Current Affairs 16 & 17 February, 2025

Daily Current Affairs Quiz
16 & 17 February, 2025

International Affairs

1. PM Modi’s U.S. Visit

Context:

Prime Minister Narendra Modi’s latest visit to Washington was brief but eventful and represented a key diplomatic engagement with U.S. President Donald Trump. This visit cemented Indo-U.S. relations further with an emphasis on trade, defense, and technology, avoiding sensitive issues.

Major Announcements and Agreements

Trade and Economic Cooperation

• Mission 500
  • Target of $500 billion in bilateral trade by 2030.
• Free Trade Agreement (FTA)
  • Discussions have begun, first draft of phase one is expected this year.
• Increase in Indian Purchases
  • Purchases of U.S. energy, oil, and defense equipment helped reduce the $45.7 billion trade deficit.

Defense and Strategic Partnership

• COMPACT Framework
  • Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology, a new program to make cooperation easier in key areas.
• Indo Pacific & Quad
  • Pledge to regional security, Mr. Trump would be coming to Delhi for Quad Summit.

Technology and Innovation

• TRUST Initiative
  • Transforming the Relationship Utilizing Strategic Technology, instead of the acronym iCET.
• The emphasis would be on semiconductors, quantum computing, AI, and there is a guarantee to develop an AI infrastructure roadmap in the course of this year.
• Extradition of Tahawwur Rana
  • Mr. Trump has sanctioned the extradition of the 26/11 attacks suspect, Tahawwur Rana, to India for trial.

Challenges and Future Considerations

Economic and Trade Frictions

• Trump’s transactional style
  • The more he speaks about balancing trade policies, the more it would create counter tariffs and taxes from India.
• Negotiation uncertainty
  • Though FTA negotiations have commenced, there remains no clarity regarding whether tariff cuts or exemptions would be sought.

Immigration and Deportation Issues

• No perceptible shifts in the U.S. position on deportation of illegal immigrants.
• Militarized flights could be against humanitarian values in deportation.

Long Term Impact on India U.S. Relations

• Positive optics and bonhomie could mean tighter relations in the next four years.
• The relationship, however, seems more transactional, similar to the first term of Mr. Trump.

PM Modi’s visit strengthened strategic and economic relations between India and the United States, opening the way for greater involvement in trade, defense, and technology.

National Affairs

1. Chipko Protest

Context:x`

The 2025 Pune Chipko protest matches the same movement in the 1970s, where locals are against the Riverfront Development Project (4,727 crore INR). Protesters insist that the trees will be threatened, the altered river ecology comes first in concrete rather than the sustainable restoration of it.

Main Concerns and Objections

Deforestation & Sacred Groves

• Trees are being geotagged by protesters to write their presence, such as students and environmentalists.
• Activists claim 22,000 trees will be felled whereas PMC claims 10,800 will be felled excluding 11,000 shifted.
• Traditional and ancient sacred groves, traditionally protected remnants of forests, are also under threat.

Project’s Effects on River Ecologies

• The river would be “pinched” to enhance flow. Environmentalists are concerned as it could make flooding worse.
• Barrages would rather slow down river cleansing.
• Problems with regard to concreting the riverfront are raised, which might not be valid in the case of non perennial rivers in Pune.

No Transparency & Public Consultation

• Activists such as Sonam Wangchuk state that there is no public consultation at any level in the whole planning process.
• Left out of consideration are alternative, environmentally friendly solutions put forth by groups of citizens.
• PMC and PMRDA supposedly failed to acknowledge the existence of some rivers, which obliges activists to demonstrate this in court.

Riverfront Development Project

Riverfront development projects comprise plans for the improvement of the riverfront, that is, riverbanks, habitat, and public access to the river. Other projects might include beautification, recreation, and even tourism.

Examples of Riverfront Development Projects

• Sabarmati Riverfront Development
  • One of the first riverfront development projects in India, the project was initiated in 2000 and had been continuing. Restoring the city’s relationship with the river and making it accessible to the public was the idea behind it.
• Pune Riverfront Development
  • This beautification program on Mula Mutha River includes its concreting and some walls.
• Brahmaputra Riverfront Development
  • It is aimed at waterfront revitalization and creating tourism, economic activities, and recreation.
• Godavari River Development
  • Stormwater drainage is one of the main components of this city development plan.

2. Panchayati Raj System in India

Context:

The passing of the 73rd amendment landmark in 1992 has enshrined the panchayati raj local self government in decentralized administration among other landmarks in India’s democratic path. There have been, however, threats in recent years to the panchayati raj system with the impetus of change in governance, economic policy, and urbanization. Thus, there is a need to reassess their functions in order to strengthen and protect the local self governments.

Current Achievements and Challenges

Achievements of the Panchayati Raj System

• Lively electoral engagement
  • Panchayat elections fought fiercely.
• Empowerment of women through leadership
  • There are nearly 14 lakh elected women representatives.
• Participation in social sector schemes
  • Rollout of rural development schemes with the panchayats.
• State Finance Commissions (SFCs)
  • Offers financial help to local bodies.

Systemic Challenges Weakening the Panchayat

• Loss of administrative decentralization
  • Just 20% states have decentralized all 29 subjects in 11th Schedule.
• Tendency towards fiscal erosion of autonomy
  • Reduction in untied grant (from 85% by 13th Finance Commission to 60% by 15th).
• Now it’s DBTisation
  • Schemes like PM KISAN have been taken away from local institutions, therefore reducing accountability.
• Urbanization
  • The basis for defining rural areas has also evolved, with the reduction in rural population (from 75% in 1990 to ~60% presently) bringing the focus of policies to municipal rule.

Measures to Rejuvenate Panchayati Raj

• Administrative Decentralization Strengthening
  • Complete devolution of items in the 11th Schedule.
  • Shifting of personnel and administrative authority from state governments to local authorities.
• Enhancing Financial Autonomy
  • Increase untied grants for facilitating local choice.
  • Increase sources of local revenue (property tax, fees for services, etc.).
  • Cut the reliance on centrally sponsored schemes.
• Leverage Technology for Improved Governance
  • Online platforms for citizen participation in planning and redressal of grievances.
  • Use of GIS mapping for resource management (land, water conservation).
• Reimagining Panchayats for Contemporary Challenges
  • Close rural urban migration gaps by supporting migrant workers and their families.
  • Promoting renewable energy and water conservation projects at the community level.
  • Disaster risk management through localized response systems.

Embracing and empowering decentralization, fiscal independence, and technological assimilation, thus empowering the panchayats, would make them responsive and effective in the governance system of India.

Panchayati Raj Institution (PRI)

3. Rat Hole Mining

Context:

Delineating the ubiquitous issue of illicit rat hole mining of the north eastern India, recent floods in Umrangso, Assam (January 6, 2024) have trapped nine miners and killed four at least. In spite of legal prohibitions and judicial injunctions, implementation is very lax, providing dominant coal mafias and political factions with free rein to continue mining in risky and exploitative manners.

What is Rat Hole Mining?

Reasons for Illegal Mining Continuation

Growth of Coal Mining and Rat Hole Practices

• Industrial demand from West Bengal and Bangladesh fueled the growth of coal mining in Assam and Meghalaya since the 1980s.
• The difficult terrain proved mechanized extraction to be impractical, thereby setting up an environment conducive to the riskiest practice of mining: rat hole mining.
• There are two forms of rat hole mining:
  • Extraction of coal from sloping hills.
  • Pits as deep as 400 feet with lateral tunnels.
• These processes are highly dangerous for miners and heavily harm the environment.

Labour Exploitation and Child Trafficking

• Migrant laborers, stuck in debt cycles, are brought in by Sardars (labour agents) under exploitative labor conditions.
• Child trafficking has been reported, as children can navigate through small tunnels and are easy targets for abuse.
• Children and untrained workers are pushed into the death of 26,000 mine entrances, where 200 workers are employed in shifts in different mines during the day.

Weak Law Enforcement and Political Interference

• NGT prohibited rat hole mining in 2014, and this was upheld by the Supreme Court in 2019.
• Yet illicit mining continues, and much of the time with the help of coal mafias, local politicians and bureaucrats.
• Whistle blowers like officers and activists have received threats and intimidation.

Regulatory Loopholes and State Level Complicity

• A few states take advantage of legal loopholes to essentially sidestep national mining legislation.
• Meghalaya exceptionally sought an exemption thereto from Constitution Schedule 6, Paragraph 12A(b) for the rules of regulation of coal mining to be applied independently.
• Although the exemption is still pending approval, the State Assembly has already forwarded a resolution seeking it, showcasing political reluctance to implement the ban.
• Specifically, Assam does not have strict state level laws, which makes prosecution against illegal mining difficult.

Call for Proactive Action and Judicial Intervention

• The Gauhati High Court took suo motu cognizance on January 29, 2024 of the Umrangso case and brings new hope for accountability.
• Nevertheless, although intervention by the court is anticipated, interfering alone will not be enough unless the current governments are always proactive in applying the law and not simply applying the law once disasters occur.
• Therefore holding the actions of the Assam and Meghalaya authorities not to stop illegal mining illegal in itself is squarely against Article 21 (Right to Life) of the Constitution of India.

Multi Layered Solutions Proposed

Strengthening the Legal Framework and Policy

• Revise the MMDR Act to make rat hole mining illegal with stringent punishment under Section 21.
• Increase state level enforcement by establishing state specific mining regulations under Section 23C.
• Enable whistleblowers and secure local officials and activists revealing illegal mining.

Technological Interventions for Monitoring and Enforcement

• Tracking of satellites to monitor illegal mining operations.
• Expand the Mining Surveillance System (MSS), which performed exceedingly well in Karnataka, to the northeastern states.

Alternative Livelihoods

• Encourage eco tourism, sustainable forestry, and skill based employment to discourage reliance on illegal mining.
• Rehabilitate impacted workers through vocational training programs.

Empowerment of People’s Participation and Forest Rights

• Make it mandatory for research to put the Forest Rights (Recognition of Forest Rights) Act, 2006, into practice whereby local community agreement is necessary before mining operations may be initiated.
• Equip local governing mechanisms (village councils, NGOs and others) to identify and report infractions.

In order to eliminate illegal mining and bring about a restructured economy through safe mining practices, we require strengthening of the legal framework, alternative employment generation, technological intervention and community mobilization.

4. AI Driven Anti Poaching Operations

Context:

Similipal Tiger Reserve in Odisha has reported a significant decline in poaching activities following the installation of TrailGuard AI, an artificial intelligence based early alert camera system. Due to the proactive technology that enhances enforcement capabilities, the team was able to conduct 96 arrests and confiscate 86 guns within just 10 months.

How TrailGuard AI Works

AI Camera Surveillance

• 100-150 AI cameras installed in strategic locations throughout the reserve, concealed behind dense foliage.
• Cameras operating on low energy sources until they pick up movement, when images are taken and processed.
• The AI identifies the image into groups of objects, e.g., ‘humans,’ ‘animals,’ or ‘vehicles’ and transmits additional relevant data within 30 40 seconds.
• Warning issued on control rooms, WhatsApp groups, and VHF radio networks necessitates immediate action.

Tracking and Arresting Poachers

• On ground intelligence units (undercover agents) ensure sure identification of poaching suspects.
• Numerous house raids have been carried out on the basis of photo evidence resulting in multiple arrests.
• In December 2023 alone, over 40 poachers were apprehended.
• Convictions will be quick tracked, one within six months after some arrests.

Reliability and Economy

• Hailed from Nightjar Technologies, the TrailGuard AI system entails:
  • A portable camera unit (pen sized).
  • A battery/communications unit (notepad sized).
  • A two meter cable between the units, making it less bulky and more easy to hide.
• Battery life 6-12 months, swapping reset cycles for maintenance in extremely hard terrains.
• The price of the unit to make it a surveillance solution of high affordability is ₹50-53K per unit.

Challenges and Considerations

Impact on Tribal Communities

• Indigenous hunting practices are followed by local tribal populations.
• Greater surveillance in the forests has created fear of unjustified arrests, deterring legal entry for firewood and other purposes.
• Forest authorities are attempting to make safer entry available for villagers while sustaining anti poaching operations.

Requirement for Supporting Ground Enforcement

• Technology is not a substitute, firm law enforcement and intelligence gathering continue to be important.
• Rapid response teams are essential to act on AI alerts and prevent poaching before it happens.

Future Potential and Wider Adoption

• Patrolling and monitoring protected areas.
• Mitigating human wildlife conflict.
• Tracking wildlife movements for conservation efforts.

This TrailGuard AI has changed poaching prevention operations to fewer gunned confrontations with poachers in Similipal Tiger Reserve since law enforcement officers do make successful arrests.

5. Labour Migrants Declined

Context:

A confluence of changes in behaviors induced by a pandemic, rises in welfare programs, and expanding local infrastructure plans created a significant reduction in labor migration, bringing about serious labor shortages in a number of sectors. These changed circumstances hit construction, energy, and manufacturing sectors, forcing organizations to change their manpower approaches and seek different measures.

Most Important Factors Causing Decline in Labour Migration

Pandemic Attitude Shifts

• Comfort & Stability in Society
  • Family, health issues, and security in the familiar have caused a post pandemic preference towards workers staying near their homelands compared to precarious urban environments.
• First Work Scenarios
  • Job hopping has emerged where workers stop working after only months compared to being present on site almost for a year in traditional customs, again resulting in workforce turnover.
• Soaring Urban Costs
  • Rising cost of living father exacerbated by the limited job security in cities erodes the careful consideration of migration to secure employment in the face of peace and lower costs at the locale.

Welfare Schemes Transaction

• Financial Security
  • Programs like Ladki Bahin and many others directly assist in solidifying the financial security of rural families so that they do not have to immediately seek urban employment.
• Food Security
  • One Nation One Ration enables migrant workers to take advantage of subsidized food anywhere in India, reducing their reliance on migrating for survival.
• Migration Support Systems
  • Initiatives like migration corridors and the National Migration Support Portal help workers secure employment, housing, and services, thereby enabling them to remain close to their local regions.

Rural Infrastructure Projects

• Home Based Job Opportunities
  • These small scale infrastructure projects, short of official changes in industrialization in the state of Uttar Pradesh and Bihar, in fact wild workers at jobs in their homes, where they are remunerated nearly as much as when they would be working in the urban.
• Rural Industrial Development
  • Work migration for the same wages is not a ego ride in employment to numerous workers. Instead, they would rather accept occupations quite close by that home itself.

6. India’s Digital Services Growth

Context:

Digitizing state services and simplifying the daily life of citizens has significantly embraced digital services in India. Below are some of the key highlights of the four programs most prominently expanding.

• Bharat Broadband: Connect Rural India
  • 21,4000 Gram panchayat connected to internet (as of January).
  • 69,2000 Km Of Optical Fiber Cable Laid Across The Country.
  • 10,4000 Wi Fi hotspots have been installed in gram panchayats so that rural citizens can access the internet through these hotspots.
• Bhashini: AI Powered Language Translation
  • 22+languages: Bhashini, an AI based tool for language translation, supports.
  • 237 million: Number of translations done.
• DigiLocker: Cloud Based Document Storage
  • 480.9 million: Number of users in DigiLocker as of February 14.
  • 9.2497 billion: Documents issued via DigiLocker (latest available).
• Aadhaar: Biometric Identity System
  • 2840 million: Aadhaar authenticated transactions conducted in January.

7. India’s AI Journey

Context:

India’s long-awaited vision of attaining a unique status in Artificial Intelligence(AI) is taking shape due to rapid developments and innovations across the governmental spectrum. Yet hurdles remain that, if not overcome, will jeopardize any long-term success: funding issues and dependencies on technology.

Key Highlights:

Government Support: AI Mission

• The AI Mission has ₹10,000 crore earmarked for AI development in India. The AI Mission is about developing sovereign capabilities in AI.
• The mission, with pooled computation power and subsidized GPUs for AI model training, gives India computation access at $1/hour approximately.
• The mission aims at AI startups and skills enhancement along with access to non-personal datasets required for AI model generation.

Competitive Advantage of India for AI Talent

• The Indian AI talent pool, therefore, is placed firmly at the forefront of AI talent with 2.8 times better skills than the world average.
• India ranks second in AI talent after the US with about 111,000 AI professionals.
• Indian companies have made their mark globally, Sarvam.ai has been listed among the top 100 promising startups by CB Insights.

Key AI Challenges

• Funding gaps
  • Indian AI startup funding fell drastically from $998 million in 2021-2022 to $261 million in 2023-2024.
• Foreign dependencies in technology
  • India depends on imported GPU chips like Nvidia’s A100 and H100. The task before India now is to remain competitive once the next-generation chips show up in the market.
• Homegrown GPU Development
  • The Government is working closely with public and private players for the development of indigenous GPUs, yet, this will take some time.

Open Source and AI on Edge

• Open Source AI
  • Building a global standing for the Indian AI ecosystem, monetization gives the real trial. Except that going by fame, the models by OpenAI associated with ChatGPT were hardly able to generate almost any revenue.
• AI Labs
  • This provided a lesser cost, secure, and unobtrusive monetization route, perfect for fast-tracking growth as it allows transferring computing to the user’s side, thereby limiting dependency on cloud infrastructure.

India’s Stand Globally: Strengths and Outlook Beyond

• Global AI Ranking
  • India ranks 4th in the world in the AI ecosystem after the US, China, and UK, according to Stanford Global Vibrancy Index. The increase in AI competition sees India getting increasingly relevant in it.
• In spite of challenges, the presence of government-backed initiatives, AI skills, and technologies like AI on the edge give India an exemplary slot such that it can stake claim to broader platforms on the world AI map.

Banking/Finance

1. Central Bank Digital Currency (CBDC) in Fintech

Context:

Non Banking Institutions Fintechs have begun taking steps to serve the majority of the retail segment of the Central Bank Digital Currency (CBDC) known as the e₹. Specifically, new use cases need to be pushed beyond mere P2P and P2M transactional type use cases. This would enable use of programmable transactions in a wide range of sectors like government welfare schemes, cross border remittances and much more than that.

Key Factors Driving CBDC Adoption for Fintechs

Increasing Use Cases for e₹

• The special use nature of programming CBDC transactions is that it can be used under government schemes like food coupon subscriptions under nutribis as well as hospital bills and fertilizers, extending the scheme beyond simple efficiency gains under DBT (Direct Benefit Transfer).
• Cross Border Remittances
  • It will create channels for the cross border payment with the CBDC technology in itself. This would also gain hugely by interoperability CBDC architecture designed by central banks.

RBI’s Approval for Non Banks

• With approval ofMobiKwik and Cred to introduce e₹ wallets for users, this is another step towards making CBDC-R more accessible with third party payment apps.
• Increasing numbers of non bank payment operators will join the CBDC system as this becomes a mass adoption of e₹.

The Challenges That Would Hurdle Widespread Adoption

Emulate Success of UPI

• India has been incredibly successful in P2P and P2M transactions through the Unified Payments Interface (UPI), but it could be extremely challenging to replicate that success when it comes to CBDCs.
• Its “real time payments system” actually dominates P2P and P2M transactions, rendering the e₹’s attempt to garner any significant market share in these segments very much more difficult.

Monetisation and Profitability

• In India’s status quo, monetisation is the sin qua non that is a barrier to entry for fintech companies.
• The present status has no definite path for these enterprises towards generating revenues through the conversion of a CBDC transaction.
• Cross border remittances being the other extremely promising sector for monetisation opportunities, will be exploited once the CBDC ecosystem matures further.

Technical Investment

• Fintechs seeking to offer CBDC services would need to make investments in blockchain technology. e₹ wallets are constructed on a token based digital currency architecture that entails interoperability with the Reserve Bank of India (RBI) and regulated institutions for currency issuance and settlement.
• Real time direct transfer of digital currency tokens occurs between parties for such transactions.

The Future of CBDC Adoption

Programmability for Purpose Based Transactions

• One of the most important advantages provided by CBDCs in comparison to traditional digital payments is that of programmability. What this implies is that e₹ wallet funds will be designated for particular predetermined purposes and cannot be spent on anything else, thus avoiding abuse of the funds.
• There would be plenty of flexibility and protection in terms of e₹ transactions since these can be scripted based on criteria like expiry date, INR, geographic region, and MCC.
• Tempting Consumers For Long Time
  • The fintech businesses have a great deal to anticipate in terms of consumer involvement for the long term as obtained due to purpose oriented transactions by the businesses.

2. Regional Rural Banks (RRBs)

Context:

The Regional Rural Banks (RRBs) have played a vital role in bringing banking to the hinterlands of rural India; however, with changes happening ever so fast in the world of finance, one must really ask themselves will RRBs be able to serve their substantive purpose?

The government’s intention to introduce the “one state, one RRB” policy, which is likely to consolidate RRBs from 42 into 28, suggests a paradigm shift in its stance. While this overhaul is part of the larger scheme of boosting efficiency within the rural banking sector and other banking organs, it does not sufficiently tackle the deeper issues facing these banks.

RRBs A Historic Outlook and the Present Role

Regional Rural Banks (RRBs) are government-owned banks that provide banking services to rural and semi-urban areas in India. 

• Historical Context
  • RRBs were established in 1976 to provide credit and financial services to the still underprivileged people in rural areas, which were otherwise neglected by commercial banks.
• Ownership Structure
  • RRBs are jointly owned by the central government (50%), the sponsor banks (35%), and the state governments (15%).
• Over time, RRBs suffered shortages of capital and required endless government infusions of funds to stay viable. The government itself provided Rs 10,890 crore from FY21 to FY23 alone.

Current Challenges Facing RRBs

• Non Performing Assets (NPAs)
  • The NPA Mess: RRBs had a gross NPA ratio of 6.1%, while the overall banking industry had around 2.6%. Evergreening of loans raises concerns about the sustainability and profitability of many of the RRBs. As of March 2024, 11 RRBs had more than 5% net NPAs, indicating operational trouble.
• Operational Inefficiency
  • Cost to Income Ratio: The cost to income ratio of RRBs is a whopping 68%, compared to the industry average of 43%. This operational inefficiency points toward mismanagement and lack of operational efficiency, making it more difficult for RRBs to compete in this fast changing financial market.
  • The Credit Deposit Ratio: A sluggish credit deposit ratio means RRBs have been slow on the draw in doling out loans.
• Outdated Technology
  • Digital Divide: Fintech, microfinance, and business correspondent enterprises have significantly improved access to computing and banking in rural areas. If anything, RRBs are far behind in digital adaptation. Rural customers are moving forward with mobile banking, digital payments, remittance alternatives, and it is really RRBs that are struggling to keep pace.
  • The slow digital transformation of RRBs is a big disadvantage since consumers are looking for modern banking solutions.
• Governance and Local Political Interference
  • Governance Problems: As is the case with co operatives, RRBs are compromised by political interference that affects decision making and the quality of the assets. Senior executives from sponsor banks often get entangled in local politics, which creates a terrible governance bottleneck for effective management.

The “One State, One RRB” Proposal: Is It the Right Move?

• The one state, one RRB model aims to merge the existing RRBs into one bank for each state and thus streamline operations and create efficiencies. However, this type of consolidation only addresses select perspectives of a much larger host of challenges confronting RRBs, such as inefficiency, outdated infrastructure, and poor governance.
• Merging RRBs with Sponsor Banks could be a more effective strategy. Sponsor banks have better access to technology, capital, and expertise to help modernize rural banking. However, this comes with all its clustering difficulties, mainly related to service conditions that would impede sufficient flexibility for mergers.

The Journey Ahead: Merging, Modernizing, and Reinventing of RRBs

• RRBs have played an important role in bringing banking to rural India, but they are being fast overtaken by technological advancement and competition. In order for them to remain relevant, RRBs will have to go through a very thorough modernization:
• More Efficient Capital Management
  • RRBs should reconsider their dependence on government funding. Instead of the crazy donations of capital every other month should be a focus on profit enhancement through better risk management and improved asset quality.
• Merging with Sponsor Banks
  • Rather than merely consolidating RRBs under the one state umbrella, a way forward could be to merge them with their sponsor banks, bringing staff with them and bringing them up to speed with modern systems. This could build a stronger and more competitive rural banking network.
• Investment in Technology
  • This should be a very substantial investment by RRBs for the future in terms of digital banking and mobile platforms. This will enable offering such services that are in high demand by the rural customers digital payments, mobile banking, and remittance.
• Regulatory Modernization
  • For RRBs to move away from local political pressures, it is paramount to very freely promote the management environment of transparency and effectiveness. Stronger and more reliable auditing coupled with robust data governance will rekindle a positive perception in their operations.

3. Sebi Regulatory Test

Context:

The once-dramatic battle for Religare Enterprises has now matured into a high stake test of India’s foremost corporate takeover rules with regulators, investors, and now the Supreme Court participating in the fray. At the crux of the matter is the open offer by Burman Group to acquire a controlling stake which is contested by US based investor Digvijay ‘Danny’ Gaekwad who had made a superior counter offer, found obstructed by Sebi’s procedural stipulations.

Now Gaekwad Comes Up with a Better Offer but Runs into Regulatory Hurdles

• January 2025
  • Danny Gaekwad, an investor from Florida, entered the fray by putting in an offer at ₹275 per share, 17% higher than the Burman bid.
• “Sebi’s Rejection
  • The regulator rejected Gaekwad’s counter-bid for failure to comply with the takeover code, anyway, he didn’t have a proper timeline followed, merchant bankers working on it, and never submitted any formal process.” .
• The Supreme Court Steps In
  • Gaekwad appealed against Sebi’s directive, and the Supreme Court allowed his bid—on the ground of depositing ₹600 crore as proof of financial backing.

What This Means for India’s Takeover Framework?

The Religare saga raises some critical questions regarding Sebi’s takeover regulations, such as:

• Strict Compliance versus Competitive Bidding
  • Does it mean to have really stringent procedures under Sebi when serious competing offers are supposed to be in favor of the shareholders?
• Financial Proof of Fund
  • The requirement of a deposit of ₹600 crore seems to signify impetus towards establishing financial credibility in takeover wars.
• Delay in Regulatory Approvals
  • Legal experts feel that the entire takeover process in India needs a fresh appraisal as ‘time’ may well become a distortion factor in market valuations in discouraging competitive offers.
• Corporate Governance & Power Struggles
  • During the war, Rashmi Saluja was thrown out of the Religare board. This seems to be a very indicative change in control dynamics.

With the Burmans’ bid going smoothly, Sebi’s moot point about regulating its interference on the matter continues. Whether India’s takeover laws should become laxer in order to promote competitive bids for the asset at stake or do, in effect, Sebi’s tight regulations protect investors from the dubious merits giants?

4. RBI Ban On Fresh India Co-op Bank

Context:

Thousands of depositors will suffer as a result of RBI’s recent restrictions on New India Co-operative Bank due to an alleged fraud of ₹122 crores. Withdrawing deposits has been frozen by the Reserve Bank of India, leaving most depositors uncertain of their savings. However, these depositors can claim deposits up to ₹5 lakh under deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC), which has already commenced the claim process.

Key Highlights:

• Action of RBI and Its Effect
  • At the same time as its withdrawal, the RBI imposed restrictions on the bank, which suspended the withdrawals for six months after a complaint of fraud was registered with the Economic Offences Wing of Mumbai Police.
  • 90% of depositors numbering around 130,000 are covered by the DICGC insurance scheme, which has already begun to be claimed by a May 14 deadline for submissions, the cutoff date for submission being March 30.
• Relief of Deposit Insurance
  • Most of the depositors have already lodged their claims or at least are in the process of lodging them, while some will have to wait three months for their money-back.
  • Most depositors find relief through the insurance scheme, which has once again kept the hopes alive among depositors, for a channel has opened up through which they can get back their deposits up to Rs 5 lakh.
• Worries of Deposit Holders
  • Angry with the RBI timelines, affected depositors, especially seniors and others who depend on monthly withdrawals, express concern over emergencies that may arise, particularly medical bills.
• Fraud Allegations and Legal Action
  • Hitesh Mehta, a general manager of the bank, has been nabbed in connection with participation in the alleged fraud. Now, customers need to look for different banking options as they juggle their blocked funds.

So there is some solace for unhappy customers in deposit insurance, but still like many other people they fight an uncertain future about when it could be possible to access their funds and the inconveniences that arise from delays in processing claims. In other words, it raises worries concerning the bank’s oversight in these accounts and the fate of depositors in particular.

Facts To Remember

1. Grok 3 chatbot from Musk-led start-up xAI to be unveiled today

Elon Musk said his startup xAI will release its Grok 3 chatbot on Monday and billed it as the “smartest AI on Earth” in a fiercely competitive market. Grok 3 was trained on synthetic data and is capable of reflecting on errors it makes by going over data in order to reach logical consistency.

2. Musk-led DOGE cuts $21 million India grant

The U.S. Department of Government Efficiency led by billionaire Elon Musk has announced a series of expenditure cuts, including $21 million allocated for “voter turnout in India”. The DOGE announced cancelling many programmes costing hundreds of millions of taxpayers’ dollars.

3. Cook Islands signs agreement for closer relations with China

The Cook Islands says it has signed a deal to expand relations with China, stressing that the accord does not impinge on ties with former colonial power New Zealand.

4. Indonesia wins Asia mixed team badminton title

Indonesia took home its first gold at the Asia Mixed Team Badminton Championship on Sunday, defeating two-time defending champion China 3-1 at the Conson Sports Centre, Qingdao, China.

5. Rio de Janeiro to host next Brics summit in July

The Brazilian government has announced that the next Brics summit will take place in Rio de Janeiro on July 6-7. Brazil will chair the bloc of developing economies through 2025 and said it will focus on promoting global governance reform and cooperation among Global South countries, according to a statement from the federal government.

6. President Anura Kumara Dissanayake unveils Sri Lanka’s Budget 2025

President Anura Kumara Dissanayake unveiled Sri Lanka’s Budget 2025, focusing on economic recovery, fiscal discipline, and social welfare. The government targets a 5% GDP growth rate, aiming to stabilize the economy after the 2022 financial crisis

7. Finance Minister Nirmala Sitharama launches Mutual Credit Guarantee Scheme for MSMEs

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman today launched the Mutual Credit Guarantee Scheme for MSMEs in Mumbai. The finance minister said that this will boost the MSMEs which were focussed upon in the last three budgets.

8. Maharashtra govt forms committee to study, implement MSP schemes

The Maharashtra government today formed a committee to study and implement minimum support price (MSP) schemes under the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA).

9. India can lead the vision of Fashion for Environment and Empowerment: PM Narendra Modi

Prime Minister Narendra Modi has said, the world is adopting the vision of Fashion for Environment and Empowerment, and India can lead the way in this regard. He pointed out that sustainability has always been an integral part of Indian textiles tradition, citing examples like khadi, tribal textiles, and the use of natural dyes.