Daily Current Affairs Quiz
19 July, 2025
National Affairs
1. INS Nistar Commissioned
Context:
In a significant boost to India’s maritime operational capabilities and self-reliance in defense manufacturing, the Indian Navy commissioned INS Nistar, the country’s first indigenously designed and constructed Diving Support Vessel (DSV), on July 19, 2025, in Visakhapatnam.
Key Highlights:
- First of Its Kind:
- INS Nistar is the first of two DSVs being built by Hindustan Shipyard Ltd. (HSL), under India’s “Aatmanirbhar Bharat” initiative.
- Dimensions and Design:
- The vessel is 118 metres long and equipped to carry out saturation diving and deep-sea rescue operations, capabilities available only to a select few navies globally.
- Strategic Role:
- Supports submarine rescue missions for Indian and partner navies.
- Enhances India’s position as the “first responder” and “preferred security partner” in the Indian Ocean Region.
Technological and Operational Capabilities
- Deep-Sea Operations:
- Equipped to support diving operations up to 300 metres depth.
- Serves as a Mother Ship for Deep Submergence Rescue Vessels (DSRVs) for distressed submarines.
- Advanced Equipment:
- Remotely Operated Vehicles (ROVs)
- Self-Propelled Hyperbaric Life Boat
- Diving Compression Chambers
- State-of-the-art saturation diving systems
Banking/Finance
1. Sebi Proposes Changes in Categorization and Rationalization of Mutual Fund Schemes
Context:
The Securities and Exchange Board of India (SEBI) is set to revamp mutual fund regulations by introducing a separate framework for passive schemes and expanding the scope of active fund categories. These changes aim to ensure greater clarity, investor choice, and consistency in the mutual fund space amid rising scheme proliferation.
Key Proposals and Changes
- Separate Regulations for Passive Funds
- SEBI plans to create a dedicated regulatory framework for passive investment schemes, such as ETFs and index funds.
- This is intended to curb redundancy and overlaps, given the rapid growth in passive products.
- Expansion of Active Categories
- Active equity, hybrid, and debt fund categories will be broadened to provide more tailored investment strategies for investors.
- Value and Contra Funds Allowed Together
- Mutual fund houses will now be permitted to offer both value and contra schemes.
- Earlier, AMCs could only launch one of the two, to avoid category duplication.
- New Sectoral Debt Fund Category
- A new category will permit schemes that invest over 80% of their portfolio in debt instruments of a specific sector (e.g., infrastructure, power, or banking).
- This is designed to offer targeted debt exposure for investors seeking sector-specific credit plays.
- Expanded Solution-Oriented Schemes
- The number of solution-oriented mutual fund schemes (like retirement and children’s plans) will increase from 2 to 6.
- This provides more flexibility and customisation for long-term investors with specific financial goals.
- Retirement Fund of Fund (FoF) Category
- A new Retirement FoF category will be allowed, investing across equity, hybrid, and debt funds.
- SEBI will allow one Life Cycle FoF launch every 5 years, with a maximum tenure of 30 years.
- This move aligns with long-term retirement planning trends and the need for diversified allocation.
2. India Launches Electricity Futures
Context:
In a significant step toward reforming India’s power markets, electricity futures trading has officially commenced on the National Stock Exchange (NSE) and Multi Commodity Exchange (MCX). At the launch event in Mumbai, SEBI Chairman Tuhin Kanta Pandey stressed that these contracts are designed as risk management tools, not instruments for speculative gains.
Key Highlights:
Purpose and Structure of Electricity Futures
- Electricity futures are cash-settled contracts that allow market participants to lock in the price of electricity for a future month.
- Unlike physical delivery contracts traded on power exchanges, these are financial derivatives purely intended for hedging price risks.
- Trading began on NSE on July 14 and MCX on July 10, with:
- Minimum trade unit: 50 MWh (50,000 units of electricity)
- Tick size: â‚ą1 per MWh
- Cash settlement only
Regulatory Safeguards Against Speculation
- Electricity is classified as a highly volatile commodity.
- SEBI has imposed high initial margins to deter excessive speculative participation.
- Additional margins may be introduced during periods of heightened volatility.
- Daily price limits have also been put in place to curb extreme price swings.
Key Participants and Benefits
- Participants include:
- Power generators
- Distribution companies (discoms)
- Power exchanges
- Large consumers
- Institutional traders
- Benefits:
- Hedging against volatility in spot markets
- Reduced financial stress on discoms, which are often bound by rigid long-term power purchase agreements (PPAs)
- Enables predictable electricity pricing, helping discoms avoid tariff shocks and manage subsidies better
- Encourages private investment in power infrastructure, including renewables
Role in Power Market Reform
- These contracts are part of broader efforts to deepen India’s electricity markets.
- The move supports India’s net-zero carbon emission goals and the development of a green and investor-friendly grid.
- SEBI coordinated with the Central Electricity Regulatory Commission (CERC) to ensure alignment with physical market structures.
3. India’s Retail Asset Securitisation Market Grows
Context:
India’s retail asset securitisation market recorded a moderate 6% year-on-year growth in the first quarter of FY26, reaching volumes of ₹52,000 crore. A major highlight was the country’s first Residential Mortgage-Backed Securitisation (RMBS) transaction, marking a new chapter in long-term funding innovation.
What Is Securitisation?
- Securitisation refers to the process of pooling illiquid financial assets (like loans) and converting them into marketable securities.
- It facilitates:
- Liquidity for lenders
- Risk distribution across investors
- Access to capital for underserved sectors
Steps in Securitization Process
- Loan Issuance (Asset Origination)
- A bank or NBFC (Non-Banking Financial Company) gives out loans — like home loans, car loans, or business credit lines — to borrowers.
- Forming a Loan Pool
- The lender selects similar loans (same type, term, or risk level) and bundles them into a group — called an asset pool.
- Creating a Special Purpose Vehicle (SPV)
- A new legal entity called a Special Purpose Vehicle is created. It keeps the asset pool separate from the lender’s main balance sheet, protecting investors if the lender fails.
- Transferring Assets to the SPV
- The lender sells the asset pool to the SPV. This allows the lender to remove the loans from its books and use the money it gets from the SPV to issue more loans.
- Breaking into Tranches (Tranching)
- The SPV slices the asset pool into pieces (called tranches) based on risk —
- Senior Tranche (low risk, first to be paid)
- Mezzanine Tranche (moderate risk)
- Junior or Equity Tranche (high risk, last to be paid)
- The SPV slices the asset pool into pieces (called tranches) based on risk —
- Adding Safety Nets (Credit Enhancement)
- To make the securities safer and more attractive, the SPV adds safeguards like:
- Extra collateral
- Reserve funds
- Insurance or third-party guarantees
- To make the securities safer and more attractive, the SPV adds safeguards like:
- Getting Ratings
- Credit rating agencies (like CRISIL, ICRA, CARE in India) rate the tranches based on how risky they are. Better-rated tranches attract more investors.
- Selling to Investors
- Investment banks or brokers help the SPV sell these securities to investors like mutual funds, insurance companies, or even pension funds.
- Paying Investors
- As borrowers repay their loans, the collected money is used to pay investors. Senior tranches are paid first, and junior ones last.
- Monitoring & Reporting
- A servicing agency tracks loan repayments and regularly updates investors on performance and risks.
4. Employees’ Deposit Linked Insurance (EDLI) Scheme
Context:
On July 19, 2025, the Ministry of Labour and Employment notified key relaxations to the Employees’ Deposit Linked Insurance (EDLI) scheme, administered under the Employees’ Provident Fund Organisation (EPFO). The aim is to enhance social security benefits for employees and their families, especially in cases of death during service.
Key Changes in EDLI Scheme
- â‚ą50,000 Minimum Assurance Benefit
- Nominees will receive at least â‚ą50,000 under EDLI, even if the PF balance is below that amount.
- Breaks in Employment – Relaxed Rule
- Gaps up to 60 days between jobs won’t break continuity. Multiple spells with ≤60-day gaps count as continuous service.
- Death Within 6 Months of Last PF Contribution
- If the employee dies within 6 months of the last PF deposit and remains on employer rolls, the family is eligible for EDLI benefits.
About the EDLI Scheme
- The Employees’ Deposit Linked Insurance Scheme (EDLI) provides life insurance coverage to all employees who are members of EPF or PF-exempted trusts under Section 17 of the EPF Act.
- The maximum benefit can go up to â‚ą7 lakh, depending on the last drawn salary and tenure.
- The scheme ensures financial support to the family of an employee in the event of death during service.
5. SBI Named World’s Best Consumer Bank 2025 by Global Finance Magazine
Context:
The State Bank of India (SBI), India’s largest lender, has been honoured with the prestigious title of World’s Best Consumer Bank for 2025 by Global Finance magazine, highlighting its continued focus on digital transformation and customer-centric services.
Key Highlights:
Global Recognition
- Global Finance magazine, a reputed international financial publication, adjudged SBI the World’s Best Consumer Bank 2025.
- The award selection was based on independent editorial evaluation, supported by insights from global corporate finance executives, analysts, and bankers.
Focus on Inclusive Digital Banking
- SBI Chairman CS Setty emphasized that customer experience is central to the bank’s growth strategy.
- SBI has achieved milestones in:
- Vernacular voice banking to boost accessibility
- 24/7 digital support for round-the-clock services
- Simplified customer onboarding, especially in rural and semi-urban areas
Use of Advanced Technology
- The bank is building omni-channel engagement models.
- Leveraging AI for hyper-personalised financial offerings, SBI aims to reach underserved and emerging segments with tailored services.
Global Platform for Felicitation
- The award will be presented to CS Setty on October 18, 2025, during the IMF/World Bank Annual Meetings in Washington, D.C.
6. Net-Zero Banking Alliance (NZBA): Global Climate Commitment by Banks
Context:
HSBC, one of the world’s largest banking institutions, has become the first major UK bank to exit the UN-backed Net-Zero Banking Alliance (NZBA). This move signals growing tensions between environmental, social, and governance (ESG) commitments and political headwinds, particularly from the United States.
Key Highlights:
HSBC’s Exit from NZBA
- HSBC exited the NZBA, a flagship initiative of the UN’s Race to Zero campaign, aimed at aligning banks’ lending and investment portfolios with the 1.5°C climate target.
- Despite the withdrawal, HSBC reaffirmed its net-zero ambition for 2050, though it postponed its interim 2030 target for operational and supply chain emissions by 20 years.
Net-Zero Banking Alliance (NZBA)
The Net-Zero Banking Alliance (NZBA) is gaining prominence as financial institutions align with global climate goals.
What is NZBA?
- A global alliance of banks committed to achieving net-zero greenhouse gas (GHG) emissions by 2050.
- Aligns with the Paris Agreement to limit global warming to 1.5°C.
- Convened by: United Nations Environment Programme Finance Initiative (UNEP FI).
- Nature: Industry-led, voluntary commitment.
Key Features:
- Members must set science-based targets for reducing emissions by 2030 or earlier.
- Applies to banks’ lending and investment portfolios, not just internal operations.
- Aims to steer financial flows toward a low-carbon, climate-resilient future.
Relevance:
- Strengthens accountability in green finance.
- Enhances role of the banking sector in supporting climate transition.
- Encourages climate-aligned credit and investment practices globally.
Agriculture
1. Agriculture Reform Needs More than an Umbrella Scheme: PMDDKY
Context:
The Union Cabinet recently approved the PM Dhan-Dhaanya Krishi Yojana (PMDDKY), aiming to unify 36 existing schemes across 11 Central Departments to boost agricultural productivity and rural self-reliance. The scheme is set to launch in October 2025 during the rabi season, with an annual outlay of â‚ą24,000 crore for six years.
Key Features of PMDDKY
- Convergence-Based Model: Integrates flagship schemes such as PM-KISAN, PM Fasal Bima Yojana, and relevant State-level initiatives.
- Targeted Approach: Focus on 100 low-productivity districts, identified using criteria such as cropping intensity and low credit disbursement, modeled on NITI Aayog’s Aspirational Districts Programme.
- Public-Private Partnership (PPP): Encourages collaboration with private sector actors for agri-infrastructure, credit, and value addition.
- District-Level Planning: Implementation to be guided by District Dhan Dhaanya Samitis, based on local agro-climatic and socio-economic realities.
- Monitoring Framework: Progress to be tracked using 117 key indicators on a monthly basis by the Centre.
Challenges and Considerations
- Uniformity vs. Flexibility: While national convergence can streamline delivery, uniform implementation across diverse agro-ecological zones may dilute effectiveness.
- PPP Caveats: Private participation must align with public welfare goals, especially in critical areas like foodgrain, edible oil, and pulses production.
- Kharif Sowing Trends: Recent data show declines in oilseed and pulse cultivation, underscoring the need for robust public support and not just policy repackaging.
- Participatory Governance: For real transformation, States, Panchayati Raj Institutions, PACS, agricultural universities, and FPOs must be core stakeholders, not just peripheral actors.
Way Forward
- Increase Public Outlays: Reversing the fall in budgetary support for agriculture is critical to achieving self-sufficiency and doubling farmer incomes.
- Decentralised Planning: District-specific strategies must be empowered with adequate funds, autonomy, and technical support.
- Sustainable Agriculture Goals: PMDDKY must integrate goals like soil health, water conservation, crop diversification, and climate-resilient practices to ensure long-term rural prosperity.
Facts To Remember
1. Sujeet claims 65kg gold in Budapest ranking series event
Asian under-23 champion Sujeet Kalkal toppled some established names on his way to the 65kg freestyle gold medal at the Ranking Series wrestling event in Budapest.
2. 7 day VRRR auction sees strong demand
The Reserve Bank of India (RBI) received bids worth â‚ą 2.07 trillion against a notified amount of â‚ą 2 trillion in theseven-day Variable Rate Reverse Repo (VRRR) auction, which coincided with the maturity of the previous â‚ą 2.07 trillion VRRR auction.
