Daily Current Affairs (DCA) 21 May, 2025

Daily Current Affairs Quiz
21 May, 2025

International Affairs

1. WHO Member States Adopt Historic Pandemic Agreement at 78th World Health Assembly

Context:

In a landmark move to strengthen pandemic preparedness and response, WHO member states have unanimously adopted the world’s first Pandemic Agreement. The decision was finalized during a plenary session of the 78th World Health Assembly, following over three years of negotiations that began after the COVID-19 crisis.

Significance of the Pandemic Agreement

• Described as a “victory for public health, science and multilateral action” by WHO Director-General Dr. Tedros Adhanom Ghebreyesus.
• Aims to:
  • Make the world safer against future pandemics.
  • Ensure no repetition of the socio-economic losses endured during COVID-19.
  • Promote equity and solidarity in global health emergency responses.
• Purpose:
  • Strengthen international cooperation.
  • Ensure timely and equitable access to vaccines, therapeutics, and diagnostics.

Key Components of the Agreement

• Strengthens international coordination in pandemic prevention, preparedness, and response.
• Ensures equitable access to:
  • Vaccines
  • Therapeutics
  • Diagnostics
• Reinforces the global health architecture by outlining:
  • Core principles
  • Strategic approaches
  • Implementation tools

Global Health Implication

• Recognizes that citizens, economies, and societies must be shielded from future health shocks.
• Promotes collective responsibility and timely collaboration among nations.

TH

National Affairs

1. Historic Epigraphic Record of Drought Deaths Found in Karnataka (1539 CE)

Context:

A sculptural inscription discovered near Chandrashekara temple at Guttala in Haveri district of Karnataka has documented the death of 6,307 people due to drought in the local area, making it the first such historical record of a humanitarian disaster caused by a natural calamity in India.

Location and Discovery

• Site: Near Chandrashekara Temple, Guttala, Haveri district, Karnataka
• Discovered by: K. Munirathnam Reddy, Director (Epigraphy), Archaeological Survey of India (ASI)
• Language and Script: Kannada
• Inscription Type: Sculptural inscription on stone slab
• Date Mentioned: Saka 1461, Vikari, Bhadrapada su.5 (equivalent to August 18, 1539 CE)

Key Historical Content

• Event Recorded: Death of 6,307 people due to drought (bara)
• Narrative Details:
  • Victims were buried by Marulaih Odeya, son of Nanideva Odeya of Guttavalala
  • Act was performed for the religious merit of Timmarasa Svami, the local ruler
  • Ritual obeisance was made to Basaveshwara, reflecting socio-religious practices
• Sculpture Depicted: A person carrying a basket containing 2–3 bodies on his head (believed to be Marulaih Odeya)

Significance of the Inscription

• First epigraphic record in India documenting a large-scale humanitarian disaster from a natural calamity
• Rare example of direct historical evidence for drought-related deaths
• Provides insight into socio-economic and administrative responses of the 16th century
• Offers material for:
  • Climatic pattern studies
  • Demographic research
  • Comparative disaster response analysis across regions and periods

ASI’s Epigraphic Efforts (2024–25)

• Over 1,000 inscriptions discovered and copied across India, including dense forest areas
• More than 100 inscriptions documented in 2025 so far

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2. Lokniti-CSDS Survey on Media in India

Context:

India-Pakistan Crisis and Misinformation Surge: Impact of Misinformation on Public Trust and Behaviour in India

• Recent incident: During a recent India-Pakistan standoff, social media was flooded with:
  • Unverified videos of missile strikes
  • Manipulated images of military actions
  • False casualty reports, amplified by some mainstream news channels
• Resulted in heightened fear and confusion on both sides

Key Findings

Prevalence of Fake News Encounters

• Nearly 50% of active Internet and social media users reported encountering misinformation online
• Most users experienced this once, twice, or a few times

Unintentional Sharing of Misinformation

• Around 40% of:
  • Active Internet users (Table 3)
  • Social media users (Table 4)
• Admitted to sharing/forwarding fake news and later realising it was inaccurate

Public Concern About Fake News

• Among active Internet users (Table 5):
  • 21% were highly concerned
  • 31% were somewhat concerned
• Among social media users (Table 6):
  • 20% were highly concerned
  • 32% were somewhat concerned

Note: In the 2025 World Press Freedom Index, India ranks 151 out of 180 countries.

Fake News Experience Drives Concern

• 88% of social media users who had unknowingly shared fake news expressed high or moderate concern
• Even those who never shared (44%) or were not misled (39%) by fake news showed concern, indicating a broader public consciousness

Trust Deficit in Social Media Platforms

• On X (formerly Twitter):
  • 21% reported very little trust
  • 12% reported complete distrust in news/information (Table 8)

Reuters Digital News Report 2024

• 70%+ Indians now prefer online media for news
• Major platforms:
  • YouTube (54%)
  • WhatsApp (48%)
• Reflects the critical role of social media in shaping public opinion and the need for media literacy

Policy and Educational Implications

• Findings underscore the urgent need for:
  • Media literacy and digital education
  • Fact-checking tools
  • Platform accountability
• Goal: Equip citizens to discern credible information and curb the spread of misinformation

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3. Yoga Sangam 2025

Context:

The Ministry of Ayush has announced that over 1,000 organisations have already registered under the Yoga Sangam initiative ahead of International Day of Yoga (IDY) on 21st June 2025. Yoga Sangam aims to be India’s largest coordinated wellness celebration, promoting mass yoga demonstrations across the nation.

Key Highlights

• Diverse Participation:
  • Registrations from schools, colleges, corporates, NGOs, RWAs, government departments, and community groups.
  • Participation spans all 28 States and 7 Union Territories.
• Unified Practice:
  • All events to follow the Common Yoga Protocol (CYP).
  • Aims to promote unity, wellness, and national synchronisation.
• Massive Scale:
  • Over 1 lakh locations expected to host Yoga Sangam events.
  • From the Himalayas to Kanyakumari, urban rooftops to rural school grounds — yoga will unify the country.

Why It Matters

• Yoga Sangam 2025 is not just a yoga event — it’s a national wellness movement.
• Encourages grassroots wellness leadership, national integration, and celebration of India’s cultural and spiritual heritage.
• Reinforces India’s position as a global leader in holistic health.

PIB

4. Union Government Launches Depot Darpan, Anna Mitra & Anna Sahayata

Context:

On 21 May 2025, Union Minister Shri Pralhad Joshi launched three major digital platforms—Depot Darpan, Anna Mitra, and Anna Sahayata—to modernize and digitize India’s Public Distribution System (PDS). These initiatives aim to improve transparency, accountability, and efficiency in delivering subsidised food grains to over 81 crore beneficiaries under the National Food Security Act (NFSA).

Key Digital Initiatives Launched

Depot Darpan Portal

• Purpose: Self-assessment and real-time monitoring of FCI and CWC foodgrain depots.
• Features:
  • Assigns a Composite Rating (5-star max) using a 60:40 operational-to-infrastructure metric.
  • Integrates IoT sensors, CCTV, live feeds, and analytics for real-time warehouse monitoring.
  • Tracks parameters like storage loss, space utilization, manpower, and profitability.
  • Potential benefits:
    • ₹275 crore in cost savings (FCI depots).
    • ₹140 crore income augmentation (CWC warehouses).
• Capex Allocation:
  • ₹1,000 crore for FCI depot upgrades.
  • ₹280 crore for CWC warehouse improvements.

Anna Mitra App

• Target Users: FPS Dealers, DFSO Officers, and Food Inspectors.
• Features:
  • FPS Dealers: Stock updates, sales reports, alerts.
  • DFSO Officers: Performance tracking, grievance handling, beneficiary insights.
  • Inspectors: Geo-tagged inspections, FPS ratings.
• Rollout: Piloted in Assam, Uttarakhand, Tripura, and Punjab.
• Languages: Hindi and English.

Anna Sahayata Platform

• Function: Advanced Grievance Redressal System for PMGKAY beneficiaries.
• Tools Used:
  • WhatsApp, IVRS, and Automatic Speech Recognition (ASR).
• Pilot Rollout: Covers Gujarat, Jharkhand, Telangana, Tripura, and Uttar Pradesh.
• Languages: Hindi, Gujarati, Telugu, Bangla, and English.

Significance and Impact

• Aligns with the vision of Digital India and Viksit Bharat.
• Strengthens nutritional security through fortified rice distribution.
• Drives smart warehousing and process digitisation across food grain supply chains.
• Sets the stage for a nationwide rollout of digital grievance redressal and depot optimization.

PIB

5. Launch of Revamped OCI Portal

Inaugurated by

• Union Home Minister Amit Shah on May 19, 2025

Objective

• To simplify the registration process for Overseas Citizens of India (OCI) and enhance user experience
• To ensure ease of travel and stay for Indian-origin residents

Key Features of the New OCI Portal

• Updated user interface for better usability
• Advanced security mechanisms
• Enhanced functionality and efficiency
• Estimated to benefit over 5 million OCI cardholders globally

Background of the OCI Scheme

• Introduced via amendment to Citizenship Act, 1955 in 2005
• Allows registration of Persons of Indian Origin (PIO) as OCI
• Eligibility: Persons who were citizens of India on or after January 26, 1950, or were eligible to become citizens on that date
• Not eligible: Those who are or were citizens of Pakistan or Bangladesh, or whose parents/grandparents/great-grandparents were citizens of these two countries

Previous System Overview

• OCI services portal was launched in 2013
• Operational in 180+ Indian missions and 12 FRROs
• Handled approx. 2,000 applications per day

TH

Banking/Finance

1. Neo Banks in India

Context:

Super.money, a fintech startup backed by Flipkart, is planning to expand its footprint across India’s growing neobanking and digital financial services market. The Bengaluru-based company completes its first year of operations in July 2025 and aims to become one of the top 3–5 neobanks in India.

Current Offerings

• Since its launch in July 2024, Super.money has introduced:
  • Fixed Deposits
  • Personal Loans
  • Secured Credit Cards
    (All offered in collaboration with partner banks/lenders)

Neo Banks in India

The fintech wave has revolutionized India’s financial ecosystem, and neo banks have emerged as a major disruptor. Operating without physical branches, these digital-first entities are redefining how banking is experienced—especially by tech-savvy users. Let’s understand what neo banks are, how they work, and how they compare with traditional banks, digital banks, and payments banks.

What are Neo Banks?

• Neo banks are 100% digital financial institutions that deliver banking services exclusively through online platforms and mobile apps.

Key Characteristics

• No physical branches
• Partner with traditional banks for regulatory compliance
• Offer services like:
  • Instant money transfers
  • Loans and credit cards
  • Account management
  • Payment services

Note: Neo banks in India do not hold a banking license due to RBI norms. They operate in partnership with licensed banks.

How are Neo Banks Different from Traditional Banks?

Feature	Neo Banks	Traditional Banks
Branches	No physical branches	Multiple physical branches
Banking license	Operate under partner banks	Have RBI-issued licenses
Technology usage	AI-driven, app-based	Mix of traditional and digital services
Cost	Low overheads, minimal fees	Higher operational costs
Customer support	App-only, no personal banker	Relationship managers available

Neo Banks vs Digital Banks

Digital Banks:

• Often digital arms of legacy banks
• May have some physical presence
• Operate under the same banking license as parent bank

Neo Banks:

• Fully independent, 100% online
• No branches at all
• Collaborate with banking partners for regulatory compliance

Neo Banks vs Payments Banks

Aspect	Neo Banks	Payments Banks
License	No RBI license	RBI licensed
Credit services	Offer credit cards & loans	Not allowed to lend or issue credit cards
Risk exposure	Higher due to credit-linked services	Virtually credit risk-free

How Do Neo Banks Function?

Neo banks operate on a tech-driven, low-cost model:

• No physical infrastructure, saving operational costs
• Partner bank handles:
  • Fund custody
  • Regulatory compliance
• Neo bank handles:
  • Customer interface
  • Product distribution
  • User experience & service
• Services offered via mobile apps and cloud platforms

Advantages of Neo Banks in India

• Low Cost: No branches = lower maintenance and service charges
• Fast Services: Instant money transfers, quick loans, real-time processing
• Easy Onboarding: Open an account within minutes via app
• Personalized Offerings: AI-based insights, budgeting tools, and financial analytics

Things to Consider Before Using Neo Banks

• Not Recognized as ‘Banks’ by RBI
• Limited Product Range compared to full-service banks
• Mobile-Only Interface: No access to physical service points
• Legal Risks: In case of dispute, redressal may be complicated due to regulatory grey zones

Disadvantages of Neo Banks

• No Physical Presence: Lacks human interaction and offline support
• Limited Services: Restricted by the lack of a banking license
• Cybersecurity Concerns: Fully online operations make them vulnerable to digital threats

2. RBI Grants In-Principle Nod to Emirates NBD for Wholly Owned Subsidiary in India

Context:

Regulatory Approval: The Reserve Bank of India (RBI) has granted in-principle approval to Emirates NBD Bank PJSC to convert its existing Indian branches into a wholly owned subsidiary (WoS). Existing Operations: The Dubai-based lender currently operates branches in Mumbai, Chennai, and Gurugram.

• Next Step: Final banking licence under WoS mode will be issued upon compliance with RBI conditions.

Key Details

• Strategic Move: The conversion will enable Emirates NBD to:
  • Consolidate its Indian operations under a single corporate entity.
  • Benefit from WoS privileges, such as parity with domestic banks for branch expansion and fewer regulatory approvals.
• Market Footprint:
  • First Indian branch inaugurated in Mumbai (2017).
  • Expansion with two more branches in Chennai and Gurugram approved by RBI in 2021.
• Client Base & Services:
  • Caters to corporate, SME, institutional, and NRI clients.
  • Offers trade finance, treasury services, and syndicated loans.
  • Provides cross-border wealth management for NRIs.

WoS Model: RBI’s Foreign Bank Policy

• WoS Framework Benefits:
  • Treated at par with domestic banks for branch operations.
  • No need for branch-by-branch RBI approval, subject to conditions.
• Peers: Emirates NBD joins DBS Bank India and SBM India as foreign banks operating under the WoS model.

BS

4. RBI Cancels Licence of HCBL Co-operative Bank Due to Capital Inadequacy

Context:

The Reserve Bank of India (RBI) has cancelled the banking licence of HCBL Co-operative Bank, headquartered in Lucknow, citing inadequate capital and earning prospects. The bank has ceased operations effective May 19, 2025.

Key Reasons for Licence Cancellation

• Non-compliance with provisions of the Banking Regulation Act, 1949.
• Inability to repay current depositors in full.
• Continuation of the bank’s operations deemed prejudicial to depositor interests.
• Lack of a viable revival plan or sustainable earnings model.

Winding-up Process and Depositor Protection

• RBI has requested the Commissioner and Registrar of Cooperative, Uttar Pradesh to:
  • Wind up the bank.
  • Appoint a liquidator to manage the dissolution process.
• Under Deposit Insurance and Credit Guarantee Corporation (DICGC) provisions:
  • Depositors are insured up to ₹5 lakh.
  • 98.69% of depositors are eligible to receive their full insured deposits.
  • As of January 31, 2025, ₹21.24 crore has already been paid to insured depositors.

Implications

• The bank is now prohibited from all banking activities, including:
  • Accepting new deposits.
  • Repaying existing deposits.
• The RBI’s action reflects its commitment to financial stability and protection of small depositors.

BS

5. Banks May Soon Get Individual National Calling Numbers with Incoming Facility

Context:

The Government and RBI are considering a proposal to allow each bank its own unique national calling number, likely under the “1600xx” series. These dedicated numbers would support incoming calls, enhancing customer trust, service experience, and fraud prevention.

Current System and Issues

• Banks currently use multiple outbound-only numbers in the 1600xx series.
• These do not allow incoming calls, making it hard for customers to verify authenticity.
• The RBI, in January 2025, mandated:
  • Use of 1600xx series for transactional communication
  • Use of 140xx series for promotional purposes

Proposed Changes

• Single national number per bank with two-way call functionality.
• Greater customer clarity and verification of bank communications.
• Custom suffixes for individual banks in the 1600xx range.
• Possibility of exemptions for customers who opt in to broader communication permissions.

Banking Sector Requests

• Clarity on:
  • Inbound call facility on 1600xx numbers.
  • Use of third-party agents, especially in debt recovery.
  • Exemptions for debt servicing calls from strict 1600xx use.
• Requests made to:
  • RBI (Reserve Bank of India)
  • DoT (Department of Telecommunications)
  • TRAI (Telecom Regulatory Authority of India)

TET

6. Foreign Currency Convertible Bonds (FCCBs)

Context:

State Bank of India (SBI) has received board approval to raise up to $3 billion in foreign currency bonds during FY2025-26.

• The funds will be raised via senior unsecured notes, either:
  • In single or multiple tranches
  • Through public offer or private placement
  • In USD or other major foreign currencies

Foreign Currency Convertible Bonds (FCCBs): Meaning, Features, and How They Work

Foreign Currency Convertible Bonds (FCCBs) are a hybrid financial instrument used by companies to raise capital from international markets. These instruments offer a mix of debt and equity features, making them attractive for both issuers and investors.

What is an FCCB?

• An FCCB is a convertible bond issued in a foreign currency (not the issuer’s home currency).
• Functions like a regular bond by paying periodic interest (coupons) and principal at maturity.
• Offers bondholders the option to convert the bond into equity shares of the issuing company at a predetermined rate.

Key Takeaways

• Dual Nature: Acts as both a debt (bond) and an equity (convertible to shares) instrument.
• Foreign Currency: Issued in a currency different from the issuer’s domestic currency.
• Popular Among: Multinational companies operating in multiple geographies and aiming to raise foreign capital.
• Investor Type: Often subscribed by hedge funds, foreign nationals, and arbitrage investors.

Why Do Companies Issue FCCBs?

• Access to Foreign Capital: Tap into international investor pools.
• Lower Interest Rates: Issuing in countries with low interest rates reduces borrowing costs.
• Equity Conversion Option: Reduces debt burden if bonds are converted into shares.
• Stable Economies: Companies prefer to issue in countries with stable currencies and economic environments.

How FCCBs Work

• Coupon Payments: Made in the foreign currency periodically.
• Conversion Feature: Bonds can be converted into equity at a preset conversion price.
• Call/Put Options:
  • Call Option: Issuer can redeem early.
  • Put Option: Bondholder can redeem early.

Advantages of FCCBs

• Lower Cost of Capital: Due to equity component, coupon payments are generally lower.
• Currency Arbitrage: If the exchange rate moves favorably, the issuer saves more.
• Investor Benefit: Opportunity to convert into equity and gain from share price appreciation.

Risks and Considerations

• Exchange Rate Risk: Adverse forex movement increases repayment cost.
• Conversion Risk: If stock underperforms, bondholders won’t convert to equity, forcing issuer to repay in cash.
• Regulatory & Political Risk: Exposure to external country’s legal and economic frameworks.
• Equity Dilution: If bonds are converted, existing shareholders may face dilution.

Real-World Example

If a US-based company issues FCCBs in Indian rupees, the interest and principal repayments must be made in INR. If the INR appreciates, it benefits the issuer; if it depreciates, the company pays more in dollar terms.

7. SEBI’s New Co-Investment Vehicle (CIV) Plan

Background: SEBI’s May 9 Proposal

• Objective: Simplify co-investments in Alternative Investment Funds (AIFs) by replacing the current Portfolio Management Services (PMS) route with a new Co-Investment Vehicle (CIV) framework.
• Key Feature: CIVs will operate within the AIF ecosystem, avoiding duplicative structures like PMS or SPVs.

CIV Structural Highlights

• Separate PAN, demat, and bank accounts for each CIV
• Exemption from:
  • Sponsor commitment
  • Diversification norms (when co-investing in a single company with the AIF)
• Enables:
  • Pooled governance
  • Unified documentation
  • Faster deal execution
  • Simplified cap table management

Legal and Tax Concerns Raised

• Exit Constraints:
  • CIV investors cannot exit early or stay invested post AIF tenure — Vinod Joseph, Economic Law Practice
• Governance Risks:
  • Conflict scenarios may weaken CIV investor protection due to reliance on contractual rights over statutory safeguards — Ketan Mukhija, Burgeon Law
• Tax Ambiguity:
  • CIV-AIF coordinated investments may be treated as an Association of Persons (AOP), risking:
    • Loss of pass-through benefits
    • Double taxation
• Accredited Investor Limitation:
  • CIVs restricted to accredited investors, potentially curbing fundraising flexibility

Operational Implications

• Administrative Burden:
  • Every CIV requires:
    • Separate PAN
    • Bank account
    • Demat account
  • Adds complexity for General Partners — Brijesh Damodaran Nair, Auxano Capital

Mint

8. Co-Investment Through CIVs – A Structured Opportunity by SEBI

Context:

The Securities and Exchange Board of India (SEBI) has proposed a formal structure for co-investment opportunities within Alternative Investment Funds (AIFs) through a regulated Co-Investment Vehicle (CIV). This move aims to streamline investor participation and boost transparency in India’s private equity ecosystem.

What is Co-Investment?

• Definition: Co-investment refers to the option for AIF investors to invest additional capital in unlisted securities of companies where the AIF has already made investments.
• Objective: Enable direct exposure to high-potential companies while maintaining alignment with the fund’s strategy.

Purpose and Structure of CIVs

• CIVs will be structured as independent schemes under the AIF.
• Goal: Provide clarity, risk segregation, and formal governance for co-investment deals.
• Benefits:
  • Clear segregation of assets and liabilities
  • Independent operational control
  • Transparent co-investment terms

Regulatory Safeguards & Structural Requirements

The proposed CIV framework includes:

• Separate Books of Accounts: Clear financial reporting for CIVs
• Regulatory Alignment: Compliance with AIF norms
• Enhanced Governance: Safeguards to protect co-investor rights and avoid conflicts of interest

These measures are intended to foster transparency, accountability, and investor confidence in co-investment arrangements.

Relaxation in Advisory Services Norms for AIF Managers

SEBI has also proposed to:

• Ease restrictions on AIF managers offering advisory services to offshore funds.
• Remove the requirement of prior approval, allowing AIF managers to:
  • Advise global entities
  • Manage cross-border fund structures
• Conditions:
  • Mandatory disclosures
  • Compliance with prescribed norms

Aim: Strengthen India’s position in the global fund management industry and boost offshore advisory competitiveness.

9. Ministry of Finance Clarifies Investment Rules for Stock Brokers (May 2025)

Context:

• The Ministry of Finance provided crucial clarification on investment and fund-based activities by stock brokers under the Securities Contracts (Regulation) Rules (SCRR).
• The move offers greater flexibility for brokers to invest and manage funds.

Background:

• Rule 8 of SCRR restricts brokers from engaging in any business other than securities or commodity derivatives business, except as broker/agent without personal financial liability.
• The intent was to protect client funds and prohibit misuse of client money in other businesses.
• Ambiguity existed around the phrase “any business”, leading to interpretation challenges.

Key Amendments:

• Brokers can now invest from their own net worth or borrowed funds in group companies or others not engaged in securities business, provided:
  • Their liability is limited to the investment amount (no additional financial liability).
  • These investments are not construed as “business” unless they involve client funds or create financial liabilities on the broker.
• Applies to all investments, not just group companies.

Significance:

• Allows brokers to use retained earnings more flexibly without breaching SCRR.
• Removes “unreasonable fetters” on broker investment activities, supporting business growth.
• Prevents regulatory penalties for brokers found non-compliant under earlier stricter interpretations.

BS

10. ZikZuk Receives RBI In-Principle Approval to Issue Prepaid Payment Instruments (PPIs)

Context:

Hyderabad-based fintech startup ZikZuk has received in-principle authorisation from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPIs). This approval enables ZikZuk to offer prepaid wallets and card-based payment solutions in India’s fast-growing digital payments market.

About PPIs:

• PPIs allow users to store money digitally and use it for various cashless transactions like purchasing goods/services, bill payments, and remittances.
• Common PPI forms include smart cards, digital wallets, and mobile payment apps.
• RBI permits PPIs to be used for Unified Payments Interface (UPI) transactions through third-party apps like Google Pay, PhonePe, and Amazon Pay.

Significance:

• ZikZuk’s entry marks further diversification and innovation in India’s digital payments ecosystem.
• It joins existing major PPI players such as PhonePe, Paytm, MobiKwik, and others.
• This reflects RBI’s growing support for new-age fintechs, boosting India’s digital economy.

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Economy

1. Bond Yield Gap Between India and US Narrows to 22-Year Low

Key Highlights

• Yield Gap:
  • India 10-year bond yield (May 19, 2025): 6.28%
  • US 10-year bond yield: 4.55%
  • Yield differential: 173 basis points (bps) — lowest since July 14, 2003
• Historical Comparison:
  • 22-year average yield gap: 418 bps
  • Yield gap has shrunk 93 bps in the past one year

Why the Narrow Gap Isn’t Triggering Outflows

• Macro Stability in India:
  • Low inflation
  • Improving fiscal deficit
  • Stable interest rate regime
• Foreign Portfolio Investor (FPI) Flows:
  • 2022: Net outflows of $2 billion
  • 2023: Net inflows of $8.29 billion
  • 2024–25: Net inflows of $13.3 billion (highest since 2017)

Bond Prices and Yields

Understanding the relationship between bond prices and yields is crucial for investors navigating the debt markets. Bonds, though considered relatively stable, are sensitive to various economic and market dynamics that influence their value post-issuance.

1. Bond Basics at Issuance

• Face Value: The amount returned to the investor at maturity (e.g., ₹1,000 or $1,000).
• Coupon Rate: The fixed annual interest paid (e.g., 1% annually).
• Yield at Issuance: Matches the coupon rate if bought at face value.

Example: A 3-year bond with a 1% coupon rate pays ₹10 annually per ₹1,000 face value. At maturity, the full ₹1,000 is returned.

2. Impact of Changing Interest Rates

• Market Yield vs. Coupon Rate:
  • If market rates rise, bond prices fall (existing bonds offer lower returns).
  • If market rates fall, bond prices rise (existing bonds become more attractive).

Scenario: You buy a bond at 1%, but new bonds offer 2%. Your bond becomes less attractive and trades below face value.

3. Secondary Market Pricing

In the secondary bond market, prices fluctuate due to:

• Prevailing Interest Rates
• Credit Quality of Issuer
• Time Remaining to Maturity
• Demand and Supply Dynamics

Thus, a bond purchased for ₹1,000 might later trade at ₹980 or ₹1,020, affecting its yield to maturity (YTM).

Key Factors Influencing Bond Prices

Factor	Influence
Interest Rates	Inverse relationship with bond prices
Credit Quality	Higher credit risk = lower price
Term to Maturity	Longer terms = higher interest rate risk
Market Demand/Supply	Greater demand pushes prices up

What Is the Relationship Between Bond Price and Bond Yield?

Bond price and bond yield are inversely related. As the price of a bond goes up, the yield decreases. As the price of a bond goes down, the yield increases. This is because the coupon rate of the bond remains fixed, so the price in secondary markets often fluctuates to align with prevailing market rates.

What’s Driving the Yield Dynamics

• US Side:
  • Spike in bond yields due to:
    • Trump’s reciprocal tariff announcements
    • Moody’s downgrade of US sovereign rating (Aaa → Aa1)
  • Yield volatility: 4.79% (Jan high) → 3.99% (April low) → ~4.55% (May)
• India Side:
  • Yield stability attributed to:
    • Anchored inflation
    • No aggressive fiscal loosening
    • Institutional confidence amid index inclusion

Mint

Agriculture

1. Government Launches Three New Multi-State Cooperative Societies to Promote Sustainability in Dairy Sector

Overview

• The Government of India, under the leadership of Cooperation Minister Amit Shah, has announced the establishment of three new multi-state cooperative societies aimed at promoting sustainability and circular economy practices in the dairy sector.
• This marks a major step toward the envisioned White Revolution 2.0, focusing not only on expansion but also on eco-friendly transformation.

Objectives of the Three New Cooperatives

• Animal Feed & Health Cooperative
  • Focus on animal feed production, disease control, and artificial insemination.
  • Aims to improve livestock productivity and health.
• Dung Management Cooperative
  • Develop scientific dung management models.
  • Promote conversion of waste into biogas and organic fertilizers.
• Dead Cattle Residue Cooperative
  • Encourage the circular use of dead cattle residues.
  • Convert carcasses into bio-resources to enhance sustainability.

Expected Impact

• Strengthen the cooperative dairy ecosystem.
• Boost rural livelihoods through innovative, sustainable dairy practices.
• Improve resource efficiency and support India’s carbon neutrality goals.
• Enhance animal welfare, waste-to-value generation, and environmental conservation.

BS

2. IFFCO Partners with FDRVC to Empower Farmer Producer Organisations (FPOs)

Context:

• Indian Farmers Fertiliser Cooperative Limited (IFFCO) signed an MoU with the Foundation for Development of Rural Value Chains (FDRVC), a Ministry of Rural Development initiative.
• The partnership aims to empower over 800 FPOs and benefit around 10 lakh farmers nationwide by improving access to advanced agricultural inputs.

Objectives and Impact:

• IFFCO will supply innovative inputs including:
  • Nano fertilisers
  • Bio-stimulants
  • Specialty fertilisers
  • Organic inputs (bio-fertilisers, bio-decomposers)
• These inputs will be made available through FPOs, ensuring affordable prices and extended reach, especially to remote rural areas.
• FDRVC will leverage its network of FPOs for last-mile delivery, farmer education, and community-led promotion of these inputs.
• The partnership also focuses on building institutional capacities of FPOs, aiming to make them self-sustaining rural enterprises.

Significance:

• Supports sustainable agricultural practices through access to advanced fertiliser technology.
• Strengthens the rural economy by empowering farmer collectives.
• Aligns with government efforts to promote FPOs as key drivers of rural development.

BL

Facts To Remember

1. Justice Somashekar appointed Manipur HC Chief Justice

President Droupadi Murmu on Tuesday appointed Justice Kempaiah Somashekar of the Karnataka High Court as the Chief Justice of the Manipur High Court.

2. Jayant Narlikar, Indian astrophysicist who challenged Big Bang theory, passes away

Jayant Narlikar, one of India’s most distinguished astrophysicists who combined profound theoretical insight into cosmology with a lifelong commitment to science communication, passed away at his residence in Pune. He was 86.

3. World Bee Day 2025 Celebrated with Grandeur by KVIC

Event Overview

• Occasion: World Bee Day 20 May, 2025
• Organized by: Khadi and Village Industries Commission (KVIC)
• Venue: Maharashtra

4. CERT-In SAMVAAD 2025: India’s Premier Cybersecurity Audit Conference

Event Overview

• Event Name: CERT-In SAMVAAD 2025
• Organizer: Indian Computer Emergency Response Team (CERT-In), in collaboration with SkillsDA
• Dates: May 19–21, 2025

Objectives and Significance

• Strengthen India’s cybersecurity audit ecosystem
• Enhance innovation in auditing, risk assessments, and capacity building
• Support auditing of emerging technologies (AI, IoT, 5G/6G, quantum computing)
• Facilitate knowledge sharing among over 300 participants from empanelled auditing organizations, regulators, and industry experts

5. India assumes Chairmanship of Asian Productivity Organization for 2025-26

India has formally assumed the Chairmanship of the Asian Productivity Organization, APO for the 2025-26 term during the ongoing 67th Session of the Governing Body Meeting of the organisation. 

6. PM Modi to inaugurate 103 Amrit Stations across the country tomorrow

Prime Minister Narendra Modi will inaugurate 103 Amrit Stations across the country tomorrow. The Amrit Bharat Station Scheme launched in December 2022 by the Ministry of Railways aims to transform over 1,300 stations into modern hubs with multimodal integration and future-ready facilities.

7. India reaffirms its commitment to global health at 78th World Health Assembly

India has reaffirmed its commitment to global health equity at the 78th World Health Assembly in Geneva today. Addressing the plenary session of the assembly, Union Health Secretary Punya Salila Srivastava emphasized on the transformative strides made under flagship initiatives like Ayushman Bharat. She

8. India’s Adriyan Karmakar bags Silver medal at ISSF Junior World Cup in Suhl, Germany

In Shooting, Adriyan Karmakar opened India’s medal account with a silver in the 50m rifle prone event at the ISSF Junior World Cup in Suhl, Germany, yesterday. The 20-year-old shot a score of 626.7, just 0.3 points behind Sweden’s Jesper Johansson, who won gold.