader Rameshwar Dudi passes away

A veteran Congress leader and former Leader of the Opposition in the Rajasthan Assembly, Rameshwar Dudi, died at his residence in Bikaner after a prolonged illness. He was 62.

4. Ekta and Soman bag silver; Praveen wins a bronze as India swells tally

Ekta Bhayan became the 18th medallist as India surpassed its best-ever performance at the World Para Athletics Championships on the penultimate day of action here.

5. Manish and Vaishnavi are national champions

Manish Sureshkumar and Vaishnavi Adkar were authoritative in emerging as champions in the Fenesta National tennis championship.

6. India signs off with four medals on final day

India won four medals to wrap up its most successful outing ever at the World Para Athletics Championships, finishing with 22 medals on a dramatic final day that saw medals being upgraded and a sprint run again because of technical faults.

7. INDIA FINISH WITH ‘SILVER LINING’

Girl power drove India’s medal rush on the final day of the World Para Athletics Championships, with Simran Sharma and Preethi Pal lighting up the track with their silver-winning performances before javelin thrower Navdeep Singh concluded the hosts’ successful campaign by achieving another podium finish, winning a silver medal at the JLN Stadium evening.

8. Telangana Tops UPI Usage Intensity; Peer-to-Merchant Transactions Driving Cash Decline

The Unified Payments Interface (UPI) has emerged as India’s most widely adopted digital payments platform, driving a structural shift from cash to digital transactions. Its adoption is reshaping payment behaviour, particularly for low-value, everyday transactions, and contributing to the decline in cash demand across the economy.

9. India adds nearly 17 crore jobs in six years as unemployment dips to 3.2%

Around 17 crore jobs have been added to the workforce in India over six years. As per the Labour and Employment Ministry, employment in India rose to 64 crore 33 lakh in 2023-24 compared to 47 crore 50 lakh in 2017-18, a net addition of 16 crore 83 lakh jobs over six years.

Daily Current Affairs Quiz
7 October, 2025

National Affairs

1. NCRB Data on Crimes Against Children 2023

Source: TH

Context

The National Crime Records Bureau (NCRB) data for 2023 revealed that crimes against children recorded the sharpest increase in Assam, Rajasthan, and Kerala, even as the national average rose by 25%. These trends reflect both policy-driven interventions and improvements in classification and reporting of offences against minors.

National Overview

• Overall crimes against children in India rose by 25% in 2023 compared to the 2018–2022 average.
• However, Assam, Rajasthan, and Kerala saw exceptional increases ranging from 70% to over 100%, each driven by different underlying factors.

State-Wise Highlights

2. Indian Navy Commissions INS Androth

Source: News on Air

Context

The Indian Navy commissioned INS Androth, the second Anti-Submarine Warfare Shallow Water Craft (ASW-SWC), at the Naval Dockyard in Visakhapatnam. The commissioning marks a step forward in strengthening India’s coastal anti-submarine warfare capabilities.

Key Highlights:

Vessel Details:

• Length: 77 meters | Weight: ~1,500 tonnes
• Built with over 80% indigenous content by Garden Reach Shipbuilders and Engineers (GRSE).
• Designed for anti-submarine operations in coastal and shallow waters.
• Equipped with advanced weapons, sensors, and communication systems.

Capabilities:

• Anti-submarine warfare (primary role)
• Maritime surveillance and coastal defense
• Search and rescue operations
• Low-intensity maritime operations
• Long-duration operations in shallow waters

3. PM Modi to Inaugurate India Mobile Congress (IMC) 2025

Source: PIB

Context

Prime Minister Shri Narendra Modi to inaugurate Asia’s Premier Telecom & Tech Event IMC 2025

Theme: “Innovate to Transform”—promoting self-reliance and Atmanirbhar Bharat in telecom and digital technologies.

Key Focus Areas:

• 6G ecosystem (via Bharat 6G Alliance)
• Artificial Intelligence and Machine Learning
• Internet of Things (IoT)
• Cybersecurity for 1.2 billion telecom users
• Satellite communication (Satcom)
• Telecom manufacturing

Major Global Summits & Programs:

• International Bharat 6G Symposium – Showcasing India’s 6G leadership.
• International AI Summit – Impact of AI on networks and services.
• Cyber Security Summit – Strengthening digital infrastructure.
• Satcom Summit – Satellite-based communication services.
• IMC Aspire Programme – Networking for 500 startups with 300 investors.
• Global Startup World Cup – India Edition – 15 finalists compete for $1 million investment.

Awards & Recognitions

1. Nobel Prize 2025

Source: TOI

Context

The 2025 Nobel Prize in Physiology or Medicine has been awarded to Mary Brunkow (USA), Fred Ramsdell (USA), and Shimon Sakaguchi (Japan) for their pioneering discoveries on regulatory T cells (Tregs) and the Foxp3 gene, which govern peripheral immune tolerance. Their work has transformed understanding of autoimmune diseases and opened pathways for therapies in cancer, autoimmunity, and transplantation.

Key Discoveries

• Discovery:
  • The trio identified regulatory T cells, which prevent the immune system from attacking the body’s own cells.
• Significance:
  • This discovery is critical for understanding autoimmune diseases, cancer, and organ transplantation.
  • Opens avenues for new therapies and clinical interventions.
• Individual Contributions:
  • Mary E. Brunkow (USA) - Senior Programme Manager, Institute for Systems Biology, Seattle: Co-identified FOXP3 gene, a marker for regulatory T cells.
  • Fred Ramsdell (USA) - Scientific Advisor, Sonoma Biotherapeutics, San Francisco: Studied genetic mechanisms of immune regulation.
  • Shimon Sakaguchi (Japan) - Distinguished Professor, Osaka University: Discovered CD25+ regulatory T cells and their role in suppressing self-attacking T-cells.

Banking and Finance

1. Private Banks Lag Public Banks in Market Capitalisation

Source: BS

Context

According to S&P Global Market Intelligence, private sector banks in India underperformed their government-owned counterparts in market capitalisation during July–September 2025, primarily due to trade uncertainties and corporate lending exposure.

Market Capitalization (MCAP)

MCAP stands for Market Capitalization. It is a measure of the total value of a publicly traded company’s outstanding shares in the stock market.

Formula:

Market Capitalization (MCAP)=Current Share Price × Total Number of Outstanding Share

Private Sector Banks Performance:

• HDFC Bank: mcap declined by 4.8%.
• ICICI Bank: mcap declined by 6.7%.
• Kotak Mahindra Bank and Axis Bank: Also posted mcap declines in Q3 FY25.
• IndusInd Bank: Worst performer among top 20 lenders, losing 15.7%, partly due to accounting lapses reported earlier in 2025.

Reason for Underperformance:

• Higher exposure to corporate lending, making them sensitive to global trade shocks.
• Trade tensions, particularly US tariffs of 50% on Indian goods, affected market sentiment and exporter confidence.

Public Sector Banks Performance

• SBI (State Bank of India): mcap gained 10%.
• Bank of Baroda: +3.9%
• Punjab National Bank: +2.1%
• Canara Bank: +8.3%
• Indian Bank: +16.7% (highest among top 20 banks by mcap)

Reason for Outperformance:

• Larger share of retail loans, especially in smaller towns and rural areas, insulated them from global trade shocks.
• Domestic drivers such as agricultural output, favorable monsoon, lower inflation, monetary easing, and GST reforms supported growth.

2. SEBI Launches Validated UPI Handles to Secure Investor Payments

Source: Mint

Context

The Securities and Exchange Board of India (SEBI) has introduced @valid UPI handles and the SEBI Check tool to help investors ensure payments are made only to SEBI-registered intermediaries, reducing fraud risk in the securities market.

Key Features:

• Unique UPI IDs:
  • Every SEBI-registered intermediary (brokers, mutual funds, etc.) will now use a UPI handle ending with @valid.
  • Suffixes like .brk (broker) or .mf (mutual fund) indicate the type of intermediary.
• Trust Symbols:
  • Payments via @valid handles display a green triangle with a thumbs-up symbol to confirm authenticity.
  • QR codes with the same symbol allow investors to verify the entity before making payments.

Significance:

• Provides investors with enhanced security and instant verification of intermediaries.
• Reduces risks of fraudulent fund collection by unregistered entities.
• Ensures transparency and accountability in retail investment payments.

3. Indian Banks to Overhaul Business Correspondent (BC) Network

Source: BS

Context

India’s Business Correspondent (BC) network, the world’s largest boots-on-the-ground channel with 2.5 million agents, is set for a significant revamp. The network is critical for delivering banking services to rural and remote areas.

Key Developments:

• The overhaul will be guided by findings from the NIBM study, Impact Assessment Study on the Services Rendered by BCs.
• NIBM (National Institute of Bank Management) was established by the RBI in 1969.

Who Are Business Correspondents (BCs)?

Business Correspondents (BCs) are retail agents appointed by banks to provide banking and financial services in areas where it is not viable for banks to open a full-fledged branch.
They act as representatives of banks and facilitate financial inclusion by delivering basic banking services at the doorstep of customers, especially in rural and remote areas.

Functions of Business Correspondents

BCs provide a range of services on behalf of banks, including:

• Opening of Basic Savings Bank Deposit (BSBD) and PMJDY accounts.
• Facilitating cash deposits, withdrawals, and fund transfers.
• Assisting in Aadhaar seeding and e-KYC verification.
• Disbursing government benefits through Direct Benefit Transfers (DBT).
• Selling insurance, pension, and mutual fund products.
• Providing loan applications, recovery support, and credit counseling.

Regulatory Framework

• The Reserve Bank of India (RBI) regulates BC operations under the Financial Inclusion Plan (FIP).
• Banks are fully responsible for the actions of their BCs, including customer protection and grievance redressal.
• BCs must operate using biometric devices and interoperable digital platforms linked to Core Banking Systems (CBS).

Challenges in the Current BC Model:

• Compensation & Viability:
  • Existing fixed and variable remuneration models are inadequate.
  • Calls for minimum guaranteed commissions, particularly in difficult geographies (North-East, hilly regions, villages <3,000 population).
  • Suggestion to link commission structure to CPI for periodic adjustments.
  • Proposal for a minimum fixed allowance/incentive of ₹5,000/month, independent of account openings/transactions.
• Operational Challenges:
  • High attrition rates among BCs.
  • Need for agent certification, skilling, and training.
  • Absence of a comprehensive registry and geo-tagging of agents.
  • Lack of a structured grievance redressal mechanism.
  • Cost-effectiveness of BC operations for banks under review.

Potential Reforms:

• BCs may be allowed to combine government payments with insurance and other financial/non-financial services, expanding their portfolio.
• Shift from periodic physical audits to digital monitoring for efficiency and real-time oversight.
• NIBM study expected to propose policy and operational improvements to strengthen the ecosystem.

4. RBI Allows Banks to Fund Corporate Acquisitions

Source: BS

Context

The Reserve Bank of India (RBI), on 1 October, proposed allowing banks to finance corporate acquisitions. This is a big change, as banks were previously restricted from this area. The move is expected to make capital cheaper and more available for companies and investors.

Background

• Under the current regulatory framework, banks are barred from financing the acquisition of shares or control in another company.
• The rule was originally introduced to prevent speculative takeovers and limit credit exposure to high-risk acquisition deals.
• With corporate governance and risk management improving, the RBI now seeks to liberalize this area in a controlled manner.

Key Provisions in the Proposal

• Permission for Banks:
  • Scheduled commercial banks (excluding RRBs) may be allowed to extend loans for corporate acquisitions, including mergers and buyouts.
• Conditions:
  • Financing will be subject to prudential exposure norms, due diligence, and board-approved policies.
• Risk Mitigation:
  • The RBI is expected to impose exposure limits, due diligence norms, and long-term funding mandates to address asset-liability mismatches (ALM).
• Eligible Borrowers:
  • Indian corporates, private equity-backed firms, or consortiums engaged in M&A activities.
• Purpose:
  • To enhance liquidity and make capital more affordable for strategic corporate expansion.

Expected Impact on the Market

• Positive Effects:
  • Boost in M&A activity across key sectors such as infrastructure, banking, and manufacturing.
  • Greater access to domestic credit, reducing dependence on expensive offshore loans or NBFC financing.
  • Encourages corporate consolidation, creating larger and more competitive entities.
• Potential Risks:
  • Higher credit concentration risk for banks.
  • Risk of over-leveraged buyouts if lending norms are not tightly monitored.
  • Possible impact on asset quality, necessitating robust risk assessment.

Regulatory Safeguards

The RBI is expected to enforce:

• Exposure ceilings for such loans.
• Stringent credit appraisals and cash flow-based lending norms.
• Compliance with Basel III capital adequacy requirements.
• Regular monitoring and disclosures to ensure transparency.

5. SEBI Considers Bringing Family Offices Under Regulatory

Source: Mint

Context

The Securities and Exchange Board of India (SEBI) has started discussions about potentially regulating family offices in India. This comes as family-run conglomerates and billionaires increasingly influence the capital markets through investments in publicly traded securities.

What are Family Offices?

A family office is a private investment and wealth management entity established by ultra-high-net-worth families to manage their assets, investments, taxation, and philanthropy.

• Single-Family Office (SFO): Manages wealth for one family.
• Multi-Family Office (MFO): Offers services to multiple wealthy families, operating more like a financial advisory firm.

Globally, family offices manage trillions of dollars in assets, acting as institutional investors in equity, debt, and alternative asset markets.

Proposed Measures Under Discussion:

• Disclosure Requirements:
  • Family offices may need to reveal their entities, assets, and investment returns for the first time.
• Regulatory Framework:
  • A separate category for family offices could be created to regulate their investment activities.
• Risk Monitoring:
  • SEBI aims to have greater visibility into investments by family offices and the potential risks these pose to the market.

6. India Launches Foreign Currency Settlement System at GIFT IFSC

Source: Mint

Context

Finance Minister Nirmala Sitharaman inaugurated the foreign currency settlement system at GIFT City International Financial Services Centre (IFSC) during the Global Fintech Fest 2025. The system aims to enable real-time settlement of foreign currency transactions, improve liquidity management, and ensure regulatory compliance.

Key Features

• Real-Time Settlement: Enables instant or same-day settlement of trades and payments in foreign currencies.
• Multicurrency Support: Initially supports USD, GBP, and EUR, with scope to expand to other major currencies.
• Regulated Environment: Operates under the supervision of the International Financial Services Centres Authority (IFSCA).
• Integrated Compliance: Fully compliant with KYC, AML, and FATF global standards.
• Liquidity Management: Improves liquidity for institutions operating in foreign currencies within GIFT City.
• Fintech-Ready: Designed to connect with banks, fintechs, and trading platforms for seamless settlement.

7. Zoho Payments to Launch Physical POS Devices in India

Source: BL

Context

Zoho Payments, the fintech subsidiary of Chennai-based SaaS major Zoho, is set to expand its offerings by launching physical Point of Sale (POS) devices and sound boxes to enable credit/debit card and QR code-based payments. This move marks a significant step in Zoho’s strategy to deepen its presence in the payments and fintech ecosystem.

Fintech (Financial Technology): Definition, Scope & Importance

Fintech, short for Financial Technology, refers to the use of technology and innovation to improve, automate, and simplify financial services. It integrates software, data analytics, and digital platforms to make banking, investing, payments, and insurance more efficient and accessible. Examples – UPI, PhonePe, Google Pay, Paytm.

In simple terms, fintech makes financial services faster, cheaper, and more user-friendly through digital solutions.

Point of Sale (POS) Devices

A Point of Sale (POS) device is a machine or system used by merchants to accept payments from customers at the time of purchase. It serves as the final touchpoint in a sales transaction, allowing payments through credit cards, debit cards, UPI, or mobile wallets instead of cash.

Key Features of POS Devices

• Instant Digital Payment Processing
  Enables card or UPI-based transactions within seconds.
• Receipts Generation
  Prints or sends digital receipts to customers.
• Inventory & Billing Management
  Advanced POS systems integrate with software to manage stock and sales.
• Data Recording
  Stores transaction data for accounting and analytics.
• Connectivity
  Works via internet, Wi-Fi, or SIM-based network for portability.

8. RBI Slaps Penalties on American Express and HDB Financial Services

Source: ET

Context

The Reserve Bank of India (RBI) has imposed monetary penalties on American Express Banking Corp and HDB Financial Services Ltd for violating regulatory guidelines. The action was taken after statutory inspections and supervisory evaluations revealed instances of non-compliance.

Key Highlights:

• American Express Banking Corp:
  • Penalty: ₹31.80 lakh
  • Violation: Non-compliance with the RBI’s Credit Card and Debit Card – Issuance and Conduct Directions.
  • Issue: Failed to promptly reverse credit balances to customers’ accounts arising from refunds or failed/reversed transactions.
• HDB Financial Services Ltd:
  • Penalty: ₹4.2 lakh
  • Violation: Breach of RBI’s Know Your Customer (KYC) Directions, 2016.
  • Issue: Failed to obtain mandatory PAN or Form 60 for certain loan accounts.
• RBI clarified that these penalties relate to regulatory non-compliance and do not impact the validity of customer transactions or agreements.

RBI Norms Involved

1. Credit Card and Debit Card – Issuance and Conduct Directions, 2022
   • Mandates timely refund/reversal of failed transactions and transparent customer communication.
2. Know Your Customer (KYC) Directions, 2016
   • Requires verified identification, including PAN or equivalent documentation, before granting loans or opening accounts.
3. Penalty Framework under Banking Regulation Act, 1949
   • RBI can impose monetary penalties after inspection and due process (including show-cause notice and response evaluation).

9. Bandhan Bank Integrates with Bharat Connect for Digital EMI Repayment

Context

Bandhan Bank has partnered with Bharat Connect, the digital payments platform of NPCI Bharat BillPay Ltd. (NBBL), to streamline EMI repayments for its loan customers. This move aims to strengthen the bank’s digital-first approach and promote financial inclusion across India.

Key Highlights:

• Digital Channels: Customers can repay through:
  • Bandhan Bank Mobile App (mBandhan)
  • Retail Internet Banking (RIB)
  • 700+ apps and websites connected via Bharat Connect.
• Integration Benefits:
  • Reduces missed payments and delays.
  • Provides a smooth, repeatable, and user-friendly process.
  • Strengthens Bandhan Bank’s digital ecosystem.
• Financial Inclusion: The collaboration leverages Bharat Connect’s 5 million offline agents nationwide, improving accessibility to digital repayment channels.

Agriculture

1. Mission for Atmanirbharta in Pulses

Context

The Union Cabinet approved a ₹ 11,440 crore Mission for Atmanirbharta in Pulses, aimed at boosting domestic pulse production, reducing import reliance, and strengthening India’s food security, nutrition, and environmental sustainability.

Pulses are central to the Indian diet, providing protein and micronutrients, but India remains dependent on imports:

• 2024-25 imports: 7.3 million tonnes (mt), worth $5.5 billion, surpassing the 2016–17 record of 6.6 mt.
• Projected demand-supply gap: 15.7 mt by 2030, narrowing to 4.5 mt by 2047 (NITI Aayog report).

Challenges in Pulse Production

• Low productivity: India produces 27.4% of global pulses but has the lowest yield among top 10 producers, at 0.74 t/ha—less than half of Ethiopia or Canada.
• Cultivation constraints: Pulses are grown on marginal lands with limited irrigation and fertilizer use.
• Limited acreage: Large areas, such as rice-fallow lands, remain underutilized.
• Post-harvest losses: Storage challenges lead to 5–7% losses, affecting availability and price stability.

Mission Interventions (2025–26 to 2030–31)

• Seed and Variety Development
  • Distribute 12.6 million quintals of certified seeds.
  • Provide 8.8 million free seed kits to farmers.
  • Promote climate-resilient and high-yield varieties.
• Expansion of Cultivable Area
  • Add 3.5 million hectares, mainly rice-fallow lands.
  • Encourage intercropping pulses with sugarcane in Maharashtra and Uttar Pradesh.
  • Using just one-third of rice-fallow lands in 10 states could increase output by 2.85 mt.
• Minimum Support Price (MSP) and Procurement
  • Assured procurement of tur (pigeon pea), urad (black gram), and masoor (lentil) at MSP for four years.
  • Incentivises farmers to diversify from water-intensive crops like paddy.
• Post-Harvest Management and Value Addition
  • Set up 1,000 processing and packaging units with subsidies up to ₹ 25 lakh per unit.
  • Reduce storage losses, add value, and stabilise prices.
• Institutional Support
  • Strengthen Farmer Producer Organisations (FPOs).
  • Promote mechanisation, soil health interventions, and biofertilisers.
  • Provide adequate credit facilities and technical support.

Benefits

• Enhances domestic pulse production, reducing import dependence.
• Improves farmer income and incentivises crop diversification.
• Promotes sustainable agriculture: pulses fix nitrogen in soil, require less water, and reduce reliance on chemical fertilizers.
• Supports nutrition security, particularly in protein-deficient diets.

Facts to Remember

1. Jilly Cooper, British best-selling author of racy romance, dies at 88

British author Jilly Cooper known for her chronicles of class and sex in risqué novels, including Rivals and Riders, has died, her agent and family.

2. Samson is official ambassador for Premier League in India

Indian cricketer Sanju Samson has been appointed as the official ambassador for the Premier League in India. He met former England striker Michael Owen during a Premier League fan engagement event in Mumbai.

3. Triple delight for Pramod Bhagat

Ace Indian para shuttler Pramod Bhagat clinched three titles at the first Abia para badminton international tournament in Abia, Nigeria recently.

4. Global Fintech Fest 2025

The 6th edition of Global Fintech Fest (GFF) will begin in Mumbai today. Union Finance Minister Nirmala Sitharaman will participate in the inaugural session of the festival. ‘Empowering Finance for a Better World Powered by AI’ is the theme for this year’s festival.

5. Power Minister Manohar Lal to attend G20 Energy meet in South Africa

Power Minister Manohar Lal will participate in the G20 Energy Transitions Ministerial meeting to be held in KwaZulu-Natal Province in South Africa. According to the Ministry of Power, the meeting is being organised under the South African G20 presidency.

6. Silver Jubilee Edition of FICCI FRAMES Inaugurated in Mumbai

Speaking at the inauguration, Mr Jaju highlighted the remarkable growth of the media and entertainment industry over the past 25 years. He said the industry has grown tenfold from 25 thousand crore rupees to two lakh 50 thousand crore rupees.

7. Maharishi Valmiki’s Teachings Will Continue to Illuminate Generations: PM Modi

Valmiki Jayanti is being celebrated in different parts of the country today. The day marks the birth anniversary of Maharishi Valmiki, the author of Ramayana. Maharishi Valmiki is also revered as the ‘Adi Kavi’ or first poet of the Sanskrit language.

8. Election Commission to Conduct Pan-India Special Intensive Revision of Voter Rolls

Chief Election Commissioner Gyanesh Kumar has said that the Election Commission has already decided to conduct a Special Intensive Revision (SIR) exercise throughout the country.

Daily Current Affairs Quiz
8 October, 2025

National Affairs

1. People’s Plan Campaign (PPC) 2025–26

Source: PIB

Context

The People’s Plan Campaign (PPC) is an annual initiative launched by the Ministry of Panchayati Raj to strengthen participatory, transparent, and accountable local governance. It seeks to ensure comprehensive planning and effective delivery of development schemes at the Gram Panchayat, Block Panchayat, and District Panchayat levels. The 2025–26 edition was formally launched on 2nd October 2025 across all States and Union Territories under the theme: “Sabki Yojana, Sabka Vikas”.

Key Features

Gram Panchayat Development Plan (GPDP)

• Gram Panchayats prepare GPDPs for economic development and social justice, reflecting community needs and priorities.
• The planning process is participatory, transparent, and inclusive, involving Gram Sabhas, frontline workers, Self-Help Groups (SHGs), and community organizations.
• Plans align with the 29 subjects in the Eleventh Schedule of the Constitution and are linked to Sustainable Development Goals (SDGs).

Multi-Level Planning

• Block Panchayat Development Plans (BPDPs) and District Panchayat Development Plans (DPDPs) are prepared at intermediate and district levels.
• Integrates Village Prosperity and Resilience Plans (VPRPs) prepared by SHG federations for holistic development.

Objectives of PPC

• Strengthen people’s participation in local development.
• Ensure convergence of Central, State, and local schemes.
• Promote gender-responsive governance through active involvement of Women Elected Representatives (WERs) and women community members.
• Improve transparency and accountability through public information campaigns and disclosure of finances and schemes on Gram Panchayat offices and public boards.

Digital & Monitoring Tools

• Use of digital platforms such as eGramSwaraj, Meri Panchayat App, Panchayat NIRNAY to track progress.
• Planning guided by Panchayat Advancement Index (PAI); deliberations improved using SabhaSaar tool.

Special Focus Areas

• Tribal empowerment under Adi Karmayogi Abhiyaan.
• Efficient utilization of unspent Central Finance Commission grants.
• Strengthening Panchayats’ Own Source Revenue (OSR).

2. PM-SETU (Prime Minister’s Scheme for Empowerment through Technology Upgradation)

Source: PIB

Context

The Prime Minister of India recently launched the PM-SETU (Prime Minister’s Scheme for Empowerment through Technology Upgradation) — a landmark initiative to modernize India’s Industrial Training Institutes (ITIs) and align skill development with industry and global employment needs.

Overview

• Full Form: Prime Minister’s Scheme for Empowerment through Technology Upgradation (PM-SETU)
• Launched by: Prime Minister of India
• Nodal Ministry: Ministry of Skill Development and Entrepreneurship (MSDE)
• Type: Centrally Sponsored Scheme
• Project Duration: 2025–2028
• Total Outlay: ₹60,000 crore (shared by Centre and States)

Aims & Objectives

• Upgrade 1,000 government ITIs across India with advanced facilities.
• Align vocational training with current and future industrial skill requirements.
• Build a globally competitive and digitally empowered workforce.
• Bridge the gap between classroom learning and industry employability.

Key Features

• Hub-and-Spoke Model:
  • 200 ITIs to serve as Hubs, each connected with 4 Spokes (total 800).
  • Hubs to function as central innovation and resource centres.
• Modern Infrastructure:
  • Integration of smart classrooms, digital learning tools, advanced machinery, and innovation labs.
• Industry Collaboration:
  • “Government-owned, Industry-managed (GOIM)” model.
  • Partnerships with CII, FICCI, and local industry associations for training, internships, and placement.
• Skill Innovation Ecosystem:
  • Hubs to act as centres for trainer training, R&D, production, and start-up incubation.
• Sectoral Coverage:
  • Focus on manufacturing, agriculture, hospitality, renewable energy, and new-age technologies like AI, robotics, and green tech.

3. Indian Radio Software Architecture (IRSA) Standard 1.0 Launched

Source: News on Air

Context

The Defence Research and Development Organisation (DRDO) has launched the Indian Radio Software Architecture (IRSA) Standard 1.0, marking a major step toward standardising and modernising India’s defence communication systems.
The framework aims to promote interoperability, self-reliance, and technological integration across the Army, Navy, and Air Force.

About IRSA Standard 1.0

• IRSA 1.0 is India’s first national software architecture standard for Software Defined Radios (SDRs) used by the Indian Armed Forces.
• It establishes a unified framework for developing, integrating, and upgrading secure and interoperable military communication systems.

Developed By

• Defence Research and Development Organisation (DRDO)
• Integrated Defence Staff (IDS)
• Tri-Services (Army, Navy, Air Force)

Objectives

• Ensure interoperability among Software Defined Radio (SDR) platforms across all three services.
• Enable waveform portability — allowing communication waveforms to be reused or transferred across systems.
• Support future-readiness through scalable architecture adaptable to new technologies.

Key Features

• Unified Standard:
  • Common software framework for all military SDR platforms.
• Waveform Portability:
  • Enables reuse of existing communication waveforms across platforms and services.
• Scalability:
  • Designed to integrate advanced technologies like AI, 5G, and cognitive radio systems for next-generation warfare.
• Interoperability:
  • Ensures seamless communication across Army, Navy, and Air Force networks.
• Certification Framework:
  • Establishes testing, validation, and security conformance standards to ensure reliability and robustness.

Awards & Recognitions

1. Nobel Prize in Physics 2025

Context

The 2025 Nobel Prize in Physics has been awarded to John Clarke, Michel Devoret, and John Martinis for their pioneering experiments that deepened scientific understanding of the quantum world, particularly the phenomenon of quantum tunnelling.

About the Nobel Prize in Physics

• The Nobel Prize in Physics, first awarded in 1901, recognises outstanding contributions to the field of physical sciences that deepen our understanding of the universe.
• It is awarded annually by the Royal Swedish Academy of Sciences.
• The 2025 prize includes a monetary award of 11 million SEK (≈ ₹8.5 crore).

2025 Laureates

Scientific Contribution

• The trio demonstrated macroscopic quantum tunnelling — a quantum phenomenon observable not just in atomic particles, but in large-scale electrical circuits.
• Their research established that energy in superconducting circuits can be quantised, behaving according to quantum mechanical laws rather than classical ones.

About Quantum Tunnelling

• Quantum tunnelling is a phenomenon where particles such as electrons can pass through energy barriers that they cannot cross under classical physics.
• Example: In classical terms, a ball rolling up a hill without enough energy would roll back — but in quantum mechanics, part of the ball’s wave function tunnels through the barrier, appearing on the other side.
• This principle is critical in semiconductors, nuclear fusion, and quantum devices.

Banking and Finance

1. RBI Holds Back Nationwide Launch of CBDC

Source: ET

Context

The Reserve Bank of India (RBI) has stated it is in no hurry to roll out the Central Bank Digital Currency (CBDC) nationwide for retail users, preferring to observe how other countries implement their digital currencies first. The announcement was made by Deputy Governor Rabi Sankar during the Global Fintech Fest 2025 in Mumbai.

About CBDC (Central Bank Digital Currency)

• CBDC is a digital form of the Indian Rupee, issued and regulated by the Reserve Bank of India.
• It represents legal tender in electronic form, backed by the sovereign, and can be used for payments and settlements just like physical cash.
• It is broadly classified into:
  • Retail CBDC (e₹-R): For individual consumers and merchants.
  • Wholesale CBDC (e₹-W): For interbank and institutional settlements.

RBI’s Current Stance

• Cautious Approach: RBI will continue with limited pilot testing to study user behaviour, technology reliability, and cybersecurity implications.
• Learning from Others: The Bank intends to observe how other central banks — such as the People’s Bank of China (Digital Yuan) and European Central Bank (Digital Euro) — manage implementation challenges.
• Focus Areas: Interoperability with UPI, offline transactions, scalability, and fraud prevention.

Background

• The CBDC pilot project was launched by RBI in December 2022, beginning with wholesale and retail trials in select cities.
• The RBI has since expanded pilots to include offline payments, programmable transactions, and cross-border settlement testing.

2. World Bank Upgrades India’s Growth Outlook to 6.5%

Source: ET

Context

The World Bank, in its South Asia Development Update (October 2025), has revised India’s GDP growth forecast upward to 6.5% for FY2025-26, up from the earlier 6.3%, citing strong domestic demand and the positive impact of GST rate cuts.

Key Highlights:

• Revised Projection: India’s growth for FY26 raised to 6.5% (from 6.3% earlier).
• FY27 Outlook: Trimmed to 6.3%, reflecting tariff uncertainties and weaker external demand.
• Current Momentum: India’s GDP grew 7.8% in Q1 FY26, supported by robust consumption and investment.
• Export Risks: U.S. tariffs—up to 50% on nearly 75% of Indian goods exports—may weigh on manufacturing and external growth.
• Regional Outlook: South Asia’s growth projected to moderate from 6.6% (2025) to 5.8% (2026).
• Positive Drivers: Better rural demand, agricultural recovery, GST simplification, and improved compliance have strengthened domestic resilience.
• Structural Outlook: World Bank emphasized that AI adoption, trade liberalization, and productivity reforms can unlock higher long-term growth potential.

3. RBI Proposes Granular Risk Weighting Norms for Bank Exposures

Source: BS

Context

The Reserve Bank of India (RBI) has released a draft framework revising risk weights for bank exposures to corporates, MSMEs, retail portfolios, and real estate. The move aligns with Basel Committee on Banking Supervision (BCBS) reforms and aims to make capital requirements more risk-sensitive while reducing capital pressure on banks.

Key Highlights:

• Effective Date: April 1, 2027
• Objective: Implement Basel III credit risk reforms in the Indian context, encouraging prudent lending and better capital management.

Risk Weight:

Risk weight refers to the percentage of a bank’s loan or asset value that is considered “risky” for the purpose of calculating how much capital the bank must hold as a safeguard against potential losses.

Risk Weight = How risky an asset is for the bank.

• A higher risk weight means the loan is riskier — so the bank must keep more capital aside.
• A lower risk weight means the loan is safer — so the bank can lend more freely.

Example:

Suppose a bank gives:

• ₹100 crore loan to a central government → Risk weight = 0%
  • Bank need not keep any capital because sovereign debt is considered risk-free.
• ₹100 crore loan to a corporate → Risk weight = 100%
  • Bank must keep capital against the full ₹100 crore exposure.

If the capital adequacy ratio (CAR) requirement is 9%, then:

• For 0% risk weight → Required capital = 0
• For 100% risk weight → Required capital = ₹9 crore

Retail & MSME Portfolio

• Risk Weight: 75% for fund-based and non-fund-based exposures to individuals, groups, or MSMEs.
• Eligibility Criteria:
  • Consolidated group annual sales ≤ ₹500 crore.
  • Individual borrower exposure ≤ ₹7.5 crore.
  • Portfolio must be well-diversified—no single exposure > 0.2% of the retail portfolio.
• Impact: Lower capital requirements for banks’ MSME and retail exposures, encouraging credit flow to small businesses.

Corporate Exposure

• AAA & AA-rated entities: 20% risk weight (lower capital charge).
• BB-rated entities: 100% risk weight.
• Unrated exposures: Higher capital requirements based on the nature of lending.

Specialised Lending

Includes Object Finance, Commodity Finance, and Project Finance categories.

• Unrated exposures:
  • Object/Commodity Finance – 100%
  • Project Finance (pre-operational phase) – 130%
  • Project Finance (operational phase) – 80% (high-quality) / 100% (non-high-quality)

Housing & Real Estate Loans

• Primary Residence Loans:
  • Up to two housing loans per borrower treated as primary.
  • Risk weight based on Loan-to-Value (LTV) ratio:
    • LTV < 50% → 20% risk weight
    • LTV 80–90% → 40% risk weight
• Third Housing Loan: Higher risk weight applied.
• Commercial Real Estate: 150% risk weight.
• Residential Real Estate (construction/development): 100% risk weight.

4. RBI Draft Frameworks on Bank Provisioning and Capital Requirements

Source: BS

Context

On 7 October 2025, the Reserve Bank of India (RBI) released two important draft frameworks aimed at strengthening prudential regulation and improving credit risk management in banks:

• Expected Credit Loss (ECL)-based provisioning norms for stressed loans and securities.
• Frameworks are proposed to take effect from April 1, 2027.

Expected Credit Loss (ECL) Framework

Objective

To replace the current incurred-loss-based provisioning system with a more forward-looking ECL-based model, aligning Indian banking standards with IFRS 9 and global best practices.

Key Features

• Implementation timeline: Begins April 1, 2027; banks get four years (till March 31, 2031) to make additional provisions on the existing book.
• Model Components:
  • Probability of Default (PD)
  • Loss Given Default (LGD)
  • Exposure at Default (EAD)
• Three-stage Classification for Credit Risk:
  • Stage 1: No significant increase in credit risk (SICR); 12-month ECL.
  • Stage 2: Significant increase in credit risk; lifetime ECL.
  • Stage 3: Credit-impaired assets; lifetime ECL.
• Transitional Adjustment:
  • The difference between new ECL-based provisions and current provisions (as of March 31, 2027) will be added back to Common Equity Tier 1 (CET1) capital.
• Asset Classification:
  • NPAs will continue to be classified under existing norms.
  • Provisions, however, will follow ECL calculations.
• Model Risk Management:
  • Banks must adopt model governance principles to ensure accuracy and consistency in ECL computation.

5. RBI Prioritises Use Cases Over Mass Rollout of Digital Rupee

Source: Mint

Context

At the Global Fintech Fest 2025, Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar said that the central bank is prioritising the development of new use cases for the Central Bank Digital Currency (CBDC), or e-rupee, rather than expanding its user base immediately.

Key Highlights:

• Focus on Programmable Use Cases:
  RBI aims to make the e-rupee programmable for specific uses — such as merchant category, geography, or time period.
  The goal is to ensure ease of use even for individuals unfamiliar with technology.
• Government Scheme Integration:
  Programmable CBDC features are being designed to enable direct digital payouts for government schemes and subsidies.
• No Mass Rollout Yet:
  The e-rupee currently has around 7 million users.
  The RBI will wait for other countries to advance their own CBDC systems to ensure cross-border interoperability before scaling up.
• Cross-Border Focus:
  RBI emphasised that the “basic use case” for CBDC will be in cross-border payments, enhancing global settlement efficiency.

New Functionalities Announced

• Mobile-Linked Wallet Payments:
  CBDC wallets can now be linked to mobile numbers, allowing users to make peer-to-peer payments without a bank account.
• Integrated CBDC Access Platform:
  A unified platform under NPCI allows users to access CBDC wallets across multiple banks in one place.
• Solar Credit Trading via e-Rupee:
  Retail users of solar rooftops can now trade energy credits directly through the e-rupee ecosystem.
• Multi-Signatory Accounts on UPI:
  RBI launched a multi-signatory/joint account feature for the Unified Payments Interface (UPI), improving flexibility for households and small businesses.

6. SEBI to Review ‘Fit and Proper Person’ Rule

Context

The Securities and Exchange Board of India (SEBI) informed the Bombay High Court that it will review a controversial provision in its ‘fit and proper person’ criteria that disqualifies key managerial personnel (KMPs) and directors at market intermediaries merely for having a chargesheet filed against them.

This development follows petitions filed in 2023 by leading brokerage firms, including Motilal Oswal Financial Services and Anand Rathi Shares and Stock Brokers, challenging the rule as unconstitutional.

About the ‘Fit and Proper Person’ Criteria

• The rule determines eligibility and integrity standards for entities and individuals associated with SEBI-regulated intermediaries such as brokers, mutual funds, investment advisers, and rating agencies.
• It ensures that those managing or controlling intermediaries are of sound reputation, integrity, and competence.

Background

• The ‘fit and proper person’ framework was first introduced in 2004, and later subsumed under the SEBI (Intermediaries) Regulations, 2008.
• In November 2021, SEBI amended the regulations, introducing automatic trigger-based disqualifications in place of case-by-case assessments.
• Under the new clause (Clause 6, Schedule II), any individual named in a chargesheet or accused of an economic offence is automatically deemed “not fit and proper”.

The Controversial Clause

• Presently, filing of a chargesheet — even without conviction — can automatically disqualify an individual from being considered fit and proper.
• This has raised concerns about fairness and due process, as it penalises individuals before judicial determination of guilt.

SEBI’s Stand

• SEBI told the court that it will re-examine and review the provision to ensure it aligns with principles of natural justice and proportionality.
• The review will balance market integrity with individual rights, preventing misuse while maintaining investor confidence.

7. RBI Draft Ombudsman Scheme 2025

Source: TOI

Context

The Reserve Bank of India (RBI) has released the draft Ombudsman Scheme 2025, aimed at strengthening grievance redressal mechanisms for customers of regulated entities. The draft seeks to provide a cost-effective, non-adversarial, and comprehensive platform for resolving disputes.

Key Highlights:

• Broader powers: The RBI ombudsman will have authority to handle complaints related to any deficiency in service by regulated entities, without any cap on the financial value of disputes.
• Compensation limits:
  • Up to ₹30 lakh for consequential loss.
  • Up to ₹3 lakh for harassment, time lost, or mental anguish.
• Shift in scope: The ombudsman’s role will expand from a primarily advisory and facilitative function to a decisive authority with high compensation powers.
• Comparison with current scheme: The Integrated Ombudsman Scheme currently has a dispute value limit of ₹50 lakh, which will be removed under the new draft.

Significance

• Enhances consumer protection in the financial sector.
• Provides a more robust mechanism for addressing complaints, including high-value disputes.
• Aligns with RBI’s objective of strengthening accountability and trust in regulated entities.

8. PhonePe and Utkarsh Small Finance Bank Launch “Wish Credit Card”

Context

Digital payments platform PhonePe and Utkarsh Small Finance Bank (SFB) have jointly launched the “Wish Credit Card”, aimed at providing affordable and accessible credit to a wider section of users, especially those new to formal credit.

About the “Wish Credit Card”

Issuer: Utkarsh Small Finance Bank
Powered by: Visa Network
Distributed through: PhonePe app

Objective To expand credit inclusion by offering customised, flexible, and digital-first credit card solutions for both urban and semi-urban users.

Key Features

• Instant Digital Issuance: Customers can apply and get the card instantly through the PhonePe app with 100% digital onboarding.
• Customised Credit Limits: Based on user profile and spending behaviour.
• Rewards and Cashback: Offers reward points and cashback on digital payments, shopping, and bill payments.
• Secure Transactions: Enabled with advanced Visa security protocols and real-time transaction alerts.
• Accessibility: Targeted at first-time credit users, helping them build credit history.

9. PayPal Launches “PayPal World” – Global Interoperable Wallet Platform

Context

At the Global Fintech Fest 2025 in Mumbai, PayPal CEO Alex Chriss announced the launch of “PayPal World”, a globally interoperable digital wallet platform that connects domestic digital wallets across countries. The platform’s first payments partner is India’s Unified Payments Interface (UPI).

About PayPal World

A cross-border payment interoperability platform that links domestic digital wallets (like UPI in India, Alipay in China, Venmo in the US, etc.) with PayPal’s global network, enabling seamless international transactions.

10. Fino Payments Bank Settles SEBI Case for ₹5.8 Lakh

Context

Fino Payments Bank has settled a securities law violation case with the Securities and Exchange Board of India (SEBI) by paying a settlement amount of ₹5.8 lakh.

Details of the Case

• Issue:
  • The case pertained to non-disclosure of material information regarding fraudulent activities committed by certain employees, which is a violation under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations.
• Violation:
  • Fino Payments Bank allegedly failed to promptly inform the stock exchanges about incidents of internal fraud — a material event that could impact investor decisions.

Facts To Remember

1. IAF Celebrates 93rd Anniversary with Aerial Display at Hindan Airbase

The 93rd anniversary of the Indian Air Force (IAF) was commemorated at Air Force Station Hindan in Uttar Pradesh’s Ghaziabad today. This Air Force Day celebration included a spectacular aerial display by the Heritage Flight.

2. India to Host 8th International Solar Alliance Assembly in New Delhi from Oct 27–30

India is set to host the 8th Session of the International Solar Alliance Assembly from 27th to 30th October at Bharat Mandapam in New Delhi.

3. India Wins Global Social Security Award; Mandaviya Unveils Draft ‘Shram Shakti Niti 2025’

India has been conferred with the Outstanding Achievement in Social Security Award 2025 by the International Social Security Association.

4. Union Minister Nitin Gadkari Inaugurates India’s First Electric Truck Battery Swapping Station in Sonipat

Union Minister of Roads, Transport and Highways Mr Nitin Gadkari today inaugurated India's first commercial electric truck battery swapping and charging station at the Delhi International Cargo Terminal Private Limited (DICT) in Panchi Gujran village on the GT Road near Ganaur in Sonipat.

5. IT Secretary S Krishnan Launches Smart Agri Quality and Environmental Monitoring Tech

Secretary, Ministry of Electronics and Information Technology, S Krishnan today launched the products on Smart Quality Analysis of Agri Produces and Environmental Monitored Technologies.

6. PM Modi Inaugurates 9th India Mobile Congress; Says Digital Connectivity is no Longer a Luxury

Prime Minister Narendra Modi today inaugurated the ninth edition of the India Mobile Congress 2025, Asia’s largest telecom, media, and technology event at Yashobhoomi in New Delhi.

7. PM Modi hails ₹24,000 Cr rail projects to boost connectivity across four states

Prime Minister Narendra Modi has said that Union Cabinet approval for four key multi-tracking projects of the Indian Railways worth over 24,000 crore across Maharashtra, Madhya Pradesh, Gujarat and Chhattisgarh

Daily Current Affairs Quiz
9 October, 2025

National Affairs

1. Draft National Labour and Employment Policy, 2025

Source: TH

Context

The Union Ministry of Labour and Employment released the draft National Labour and Employment Policy (NLEP) titled Shram Shakti Niti, 2025 for public consultation on October 8, 2025. The policy envisions a fair, inclusive, and future-ready world of work, aligned with India’s aspiration to become a developed nation by 2047.

Key Objective

To establish a universal and portable social security system by integrating major national and state-level welfare and employment databases.

Universal Social Security Framework

The policy proposes creating a universal account integrating:

• Employees Provident Fund Organisation (EPFO)
• Employees State Insurance Corporation (ESIC)
• Pradhan Mantri Jan Arogya Yojana (PM-JAY)
• e-SHRAM portal
• State Welfare Boards

This aims to ensure portability of social security benefits across sectors and geographies, covering formal and informal workers.

Core Vision and Principles

• Rooted in India’s ethos of śrama dharma — dignity and moral value of work.
• Based on the 3Ps Framework: Protection, Productivity, and Participation.
• Strives to balance workers’ welfare with enterprise growth and sustainable livelihoods.

Major Policy Proposals

• Implementation of the Occupational Safety and Health Code with:
  • Risk-based inspections
  • Gender-sensitive standards
  • AI-enabled safety systems
• Convergence of skill development schemes across ministries.
• Single-window digital compliance system with:
  • Self-certification and simplified returns for MSMEs.
• Promotion of green and decent jobs and just transition pathways for affected workers.
• Unified National Labour Data Architecture to enable inter-ministerial coordination and real-time monitoring.

2. PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan)

Source: TH

Context

The Union Ministry of New and Renewable Energy (MNRE) plans to promote India’s flagship solar energy initiative — the PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) scheme — to several African and island nations through the International Solar Alliance (ISA) platform.

PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan)

Launch: 2019 (by Ministry of New & Renewable Energy, Government of India)
Aim: Promote solar energy adoption in the agriculture sector, ensure energy security for farmers, and provide additional income through renewable energy.

Objectives

• Solar Pumps for Irrigation:
  • Solar-powered pumps to reduce dependency on grid electricity and diesel.
• Grid-Connected Solar Plants:
  • Farmers can sell surplus solar power to the grid, generating extra income.
• Decentralized Renewable Power Generation:
  • Support small and medium farmers to set up renewable energy projects on barren/fallow land.

Components

• Component A – Solarization of Grid-Connected Agriculture Pumps:
  • 17.5 lakh pumps targeted by 2022-23.
  • Farmers get subsidy of up to 60–90% of pump cost (depending on landholding).
• Component B – Off-Grid Solar Pumps:
  • Small pumps (≤10 HP) for remote/off-grid areas.
• Component C – Solar Power Plants on Barren Land:
  • Farmers can install grid-connected solar plants (up to 2 MW).
  • Sell power to DISCOMs under feed-in tariff mechanism.

3. NITI Aayog Report: Roadmap on AI for Inclusive Societal Development

Release Date: 2025
Purpose: Outline a strategic plan to leverage Artificial Intelligence (AI) for empowering India’s informal sector workforce through digital inclusion, skilling, and social security integration.

Key Highlights:

Informal Sector

• Massive Workforce Base: ~490 million Indians (~90% of workforce) engaged in informal work, contributing ~50% of GDP (MoLE, 2024).
• Rural Dominance: 80%+ rural workers lack formal contracts or social security; concentrated in agriculture, construction, retail, handicrafts.
• Gendered Informality: Women constitute >55% of informal workforce, especially in home-based work and agriculture.
• Low Productivity & Wages: Average productivity is ~25% of formal sector; over 75% earn <₹10,000/month.
• Rising Urban Informality: ~7.5 million gig/platform workers without labour protection (NITI Aayog, 2022).

Challenges

• Financial Insecurity: Lack of access to affordable credit, insurance, and social protection.
• Limited Market Access: Only 12% of small producers and artisans access digital/organized markets directly.
• Digital & Skill Divide: 70%+ of informal workers lack basic digital literacy.
• Fragmented Policies & Trust Deficit: Overlapping welfare schemes reduce benefits reach and reliability.

Role of AI & Digital Infrastructure

• AI for Financial Inclusion: Enables micro-loans for unbanked or under-documented workers (e.g., SBI YONO, Setu.ai).
• Digital Public Infrastructure (DPI): Platforms like Aadhaar, UPI, and e-Shram provide verifiable worker IDs for targeted benefits.
• Smart Contracts & Blockchain: Transparent wage payments and supply-chain traceability (pilots like Tata Steel Foundation).
• AI-enabled Skilling: Vernacular, voice-based adaptive learning for reskilling via Skill India Digital.
• Predictive Analytics for Welfare: Optimizes delivery of programs like PM Kisan Samman Nidhi.

Need for Urgent Action

• Rising inequality and vulnerability to automation.
• Leveraging the demographic dividend (65% of population <35 years).
• Participation in the global AI economy (potential $957 billion GDP boost by 2035, PwC).
• Address climate and urban risks affecting informal workers.
• Ensure ethical, inclusive AI deployment to avoid reinforcing social biases.

Key Recommendations

• Digital ShramSetu Mission: AI-enabled platform integrating social security, skilling, and livelihoods.
• Sectoral AI Models: Focus on agriculture, construction, retail, and logistics for productivity gains.
• Voice-First & Vernacular AI Interfaces: Bridge literacy and language barriers.
• Public–Private Partnerships (PPP): Scale innovations in informal ecosystems.
• Ethical AI & Data Governance: Responsible AI Charter ensuring transparency, privacy, inclusivity.
• AI Skilling & Micro-Credentials: Continuous upskilling under Skill India 2.0.
• Impact Evaluation Framework: Data-driven assessment of inclusion, income growth, and service delivery.

Award and Recognitions

1. Nobel Chemistry Prize 2025

Source: TOI

Context

The 2025 Nobel Prize in Chemistry was awarded to Susumu Kitagawa (Japan), Richard Robson (Australia/UK), and Omar Yaghi (Jordan/US) for developing metal-organic frameworks (MOFs) — a new class of molecular materials with extraordinary porosity and versatile applications.

About MOFs

• Crystalline materials composed of metal ions and organic molecules forming an ultra-porous network.
• Key Feature: A sugarcube-sized piece can have as much surface area as a football field, enabling massive storage and filtration in a small volume.
• Nicknamed: “Hermione’s handbag” material for its ability to hold huge amounts in tiny spaces.

Laureates

Banking and Finance

1. RBI Unveils Unified Markets Interface (UMI) to Tokenise Financial Assets

Source: TOI

Context

At the Global Fintech Fest 2025, the Reserve Bank of India (RBI) announced the conceptualisation of a Unified Markets Interface (UMI) a new digital infrastructure aimed at tokenising financial assets and enabling settlements via wholesale Central Bank Digital Currency (CBDC). The initiative marks another milestone in India’s ongoing digital finance transformation.

Key Highlights:

• Unified Markets Interface (UMI):
  • Designed to tokenise financial assets, improving the efficiency, transparency, and security of market transactions.
  • Will facilitate CBDC-based settlement for wholesale market participants.
  • Expected to enhance liquidity management and reduce transaction costs in financial markets.
• Complementary Digital Initiatives Launched:
  • UPI Reserve: Introduced as an innovation for liquidity management and high-value UPI transactions.
  • Internet of Things (IoT) Compatibility for UPI: Expands the ecosystem by allowing smart devices to initiate and process real-time digital payments.

Tokenisation

Tokenisation is the process of representing ownership or rights to an asset in the form of a digital token. Each token acts as a digital certificate of ownership that can be traded or transferred securely.

Examples

• Financial assets: Bonds, shares, mutual fund units, or government securities can be tokenised — each token represents a portion (fraction) of the asset.
• Physical assets: Real estate, gold, or artwork can also be tokenised so that multiple investors can hold small digital shares of a high-value asset.

2. PFRDA Plans to Expand Pension Coverage to Agriculture, SHGs, and Gig Workers

Source: BS

Context

The Pension Fund Regulatory and Development Authority (PFRDA) is targeting significant expansion of pension coverage in India, with a focus on underserved sectors such as agriculture, self-help groups (SHGs), and gig/platform workers. The announcement was made by PFRDA Chairman S. Ramann at the Global Fintech Fest 2025.

Key Highlights

• Target Groups:
  • Agriculture Sector: Collaborating with 50,000+ Farmer Producer Organisations (FPOs), each with 300–500 members, to provide pension coverage.
  • Self-Help Groups (SHGs): Encouraging institutional savings and long-term financial planning.
  • Gig/Platform Workers: Exploring schemes tailored for workers on digital platforms like Uber and Urban Company.
• Investment Innovation:
  • PFRDA is considering allowing pension funds to invest in commodities such as gold and silver, following recommendations from internal committees and other regulators.
  • Previous investment guidelines were conservative, focusing primarily on equities, bonds, and government securities.
• Digital Integration & Distribution:
  • Utilize fintech platforms for easier onboarding, especially for informal and platform workers.
  • Ensure interoperability and portability within the National Pension Scheme (NPS) system.
  • Focus on awareness campaigns to increase access and enrollment in underserved communities.

3. RBI Launches Four New UPI Initiatives

Source: ET

Context

The Reserve Bank of India (RBI) launched four new digital payment initiatives at the Global Fintech Festival 2025, aimed at enhancing convenience, interoperability, and digital adoption in the UPI ecosystem.

Key Initiatives

• IoT-Based UPI Payments
  • Enables payments through connected devices such as cars, smart TVs, smart glasses, and EV chargers.
  • Expands UPI beyond smartphones, making transactions more seamless in the Internet-of-Things ecosystem.
• Banking Connect (Interoperable Net Banking Solution)
  • Facilitates interoperability between banks and payment aggregators.
  • Payment Aggregators (PAs) gain access to all participating banks via single integration, reducing technical complexity.
• UPI Reserve Pay
  • Allows users to block part of their credit card limit or pre-sanctioned credit for repeat purchases.
  • Simplifies payments on e-commerce, food delivery, cab aggregators, and other recurring services.
• AI-Based UPI Help
  • AI-powered support system, leveraging NPCI’s Small Language Model (SLM).
  • Offers transaction status checks, complaint resolution, mandate management, and contextual guidance for users.

Additional Features

• Biometric Authentication: Approve UPI payments without entering a PIN.
• Face Authentication via UIDAI: Simplifies onboarding and PIN setup for UPI using Aadhaar-based biometrics.

4. NPCI’s Credit Line on UPI (Clou)

Source: BS

Context

The National Payments Corporation of India (NPCI) launched Credit Line on UPI (Clou) in 2023 to make credit as frictionless as digital payments, enabling users to access a pre-approved credit line directly through their UPI app.

Nearly two years since its launch, adoption remains limited due to regulatory uncertainty, uneven technological readiness, and low borrower awareness.

Key Features of Clou

• Provides pre-approved credit through the UPI interface.
• Targets underserved and new-to-credit segments.
• Designed to leverage digital payment footprints for credit assessment.

Lessons from UPI’s Impact on Credit

• Research by the National Bureau of Economic Research (Shashwat Alok et al.) shows:
  • Between 2015–2019, fintech loans in subprime/new-to-credit segments increased tenfold.
  • A 1% increase in UPI transactions was associated with a 0.73% increase in credit.
  • UPI-enabled digital footprints did not increase defaults, helping lenders identify creditworthy but underserved borrowers.
• Key enablers included low-cost internet and Jan Dhan Yojana accounts, which strengthened digital credit growth.

Challenges for Clou

• Regulatory ambiguity:
  • Unclear classification of Clou loans (personal vs credit card loans).
• Technological gaps:
  • Small lenders lack real-time integration with UPI systems.
• Limited borrower awareness:
  • Many potential users are unaware of Clou or how to access it.

Policy Recommendations

• Unified operational guidelines by RBI and NPCI for loan classification and reporting.
• Standardised data-sharing and consent framework to build trust between lenders and borrowers.
• Support for smaller banks through shared cloud infrastructure or fintech partnerships.
• Open, interoperable, and affordable digital platforms to expand credit access at scale.

5. RBI Urges Inclusive & Innovative Fintechs to Leverage Digital Public Infrastructure

Source: Mint

Context

At the Global Fintech Fest 2025, RBI Governor Sanjay Malhotra called on Indian fintechs to design inclusive, accessible, and innovative financial products, particularly for underserved populations such as senior citizens, individuals with limited digital literacy, and the specially-abled.

Key Directives for Fintechs

• Inclusivity and Accessibility
  • Develop products that are easy-to-use and assistive for vulnerable groups.
  • Ensure no segment is left behind even while serving affluent customers.
• Leverage Digital Public Infrastructure (DPI)
  • Fintechs can scale rapidly using Aadhaar-based identity, UPI, digitized government data, and other public infrastructure.
  • DPI enables targeted solutions for both current and future financial challenges.
• Data-Driven Growth
  • Responsible use of data through:
    • Digital Rupee and CBDC frameworks.
    • Asset tokenization.
    • Account aggregator framework.
  • RBI is setting standards to improve customer onboarding, UI/UX, data security, consent management, and transparency.
• Unified Markets Interface (UMI) & Asset Tokenization
  • RBI has conceptualized UMI, capable of tokenizing financial assets and enabling settlements via wholesale CBDC.
  • Early pilot projects, such as short-term securities tokenization, have shown promising results.
  • Expected benefits include expanded access, enhanced transparency, and improved settlement efficiency.
• AI Integration
  • AI will be integrated into DPI layers to improve user experience, efficiency, and conversational payment systems.

6. RBI Proposes Revision of Loan Risk Weights

Source: ET

Context

The Reserve Bank of India (RBI) has proposed lowering risk weights for various loan categories, linking them to borrower risk profiles.

Goal: Encourage disciplined credit behaviour, improve capital efficiency, and free up more capital for lending.

Key Proposals

7. RBI Digital Payments Initiatives

AI-based UPI HELP

• Purpose: Provides assistance for payments, mandates, and dispute resolution.
• Features:
  • AI-powered support system for checking transaction status, raising complaints, managing mandates.
  • Enhances customer trust by making digital payments secure and easy to access.

IoT Payments with UPI

• Purpose: Enables transactions directly from connected devices.
• Supported Devices: Cars, smart TVs, smart glasses, wearables.
• Functionality:
  • Payments can be initiated using contextual triggers, routines, voice, or text commands.
  • Works across devices or cloud environments within user-defined limits.
  • Ideal for instant payments for fuel, EV charging, and other services.
• Impact: Makes transactions faster, smarter, and frictionless.

Banking Connect

• Purpose: Interoperable net banking solution for smooth payments.
• Features:
  • Enables seamless transactions across banks and payment aggregators.
  • Standardizes merchant onboarding and simplifies digital payment integration.

UPI Reserve Pay

• Purpose: Provides secure control over credit limits for specific purposes.
• Features:
  • Users can block and manage portions of credit limits across merchants and UPI apps.
  • Facilitates repeat purchases and budgeted spending.

8. Aditya Birla Capital Launches AI-Powered Personal Finance Assistant “SimpliFi”

Source: BL

Context

Aditya Birla Capital Ltd (ABCL), a leading diversified financial services group, has launched “SimpliFi”, an AI-powered personal finance assistant on its omnichannel D2C platform — ABCD, to enhance customer experience through personalized financial guidance.

About SimpliFi

• SimpliFi is an AI-driven personal finance assistant designed to help customers manage their finances more intelligently.
• It offers 7 AI-powered features under the “MyTrack” section of the ABCD platform.
• Provides personalized insights across credit, health, and spending, integrating multiple financial products on a single platform.

Key Features

• Personalized Financial Guidance:
  Offers insights on market movements, portfolio status, recommended actions, and goal-based financial planning across multi-asset categories.
• “Know Your Policy” Feature:
  • Decodes any health insurance policy, displaying coverage details and comparative alternatives instantly.
  • Helps customers make informed health insurance choices.
• 360° Protection Suite:
  Includes health-track tools, health-saver card, and benefits such as dental & eye check-ups, pharmacy discounts, and nutrition assistance.
  • Also offers comprehensive personal insurance and a digital will for legacy planning.

9. Gnani.ai Launches Self-Cloned Digital Human at Global Fintech Fest 2025

Source: FE

Context

At the Global Fintech Fest 2025, Gnani.ai, a leading Indian conversational AI company, unveiled a self-cloned Digital Human, marking a major leap in human–AI interaction. The innovation aims to humanize digital communication through realistic, multilingual avatars for financial and enterprise applications.

About the Digital Human

• The Digital Human is created using a user-approved source video and voice reference, built on Gnani HumanOS — the company’s proprietary AI platform.
• It combines sight and sound to make interactions more natural, expressive, and life-like.
• Demonstrated through a live demo, the avatar showcased side-by-side comparisons of real and digital interactions, underlining its practical use cases in customer service and onboarding.

Key Features

• Real-Time Expressive Avatars: Offers realistic lip-sync, micro-expressions, and gaze tracking for authentic engagement.
• Multilingual and Interactive: Supports Indic languages, multilingual code-switching, and emotion controls to deliver contextually relevant experiences.
• Unified AI Framework: Combines cloning, speech synthesis, and fine-grained emotion control for smooth, real-time or pre-recorded communication.
• Low-Latency Performance: Works seamlessly across web, mobile, and kiosk devices, optimized for live customer engagement.
• Privacy-Centric Design: Institutions and employees must sign consent forms before using the digital twin service, ensuring ethical deployment.

Agriculture

1. KisanKraft Launches Nationwide Campaign to Promote Dry Direct Seeded Rice (DDSR) Technology

Source: BL

Context

Agricultural equipment manufacturer KisanKraft Ltd. has announced a nationwide awareness and education campaign to promote its Dry Direct Seeded Rice (DDSR) technology. The initiative will begin on October 10, 2025, from Sitapur, Uttar Pradesh, and continue until December 2025, covering 10 states across India.

About DDSR Technology

• Dry Direct Seeded Rice (DDSR) is an alternative to the traditional transplanting method of paddy cultivation.
• It is grown on non-puddled fields without standing water, making it more water-efficient, cost-effective, and sustainable.
• The technique involves directly sowing rice seeds into dry soil instead of transplanting seedlings from nurseries.

Key Benefits

• Water Efficiency: Reduces water use by 50–60% as there is no puddling or standing water.
• Lower Input Costs: Cuts down on the use of pesticides, fungicides, and fertilisers.
• Reduced Methane Emissions: DDSR produces negligible methane, unlike wetland rice which contributes 8–12% of global methane emissions.
• Improved Soil Health: Encourages crop rotation and intercropping with pulses, enhancing soil fertility.
• Comparable Yields: Achieves similar yields to transplanted rice without compromising productivity.
• Faster Maturity: DDSR varieties mature in 110–140 days, adapting well to diverse soil conditions.

2. Kerala Launches Initiative to Promote Low-Emission Rice-Based Farming Systems

Source: TH

Context

A three-day inception workshop on “Catalysing Transitions to Low-Emission Rice-Based Systems in Kerala” has begun at the College of Agriculture, Vellanikkara, marking a significant step towards climate-resilient and sustainable rice cultivation in the State.

Organisers and Partners

The event is jointly organised by:

• International Rice Research Institute (IRRI)
• Kerala Agricultural University (KAU)
• Centre for Water Resources Development and Management (CWRDM)
• Department of Agriculture, Government of Kerala
• Irrigation Department

The initiative forms part of the Kerala Climate Resilient Agri-Value Chain Modernization Project (KERA), implemented by the Department of Agriculture and Farmers’ Welfare with World Bank support.

Objectives of the Programme

• Promote low-emission rice farming techniques, especially Alternate Wetting and Drying (AWD) — a water-saving technology developed by IRRI.
• Enhance climate resilience and reduce greenhouse gas emissions from paddy cultivation.
• Support sustainable agricultural practices through economic incentives for farmers.

Facts To Remember

1. PM launches Mumbai’s first underground Aqua line 3

Prime Minister Narendra Modi on Wednesday launched the final phase of Mumbai’s first fully underground Metro 3, making the 33.5-km Aqua Line operational, which will connect Aarey in the north to Colaba in the south, aiming to ease congestion on suburban trains and roads.

2. IAF to Receive First Indigenous Tejas Mk1A Fighter Jet

Context

The Indian Air Force (IAF) is set to induct the first Light Combat Aircraft (LCA) Tejas Mk1A, a significant milestone in India’s indigenous fighter aircraft development programme led by Hindustan Aeronautics Limited (HAL).

Daily Current Affairs Quiz
10 October, 2025

National Affairs

1. India Launches National Red List Assessment for Flora and Fauna

Source: BS

Context

India has initiated a landmark National Red List Assessment of Indian Flora and Fauna, aimed at evaluating the extinction risk of nearly 11,000 species of plants and animals by 2030. This first-of-its-kind national exercise will provide a comprehensive picture of species vulnerability and guide evidence-based conservation planning.

Key Highlights

• Objective: To assess the conservation status of India’s flora and fauna and fulfil obligations under the Convention on Biological Diversity and the Kunming-Montreal Global Biodiversity Framework.
• Framework: India’s Vision 2025-2030 prepared by Zoological Survey of India (ZSI) and Botanical Survey of India (BSI) in collaboration with IUCN-India and the Centre for Species Survival.
• Outcome: Publication of National Red Data Books for both flora and fauna by 2030 using IUCN-aligned scientific guidelines.

2. India to Host 8th International Solar Alliance (ISA) Assembly

Source: News on Air

Context

India will host the 8th ISA Assembly from October 27–30, 2025, at Bharat Mandapam, New Delhi. The event will bring together governments, industry players, and financial institutions to accelerate global solar energy deployment.

About International Solar Alliance (ISA)

• Type: Global intergovernmental organisation
• Objective: Promote solar energy for energy access, security, and climate resilience
• Launch: 2015, during COP21 Climate Summit, Paris
• Founding Countries: India & France
• Headquarters: Gurugram, India (first international organisation headquartered in India)

Membership

• 124 members & signatory countries (2025)
• Over 90 full members
• Open to all UN member states after 2020 framework amendment

Key Aims

• Mobilise USD 1 trillion in solar investments by 2030
• Provide clean energy access to 1 billion people
• Install 1,000 GW of solar capacity globally
• Promote low-cost, sustainable, equitable energy systems, especially for LDCs & SIDS

Functions and Initiatives

• Policy & Advocacy: Supports governments via Ease of Doing Solar analytics and annual solar investment reports
• Programmatic Support: Scales solar projects across agriculture, health, transport, and energy; replicates models like PM-KUSUM & PM Surya Ghar internationally

3. AMRAAM Missile

Source: ET

Context

The United States has included Pakistan in a modified arms contract with Raytheon Technologies to supply AIM-120 AMRAAM (Advanced Medium-Range Air-to-Air Missiles).

About AIM-120 AMRAAM

• Type: Beyond-Visual-Range (BVR), radar-guided air-to-air missile
• Developer: U.S. Air Force & Raytheon (1980s)
• Capabilities:
  • Fire-and-forget: Missile autonomously tracks targets after launch
  • Range: Up to 160 km (C8/D3 variants)
  • Speed: Up to Mach 4
  • Guidance: Inertial navigation + active radar homing
  • Platforms: F-15, F-16, F-35, Eurofighter Typhoon, Gripen, etc.
  • Strengths: High precision, multi-target capability, all-weather operations, resistant to electronic countermeasures

4. Gharial Classified as “Critically Depleted” in IUCN’s First Green Status Report

Source: TOI

Context

The International Union for Conservation of Nature (IUCN), in its first-ever “Green Status” assessment, has classified the gharial (Gavialis gangeticus) as “Critically Depleted”, highlighting that the species’ survival depends on restoring free-flowing river habitats and supporting wild breeding in South Asia, particularly India.

Key Highlights:

• Assessment: First-ever IUCN Green Status assessment.
• Conservation Status: Critically Depleted –
  • Assesses species recovery potential, unlike the traditional Red List which focuses on extinction risk.
  • Highlights gharial’s “conservation legacy” but emphasizes dependence on ongoing interventions.
• Population:
  • About 681 adults remain in the wild, with 80% in the Chambal River (UP, MP, Rajasthan).
• Threats:
  • Dam and barrage construction
  • Sand mining
  • Fishing nets and habitat fragmentation
• Conservation Measures Needed:
  • Restoration of free-flowing river stretches
  • Protection of nesting habitats
  • Support for wild breeding programs

Awards & Recognitions

1. Hungarian Writer László Krasznahorkai Wins 2025 Nobel Prize in Literature

Source: IE

Context

The 2025 Nobel Prize in Literature has been awarded to Hungarian novelist László Krasznahorkai, recognised for his “compelling and visionary oeuvre that, in the midst of apocalyptic terror, reaffirms the power of art.” The Nobel Committee praised his philosophical depth, artistic courage, and unique narrative style, which often unfolds in long, uninterrupted sentences.

About the Laureate

• Name: László Krasznahorkai
• Age: 71
• Born: Gyula, southeastern Hungary (near the Romanian border)
• Literary Style: Known for bleakly humorous, dense, and philosophical prose, often written as single-sentence novels reflecting chaos, absurdity, and existential struggle.

About the Nobel Prize

• The Nobel Prize in Literature, established in 1901, honours an author who has produced “the most outstanding work in an ideal direction.”
• Award ceremonies will be held on December 10, the anniversary of Alfred Nobel’s death, in Stockholm, Sweden.

Banking and Finance

1. Razorpay, NPCI, and OpenAI Partner to Launch Agentic Payments on ChatGPT

Source: BS

Context

In a pioneering move blending AI and digital payments, Razorpay, the National Payments Corporation of India (NPCI), and OpenAI have jointly launched Agentic Payments — a feature that enables UPI-powered shopping and payments directly within ChatGPT. The initiative marks a first-of-its-kind integration of conversational AI and India’s UPI ecosystem, bringing AI-driven commerce into mainstream digital payments.

Key Highlights:

• Feature: Agentic Payments allows users to shop and pay seamlessly within ChatGPT without leaving the chat interface.
• Pilot Launch: The feature is currently in its pilot phase, with early partnerships and limited access.
• Banking Partners: Supported by Axis Bank and Airtel Payments Bank, leveraging UPI innovations like UPI Circle and UPI Reserve Pay.
• Technology Base: Built on Razorpay’s payment infrastructure and integrated with ChatGPT’s conversational capabilities to facilitate AI-native UPI transactions.

2. RBI Governor Urges Fintechs to Drive Inclusive Growth Using India’s Digital Public Infrastructure

Source: TOI

Context

Reserve Bank of India (RBI) Governor Sanjay Malhotra urged India’s fintech ecosystem to leverage the country’s Digital Public Infrastructure (DPI) to deliver responsible innovation, promote inclusion, and strengthen India’s journey toward becoming a developed nation by 2047.

Key Highlights:

3. SEBI Reviewing Stock Lending and Borrowing Mechanism (SLBM)

Source: FE

Context

The Securities and Exchange Board of India (SEBI) is reviewing the Stock Lending and Borrowing Mechanism (SLBM) to make it more functional and increase market participation. Despite being allowed, short-selling through SLBM remains minimal in India.

Stock Lending and Borrowing Mechanism (SLBM)

The Stock Lending and Borrowing Mechanism (SLBM) is a framework in the Indian stock market that allows investors to temporarily lend or borrow securities. It is mainly used to facilitate short selling, hedging, or market-making.

How It Works

• Lender: A shareholder (like a mutual fund, insurance company, or retail investor) lends shares to a borrower in exchange for a fee.
• Borrower: Usually a trader or institution who wants to short-sell the shares or meet delivery obligations in the market.
• Duration: The lending is temporary, with a pre-agreed return date.
• Collateral: The borrower provides collateral (cash or securities) to the lender to cover risk.
• Settlement: After the loan period ends, the borrower returns the shares and the lender receives the collateral back along with the lending fee.

Purpose & Benefits

• Supports hedging strategies for institutional investors.
• Enables short selling, which helps in price discovery.
• Provides extra income to long-term investors through lending fees.
• Improves market liquidity by making shares available for trading.

4. RBI Lifts Ceiling on Loans Against Corporate Debt

Context

The Reserve Bank of India (RBI) has removed restrictions on lending against listed corporate debt securities to deepen the corporate bond market, improve liquidity, and facilitate credit access for investors without forcing them to sell holdings.

Key Highlights:

• Loan Limits Removed:
  • Previously, banks could lend only up to ₹20 lakh against listed corporate debt securities.
  • Now, there is no ceiling, enabling higher borrowing against these instruments.
• Impact on Investors:
  • High Net-Worth Individuals (HNIs), family offices, corporate treasuries, and institutional investors can now access credit more easily.
  • AAA, AA+, and AA- rated bonds are likely to benefit first due to high credit quality.
• Bank Credit Against Shares:
  • Loan limits for lending against shares increased from ₹20 lakh → ₹1 crore per person.
  • IPO financing limits increased from ₹10 lakh → ₹25 lakh per person.
• Expected Benefits:
  • Market Depth & Liquidity: Improved trading, turnover, and bid-ask efficiency.
  • Investor Flexibility: Enables borrowing without liquidating investments.
  • Corporate Bond Market Growth: Encourages participation and utilization of outstanding debt.

5. HSBC India Launches ‘HSBC Innovation Banking’ Platform

Source: BL

Context

On October 9, 2025, HSBC India launched the “HSBC Innovation Banking” platform in Mumbai to support startups and the growing technology and venture ecosystem in India.

Objective Provide non-dilutive debt funding to startups across all stages, from seed funding to IPO preparation.

HSBC in India

Full Name: The Hongkong and Shanghai Banking Corporation Limited
Established in India: 1853, as Mercantile Bank of India, London and China
Acquired by HSBC: 1959
Headquarters: Mumbai, Maharashtra
CEO (as of 2021): Hitendra Dave

Significance

• Supports startup growth without diluting equity, allowing founders and investors to retain control.
• Strengthens India’s startup and technology ecosystem.
• Facilitates global market access and strategic guidance for Indian startups.

Agriculture

1. e-NAM Platform Expanded with 09 New Commodities

Source: PIB

Context

The Government of India has expanded the National Agriculture Market (e-NAM) by adding 9 new commodities, increasing the total tradable items to 247.

About e-NAM

• Launched: 14 April 2016
• Purpose: Connects all APMC mandis across India into a unified national digital marketplace.
• Aim:
  • Promote uniform agricultural marketing
  • Reduce information asymmetry between buyers and sellers
  • Ensure transparent price discovery based on demand, supply, and quality

Functions

• Digital Marketplace: Links APMCs, private markets, and buyers nationwide.
• Price Transparency: Real-time auctioning for fair pricing to farmers.
• Quality Assurance: Introduces quality assaying for value-based pricing.
• Ease of Transaction: Online payments, warehouse-based sales, mobile access to market data.
• Inclusive Beneficiaries: Farmers, traders, processors, exporters, and mandis.

Recent Addition

9 new commodities added:

• Green Tea
• Tea
• Aswagandha Dry Roots
• Mustard Oil
• Lavender Oil
• Mentha Oil
• Virgin Olive Oil
• Lavender Dried Flower
• Broken Rice

Impact:

• Total tradable commodities rise to 247
• Enhances trade diversity
• Boosts farmers’ incomes
• Strengthens transparent and quality-driven agricultural trading ecosystem

Facts To Remember

1. PM pitches India’s fintech start-ups to Global South

Prime Minister Narendra Modi pitched India as a fintech hub for the Global South to “enhance digital cooperation and partnership across the world,” at an event where he shared the stage with Prime Minister of U.K. Keir Starmer, at Mumbai.

2. Champion jockey Aslam Kader passes away

Former champion jockey Aslam Kader passed away on Thursday morning (Oct. 9) in Bengaluru, after a long battle with lung cancer. He was 63.

3. All-India house price index up 3.6% annually in Q1: RBI

All-India House Price Index (HPI) based on transaction-level data of 18 major cities increased by 3.6% year-on-year in the first quarter of the current fiscal, according to the Reserve Bank of India (RBI) data released

4. India and Australia sign three key pacts to expand defence ties

India and Australia on Thursday signed three key pacts including one on information sharing, to further expand their bilateral defence and military ties following “productive” talks between defence minister Rajnath Singh and his Australian counterpart Richard Marles in Canberra.

5. Three Major Indian Ports Recognised as Green Hydrogen Hubs Under National Mission

Ministry of New and Renewable Energy has formally recognised three major ports as Green Hydrogen Hubs under the National Green Hydrogen Mission.

6. Rajnath Singh Co-Chairs Maiden India-Australia Defence Industry Roundtable in Sydney

Defence Minister Rajnath Singh today co-chaired the maiden India-Australia Defence Industry Business Roundtable in Sydney with Australia’s Assistant Minister of Defence, Peter Khalil to advance industrial partnerships and capability development between the two nations.

7. India-UK Navies Conduct First Combined Carrier Strike Group Exercise

The United Kingdom’s Royal Navy frigate HMS Richmond arrived at Mumbai Port today following the successful conclusion of Exercise Konkan 2025, held off India’s western coast from 5th-9th of this month.

8. India Wins Historic Bronze at BWF World Junior Mixed Team Championships 2025

The Indian Badminton team clinched bronze in the Mixed Team event at the BWF World Junior Mixed Team Championships 2025 in Guwahati

9. Health Minister JP Nadda Launches Enhanced Tele MANAS App on World Mental Health Day

Union Minister of Health and Family Welfare Jagat Prakash Nadda launched several new initiatives, including Tele MANAS App for the National Tele Mental Health Programme (Tele MANAS) on the occasion of the World Mental Health Day in New Delhi

10. Reserve Bank of India Appoints Shirish Chandra Murmu as Deputy Governor

Shirish Chandra Murmu took charge as the Deputy Governor of the Reserve Bank of India yesterday for a period of three years.

Daily Current Affairs Quiz
11 & 12 October, 2025

National Affairs

1. India Upgrades Kabul Mission to Embassy Status

Source: TH

Context

India has announced the upgradation of its “technical mission” in Kabul to a full-fledged Embassy of India, signaling a significant step in diplomatic engagement with Afghanistan under the Taliban regime.

Key Highlights:

• Objective: To strengthen cooperation in Afghanistan’s national development, regional stability, and counterterrorism efforts.
• India’s Stand: India remains committed to the sovereignty, territorial integrity, and independence of Afghanistan.
• Security Concern: Jaishankar raised India’s concerns over forced repatriation of Afghan refugees by Pakistan and identified cross-border terrorism as a shared regional threat.
• Taliban Response: Amir Khan Muttaqi welcomed the move, stating that Afghanistan would send diplomats to the Afghan Embassy in New Delhi, though no ambassador will be appointed immediately.
• Significance:
  • Enhances India’s diplomatic footprint and humanitarian presence in Afghanistan.
  • Enables direct communication with the Taliban for regional stability and counterterrorism cooperation.

Background:

• India closed its Kabul Embassy in August 2021 after the U.S.-led withdrawal and Taliban’s takeover.
• A technical mission was established later to oversee humanitarian and consular work.
• The upgrade marks India’s cautious yet strategic re-engagement with Afghanistan.

2. India–U.K. Bilateral Maritime Exercise KONKAN 2025

Source: PIB

Context

The Indian Navy and the Royal Navy of the United Kingdom commenced the bilateral maritime Exercise KONKAN 25 on 5 October 2025 off the western coast of India. Over the past two decades, this exercise has evolved in scale and complexity, enhancing interoperability and mutual understanding between the two navies.

Key Highlights:

• Exercise Name: KONKAN 25
• Participants: Indian Navy and the Royal Navy (U.K.)
• Objective: To enhance coordination and cooperation in complex maritime operations and strengthen the long-standing naval partnership between India and the U.K.
• Activities Conducted:
  • Tactical air warfare and air defence drills
  • Surface and anti-submarine warfare operations
  • Underway replenishment exercises
  • Communication and manoeuvring drills to refine joint operational capability

3. Demographic Mission 2025

Source: TH

Context

In his Independence Day 2025 address, Prime Minister Narendra Modi announced the launch of a high-powered Demographic Mission, aimed at countering illegal infiltration and addressing India’s emerging demographic challenges.

About the Demographic Mission

The Demographic Mission is a proposed national initiative to monitor, manage, and analyse India’s demographic transformations — including fertility, mortality, migration, and population distribution — to ensure balanced growth, national security, and sustainable development.

Objectives

• Curb Illegal Infiltration: Strengthen border management and prevent demographic shifts in vulnerable regions.
• Data-Driven Governance: Build a demographic intelligence system for evidence-based policymaking.
• Promote Balanced Population Growth: Ensure equitable access to resources, education, and employment.
• Integrate Security with Development: Link border protection with socio-economic planning.

Key Features

• National Demographic Commission: A high-powered body for population assessment and migration management.
• Real-Time Monitoring: Use of data analytics, satellite mapping, and digital census tools to track demographic changes.
• Human Capability Focus: Emphasis on education, health, skill-building, ageing, and mobility.
• Cross-Sector Integration: Coordination between ministries handling home affairs, labour, health, and rural development.

4. CCRAS Launches SPARK–4.0

Context

The Central Council for Research in Ayurvedic Sciences (CCRAS), under the Ministry of Ayush, has launched SPARK–4.0 (2025–26), the fourth edition of its flagship program aimed at encouraging research orientation among BAMS undergraduates.

About SPARK–4.0

• Full Form: Studentship Program for Ayurveda Research Ken
• Implemented By: CCRAS, Ministry of Ayush, Government of India
• Aim:
  • Cultivate scientific curiosity among young Ayurveda scholars.
  • Develop a research mindset while bridging classical Ayurvedic knowledge with modern scientific methods.

Key Features

• Studentships: 300 BAMS students to receive ₹50,000 each (₹25,000 per month for 2 months).
• Eligibility: Open to students from NCISM-recognized Ayurvedic colleges across India.
• Research Methodology: Faculty-guided, short-term independent research projects.
• Certification: Students receive a certificate upon successful completion of the program.

Significance

• Strengthens the research ecosystem in the Ayush sector.
• Builds a pipeline of trained researchers for future innovation.
• Supports the integration of traditional medicine into public health and evidence-based Ayurveda.

Banking and Finance

1. Microfinance Loan Defaults Surge in FY 2024-25: Sa-Dhan Report

Source: TH

Context

According to the 2025 Bharat Microfinance Report by Sa-Dhan, a self-regulatory organization for microfinance institutions (MFIs), loan delinquencies in the microfinance sector rose sharply in FY 2024-25, indicating growing financial stress among small borrowers.

Key Findings:

• Rising Delinquencies:
  • Loans overdue more than 30 days (PAR 30+) rose to 6.2% in FY25 from 2.1% in FY24.
• Non-Performing Assets (NPAs):
  • Loans overdue more than 90 days increased to 4.8%, up from 1.6% in FY24.
• State-Level Insights:
  • Bihar had the highest outstanding microfinance loans at ₹57,712 crore.
  • Of these, 7.2% were overdue beyond 30 days and 4.6% beyond 90 days.
• Rural Borrower Stress:
  • Out of ₹2.3 lakh crore rural loans, 6.4% were overdue beyond 30 days.
  • Semi-urban and urban delinquencies were 6.1% and 6%, respectively.

Significance:

• The data suggests a post-pandemic stress persistence in rural credit markets despite economic recovery.
• Rising delinquencies may impact microfinance institutions’ balance sheets and credit availability for low-income households.
• Calls for stronger credit risk management, restructuring support, and financial literacy interventions in high-risk states like Bihar.

2. RBI Suggests Overhaul of EPFO’s Investment and Accounting Framework

Source: BS

Context

The Reserve Bank of India (RBI) has advised the Central Government to introduce reforms in the Employees’ Provident Fund Organisation (EPFO) to strengthen its investment management, accounting systems, and governance structure. The recommendations come as the EPFO continues to declare annual interest rates significantly higher than prevailing government bond yields, creating long-term sustainability risks.

Background:

• The advisory was issued following a request from the Ministry of Labour and Employment, which sought the RBI’s technical expertise to assess EPFO’s investment practices, risk management, and accounting mechanisms.
• EPFO manages over ₹25 trillion in retirement savings for nearly 300 million formal-sector workers, making it India’s largest retirement fund.

RBI’s Recommendations:

• Differentiated Investment Strategy:
  • Introduce portfolio diversification beyond government securities, based on risk appetite and member demographics.
  • Adopt market-linked investment frameworks that align with modern pension fund practices.
• Market-Linked Accounting System:
  • Shift from a book-value-based system to market-value accounting to reflect the true financial position of the fund.
• Enhanced Risk and Governance Framework:
  • Strengthen internal controls, actuarial assessments, and treasury management capabilities.
  • Establish an independent regulatory mechanism to mitigate conflicts of interest, as EPFO currently both manages and regulates its own funds.
• Capacity Building:
  • Expand the expertise of the Central Board of Trustees (CBT) and the investment committee in portfolio management, accounting, and actuarial science.
• EPFO’s Current Investment Pattern:
  • 45–65% in Government Securities
  • 20–45% in Debt Instruments
  • 5–15% in Equities (via index funds)
  • 0–5% in Short-Term Debt Instruments
• Yield Comparison (FY19–FY25):
  • EPFO interest rate: 8.1%–8.5% range
  • Average 10-year G-Sec yield: around 6.5%–7%
  • Nifty 50 returns: Highly volatile (ranging from -26% in FY20 to +70.9% in FY21)

3. RBI Consolidates 9,000 Regulatory Circulars into 238 Master Circulars

Source: BS

Context

The Reserve Bank of India (RBI) has announced a major consolidation of its regulatory framework, streamlining thousands of circulars into a simplified structure to enhance clarity, accessibility, and compliance ease for regulated entities.

Key Highlights:

• Massive Consolidation Drive:
  • The RBI will consolidate all regulatory instructions issued up to October 9, 2025, into 238 master circulars across 11 types of regulated entities and up to 30 regulatory areas.
• 9,000 Circulars to be Repealed:
  • Around 9,000 circulars currently administered by the Department of Regulation will be repealed as part of this exercise.
• Objective:
  • Simplify and improve accessibility of regulatory instructions.
  • Reduce compliance costs for banks and other regulated entities.
  • Ensure clarity on applicability of instructions to specific entities.
• Background:
  • This consolidation continues the work initiated by the Regulations Review Authority (RRA), which had earlier reviewed RBI’s regulatory framework based on stakeholder feedback.
    • The RRA had recommended:
      • Withdrawal of 714 circulars, and
      • Discontinuation/merger/conversion of 65 returns into online formats.

4. IRDAI Issues New Guidelines Mandating Board-Approved Anti-Fraud Policy for Insurers

Source: BL

Context

The Insurance Regulatory and Development Authority of India (IRDAI) has introduced the Insurance Fraud Monitoring Framework Guidelines, 2025, requiring all insurers to adopt a board-approved Anti-Fraud Policy to strengthen fraud prevention and risk management practices across the insurance sector.

Key Highlights:

• Zero-Tolerance Policy for Fraud:
  • Insurers must implement a comprehensive fraud risk management framework aimed at deterring, preventing, detecting, reporting, and remedying insurance frauds across all lines of business.
• Board-Approved Anti-Fraud Policy:
  • To cover all business operations and activities.
  • Must be reviewed at least once a year.
  • Should identify red-flag indicators and suggest procedures to manage fraud risk in each category of insurance activity.
• Cyber and New-Age Fraud Protection:
  Insurers are required to build and maintain a robust cybersecurity framework to counter emerging digital and cyber fraud risks.
  • Must include systems for incident tracking, customer verification, and access control.
  • Continuous monitoring and upgrading of cybersecurity measures are mandated.
• Formation of Risk Management Committee (RMC):
  • Insurers must constitute a Risk Management Committee responsible for implementing and overseeing the fraud risk management framework.
  • The framework should be tailored to the insurer’s business, considering factors like size, product mix, risk profile, and distribution channels.
• Guidelines Objective:
  • To ensure proactive fraud governance, improve market integrity, and safeguard policyholders’ interests through enhanced oversight and accountability.

5. NPCI and PayPal Partner to Integrate UPI with Global PayPal World Platform

Source: BS

Context

The National Payments Corporation of India (NPCI) and PayPal announced a major global partnership to integrate India’s Unified Payments Interface (UPI) with PayPal World, a new interoperable platform connecting payment systems and digital wallets across countries. The announcement was made at the Global Fintech Fest 2025 in Mumbai.

Key Highlights:

• UPI Goes Global via PayPal World:
  • India’s UPI will be the first instant payments platform to be integrated into PayPal World, marking a significant step toward global payment interoperability.
• Objective of Collaboration:
  • The initiative aims to create a frictionless, seamless, and interoperable payments ecosystem allowing users and merchants across different countries to transact easily.
• Strategic Importance of India:
  • PayPal considers India a key innovation and workforce hub, with the second-largest employee base globally.
  • Chriss emphasized that instead of competing with UPI, PayPal aims to connect India’s UPI network to the global payments ecosystem.
• About PayPal World:
  • PayPal World is designed as a global interoperable payments network, enabling cross-border wallet-to-wallet transactions, supporting local payment systems, and enhancing digital financial inclusion.

6. RBI Advisories and Public Communication (“RBI Kehta Hai”)

Source: BL

Context

The Reserve Bank of India (RBI) often issues advisories to citizens, banks, and financial institutions to promote financial awareness, safety, and compliance. Recently, it emphasized the importance of following only verified communication channels, such as WhatsApp and official websites, to prevent misinformation and fraud.

Key Points from RBI’s Communication

• Verified WhatsApp Accounts
  • Official RBI numbers: 99990 41935 (already active) and 99309 91935 (being added).
  • Only accounts with blue tick verification are official.
  • Purpose: Deliver updates on policies, financial literacy, and public advisories.
• Caution Against Misinformation
  • RBI warns against trusting unverified sources that circulate incorrect or misleading information about banking, finance, or monetary policy.
• Use of Official Website
  • Citizens are encouraged to refer to the RBI website for authentic circulars, press releases, and notifications.
• Financial Awareness
  • Through verified channels, RBI spreads awareness about digital banking, fraud prevention, and schemes like UPI and financial inclusion initiatives.

Agriculture

1. Prime Minister Launches PM Dhan-Dhaanya Krishi Yojana & Dalhan Atmanirbharata Mission

Source: PIB

Date: 11 October 2025
Location: Indian Agricultural Research Institute (IARI), New Delhi
Total Outlay: ₹35,440 crore

Schemes Launched

a) PM Dhan-Dhaanya Krishi Yojana (₹24,000 crore)

• Aim: Transform agriculture in 100 low-performing districts by enhancing crop productivity, sustainable farming, post-harvest storage, irrigation, and credit access.
• Focus: Crop diversification, modern technology, and climate-resilient practices.
• Implementation: Integration of 36 existing schemes under one unified framework, including natural farming, oilseeds, and livestock development.
• Target Beneficiaries: Small and marginal farmers, FPOs, women farmers.

b) Dalhan Atmanirbharata Mission / Pulse Self-Reliance Mission (₹11,440 crore)

• Aim: Boost domestic pulse production, enhance nutritional security, and ensure self-reliance.
• Target: Expand pulse cultivation area by 35 lakh hectares; increase production of tur, urad, and masoor pulses.
• Beneficiaries: ~2 crore pulse farmers.
• Focus: Strengthening the entire pulse value chain – procurement, storage, processing, and reduction of losses.

Key Highlights from PM’s Address

• Agricultural Growth (2014–2025):
  • Foodgrain production ↑ 90 million tonnes
  • Fruits & vegetables ↑ 64 million tonnes
  • India ranks 1st in milk, 2nd in fish production globally
  • Honey and egg production doubled
  • Agricultural exports nearly doubled
• Infrastructure & Support:
  • 25 crore Soil Health Cards distributed
  • Micro-irrigation covering 100 lakh hectares
  • PM Fasal Bima Yojana insurance claims: ₹2 lakh crore
  • 10,000 FPOs formed for better market access
• Women in Agriculture:
  • Initiatives like “Namo Drone Didis” and Krishi Sakhis empowering rural women
  • Over 17,000 natural farming clusters established
• GST & Cost Reduction:
  • Tractor prices ↓ ₹40,000
  • Lower GST on drip irrigation, sprinklers, and organic inputs
• District Focus:
  • 100 districts selected based on crop output per hectare, cropping intensity, and access to institutional loans
  • Inspired by Aspirational Districts Programme with convergence, collaboration, and healthy competition

2. Pradhan Mantri Dhan-Dhaanya Krishi Yojana (PMDDKY) 2025

Context

On October 12, 2025, Prime Minister Narendra Modi launched the Pradhan Mantri Dhan-Dhaanya Krishi Yojana (PMDDKY), a landmark scheme targeting 100 low-performing districts to modernize farming, enhance productivity, and double farmers’ income by 2030.