Daily Current Affairs (DCA) 23 April, 2025

Daily Current Affairs Quiz
23 April, 2025

International Affairs

1. US Vice-President J.D. Vance in India

Context:

U.S. Vice-President J.D. Vance emphasized that India–U.S. relations will shape the 21st century. Pitched for closer cooperation in defence, energy, and trade. Spoke at the Rajasthan International Centre during his four-day India visit.

Trade and Economic Partnership

• Vance reaffirmed commitment to a fair, balanced India–U.S. trade agreement
• Stressed shared priorities: job creation, durable supply chains, worker prosperity
• Announced that terms of reference for trade negotiations have been finalized
  • These will protect workers’ interests while boosting exports from both sides
  • Aimed at eliminating condescension and past preachy diplomacy from the U.S.

Strategic Cooperation in the Indo-Pacific

• India and U.S. committed to a free, open, and prosperous Indo-Pacific
• India is set to host the Quad Leaders’ Summit, further boosting strategic ties

Energy and Civil Nuclear Collaboration

• Welcomed India’s move to amend civil nuclear liability laws
• Pitched American support for India’s nuclear power ambitions
  • “There is no AI future without energy security,” said Vance
  • Emphasized energy dominance and nuclear collaboration as critical to tech growth

Remarks on Past U.S. Policies

• Criticized past American leaders for failing to defend U.S. workers
• Acknowledged India’s need to fight for its industries under PM Narendra Modi
• Noted previous U.S. governments treated India as just a low-cost labor source

Policy Moves by Trump Administration

• U.S. announced a 90-day pause on steep tariffs on Indian exports
• Trump seeks to rebalance global trade in a way that is mutually beneficial

The visit marks a reset in tone and approach, emphasizing mutual respect, strategic alignment, and a pragmatic roadmap to deeper bilateral cooperation. Focused on long-term economic, energy, and regional security goals

TH

2. Global Economic Outlook Amid US Trade Policy Uncertainties

Challenges in Predicting Future Economic Growth

• US Trade Policy Uncertainty: The imposition of reciprocal tariffs by the US and the uncertainty about trade agreements have significantly complicated the work of economic forecasters and business planners.
• Questions persist regarding the number of trade deals the US will secure and the tariff levels. Further uncertainties arise about the continuation of prohibitive tariffs on China and whether negotiations will be extended.

IMF‘s Economic Assessment: Three Scenarios

• Reference Forecast: The IMF’s April World Economic Outlook (WEO) presents three different scenarios:
  • Reference Forecast (based on announcements as of April 4).
  • Forecast with March data.
  • Post-April 9 Forecast incorporating implications of the tariff pause and additional concessions.

Global Growth Projections

• Global Growth Forecast: The global growth rate is expected to decline from 3.3% in 2024 to 2.8% in 2025, followed by a recovery to 3% in 2026.
• Impact of US Trade Policy: Global growth is revised down by 50 basis points for 2025. The US growth forecast for 2025 has also been reduced by 90 basis points to 1.8%.
• China’s Growth Forecast: China’s growth is projected to slow, with a 60 basis point reduction, expected to grow at 4% in 2025.

Impact on India’s Growth

• India’s Projected Growth: India’s economy is forecasted to grow at 6.2% in 2024, which is 30 basis points lower than earlier projections. However, the overall impact on India remains marginal in comparison to other global economies.

Trade and Inflation Impact

• Global Trade Volumes: The growth in global trade volumes is expected to decline from 3.8% in 2024 to 1.7% in 2025, impacted by the trade policy shock.
  • Global Supply Chains: A significant disruption in global supply chains could occur, leading to reallocation of resources in less competitive ways, ultimately impacting productivity and growth.
  • Higher Inflation: The tariff-related disruptions may contribute to higher inflation, with the US inflation rate projection being revised upwards by 100 basis points.

US Economic and Monetary Impact

• Federal Reserve’s Response: The US Federal Reserve may face increased inflationary pressure, affecting its policy decisions. Chairman Jerome Powell has acknowledged the potential for persistent inflation due to tariffs.
• Impact on US Financial Markets: The uncertainty around US trade policy could cause further volatility in US financial markets and influence the value of the US dollar, potentially tightening financial conditions.

India’s Position and Strategy

• While India’s growth impact is limited so far, it is crucial for policy managers to stay alert to the evolving situation.
• Best Bet for India: The early conclusion of bilateral trade talks with the US is considered to be India’s optimal strategy to mitigate the risks associated with ongoing uncertainties.

BS

National Affairs

1. India, the Arctic, and the Northern Sea Route

Global Trade Reset: Climate and Conflict Converge

• Traditional trade routes are under stress due to geopolitical tensions and U.S. trade headwinds.
• Nations are diversifying supply chains; climate change is accelerating this shift.
• The Arctic is emerging as a new frontier for both commerce and climate diplomacy.

Northern Sea Route (NSR): The Melting Shortcut

• The NSR connects the Atlantic and Pacific through the Arctic Ocean.
• Arctic ice is shrinking at a rate of 12.2% per decade (NASA).
• Cargo on the NSR has grown from 41,000 tonnes (2010) to 37.9 million tonnes (2024).
• Benefits: Shorter route between Europe and Asia, lower costs.
• Risks: Environmental degradation, geopolitical competition.

India’s Arctic Presence: Legacy and Policy

• India signed the Svalbard Treaty in 1920 and operates the Himadri research station in Svalbard.
• India is the only developing nation besides China with Arctic infrastructure.
• The 2022 Arctic Policy focuses on:
  • Scientific research and climate monitoring
  • International collaboration
  • Sustainable development and strategic access

Infrastructure Readiness for Arctic Ambitions

• The 2025–26 Union Budget allocated $3 billion to maritime development.
• Focus areas:
  • Ice-class and ice-breaking vessel development
  • Arctic-suited shipbuilding clusters
  • Maritime workforce training for extreme conditions

Strategic Diplomacy: Balancing Between Russia and the West

• India-Russia cooperation includes:
  • NSR-focused working group
  • Chennai–Vladivostok Maritime Corridor access to NSR ports (Pevek, Tiksi, Sabetta)
• Alignment with Russia may:
  • Signal indirect support for China’s Polar Silk Road
  • Strain relations with Western partners
• Balanced approach recommended:
  • Partner with U.S., Japan, and South Korea
  • Promote inclusive governance within the Arctic Council

Arctic Circle India Forum 2025

• Scheduled for May 3–4 in New Delhi
• Strategic opportunities:
  • Advance India’s Arctic policy implementation
  • Facilitate multilateral dialogue
  • Propose appointment of a ‘Polar Ambassador’
  • Position India as a bridge between developed and developing Arctic stakeholders

Profit vs. Planet

• Climate warning: 2024 global temps breached the 1.5°C threshold (Nature Climate Change)
• India must:
  • Balance economic gains with environmental responsibilities
  • Avoid accelerating irreversible damage to the Arctic ecosystem
  • Pursue sustainable development with like-minded partners

A Delicate Dance with Ice and Influence

• The Arctic represents economic opportunity and environmental risk.
• India’s policy must prioritize:
  • Strategic autonomy
  • Climate responsibility
  • Inclusive diplomacy
• 2025 could be India’s defining year for Arctic action — but only with clarity, caution, and commitment.

TH

2. Section 69 of the Bharatiya Nyaya Sanhita

Context:

Section 69 of the Bharatiya Nyaya Sanhita (BNS), 2023 addresses cases of sexual intercourse under false promise of marriage. Introduced as a separate offence, unlike the Indian Penal Code (IPC) which did not specifically define such a stand-alone provision. The provision introduces a punishment of up to 10 years and fine, separate from the definition of rape under Section 63 BNS.

Judicial Precedents Narrowing Scope

• Supreme Court and High Courts have emphasized the need to differentiate between breach of promise and deliberate deception
• In Anurag Soni v. State of Chhattisgarh (2019), the Court held that false promise must be shown to have existed at the outset
• Long-standing consensual relationships dilute the claim of coercion based on false promise (Rajnish Singh @ Soni v. State of U.P., 2025)
• Relationships maintained despite awareness of other circumstances (e.g., existing marriage) weaken the claim of vitiated consent (Abhishek Arjariya v. State of M.P., 2025)

Redundancy and Constitutional Questions

• Section 28 of BNS already defines “consent” and includes “misconception of fact” as a vitiating factor, encompassing false promises of marriage
• If sexual intercourse under false promise qualifies as rape under Section 63, a separate Section 69 becomes redundant
• Section 69 lacks a non-obstante clause, making it vulnerable to constitutional scrutiny under Article 14 (right to equality)
• No explicit exception in Section 63 to exclude offences under Section 69, raising legal inconsistencies

Operational Concerns and Recommendations

• Legal experts argue that courts are already quashing such FIRs based on established judicial interpretations
• Police should adopt a cautious approach by initiating preliminary inquiry before charge-sheeting such cases
• This prevents unnecessary litigation, reduces judicial burden, and protects rights of both parties

TH

3. India Monsoon Forecast 2025

Context:

The India Meteorological Department (IMD) forecasts 105% of Long Period Average (LPA) rainfall for 2025 (± 5% margin).

• LPA for 1971–2020 stands at 87 cm
• Rainfall classification:
  • Deficient: < 90% of LPA
  • Below Normal: 90–95%
  • Normal: 96–104%
  • Above Normal: 105–110%
  • Excess: > 110%

Forecast Accuracy and Methods

• IMD’s first monsoon forecasts have historically shown discrepancies, accurate only 8 times in 20+ years within ±5% range
• Accuracy improved since 2021 using multi-model ensemble dynamical systems, combining global climate models and statistical tools
• Dr. M.N. Rajeevan, ex-Secretary, Ministry of Earth Sciences, credits this system for reduced errors

Rainfall Trends and Regional Variability

• 2024 monsoon was ‘above normal’ (108%), aiding good harvests
• 2023 monsoon was ‘below normal’, with stark geographical disparities:
  • Excess rainfall: Tamil Nadu, Telangana, Puducherry
  • Deficient rainfall: Bihar, Jharkhand, East UP

Climate Factors Influencing Monsoon

• 2025 is expected to see neutral ENSO (El Nino–Southern Oscillation) conditions
• This means neither El Nino (dry) nor La Nina (wet) will affect monsoon
• Indian Ocean Dipole (IOD) can still impact rainfall patterns — positive IOD supports rainfall

Impact on Agriculture and Food Inflation

• Strong 2024 monsoon led to:
  • 3.6% agricultural output growth
  • 5.7% rise in foodgrain production
  • Easing of food inflation: fell from 8% (Dec 2024) to below 6% (Jan 2025)
• Food inflation dipped below headline inflation in March 2025 — first time since July 2023
• 2024-25 production estimates:
  • Foodgrains: 166 million tonnes
  • Cereals: 159 million tonnes
  • Rice: 121 million tonnes — highest growth in a decade

Challenges and Outlook

• Spatial rainfall distribution remains critical:
  • 2024 excess rain damaged onion crops in Maharashtra
  • Deficient rain delayed paddy sowing in Punjab, Gangetic plains
• Rising temperatures, not just rainfall, now a primary driver of food inflation, says HSBC report

BS

4. India’s Deep-Sea Mining Push

Context:

Carlsberg Ridge, a tectonic boundary between the Indian and African plates, is poised to become India’s third deep-sea mining zone pending ISA approval. India has also applied for a fourth zone, adding to its current two active mineral exploration licences:

• Central Indian Ocean Basin (2002–2027) – focus on polymetallic nodules
• Rodriguez Triple Junction (2016–2031) – focus on polymetallic sulphides

Critical Metals for Green Tech

• Hydrothermal vents, found 3,000–6,000m below sea level, emit superheated, mineral-rich plumes containing cobalt, manganese, copper, zinc, gold, silver, and rare earths.
• These metals are vital for energy transition (e.g., EV batteries, solar panels, wind turbines) and defence systems.
• India currently imports many of these from China, the UK, and Norway.

India’s Deep-Sea Missions

• Early 2000s: Oceanographers ventured into pirate-infested zones without ROVs/AUVs.
• 2024 & beyond:
  • Applications for Carlsberg Ridge and Afanasy-Nikitin Seamount (ANS), a volcanic region with high cobalt and nickel potential.
  • ANS is unusual for its high cobalt levels in low-oxygen waters.

Samudrayaan & Matsya 6000

• Under the ₹4,077 crore Deep Ocean Mission, India is developing:
  • Matsya 6000: A manned submersible for 6,000m dives, undergoing integration and test dives in 2025.
  • Seabed mining system, already tested at 1,200m in the Andaman Sea.
• India joins a select group with manned submersible tech: US, Russia, France, Japan, China.

Technological Milestones & Ecology Balance

• NCPOR filmed the first active vent at 3,000m using an AUV in early 2024.
• India is building a ₹900 crore indigenous research vessel to explore and map seabed biodiversity.
• Researchers discovered nine new marine species, informing ISA’s evolving sustainability guidelines.

Budget Gaps & Global Race

• 2025–26 Budget: Ministry of Earth Sciences allocated ₹3,649.8 crore vs ₹13,416.2 crore for ISRO.
• Despite lower funding, India’s oceanographers aim to match China’s dominant seabed presence within a decade.

Why It Matters

• Deep-sea mining is crucial for India’s Blue Economy goals, technological sovereignty, and clean energy security.
• As the Indo-Pacific’s strategic importance grows, so does the need to secure critical underwater resources amid regional rivalries.

TOI

5. India’s Largest Cruise Terminal Launched

• Inaugurated by: Union Minister Sarbananda Sonowal
• Location: Ballard Pier, Mumbai
• Developed Under: Cruise Bharat Mission
• Investment: ₹556 crores
• Passenger Capacity: 1 million annually, ~10,000 daily
• Infrastructure Highlights:
  • 4 floors: 2 for check-in & immigration (72 counters), 2 for commercial use
  • Can accommodate 5 ships at a time (up to 300m in length, 11m draft)
  • Parking for over 300 vehicles
• Design: Maritime-inspired architecture with wave-themed ceiling, rose gold accents, and interactive selfie points

Heritage and Environmental Initiatives

• Heritage Sites Revamped:
  • Fire Memorial at Victoria Docks (Golden Tears theme)
  • Port House (Ballard Estate) and Evelyn House (Colaba) with façade lighting
• Sagar Upvan Garden Renovated:
  • Features 500+ plant species, Arabian Sea views, pathways, botanical learning areas
  • Developed with Tata Trusts support, includes 25,000 KLD Sewage Treatment Plant

Green Port Initiative

• Shore to Ship Power Supply Launched:
  • Reduces emissions and noise from docked vessels
  • Boosts energy efficiency and operational cleanliness
• Fuel Infrastructure Added:
  • 2 HSD units, 1 gasoline unit, and a fast EV charger

MoUs for Vadhavan Port: ₹5700+ Crore Investment

• Objective: Transform Vadhavan into a top 10 global port
• Projects Signed:
  • ₹4200 crore: Terminal for container, bulk & liquid cargo
  • ₹1000 crore: Bulk & liquid cargo terminal
  • ₹500 crore: Liquid cargo jetty & tank farm (3,00,000 CBM capacity)

Cruise Bharat Mission

• Pillars:
  • Ocean & Harbour Cruises
  • River & Inland Cruises
  • Island & Lighthouse Cruises
• Goals by 2029:
  • 10 international cruise terminals
  • 100 river cruise terminals
  • 5 marinas along the coast
  • 1 million sea cruise and 1.5 million river cruise passengers
  • 5000+ km waterways integrated
  • 4 lakh+ jobs across cruise value chain

Hindustan Times

Banking/Finance

1. Indian Economy’s Resilience Amid Global Trade Tensions

Context:

India’s resilience to global trade wars is largely attributed to its strong domestic growth engines: consumption and investment, which are expected to remain relatively less affected by external economic headwinds. The Report on the State of the Economy released by the Reserve Bank of India (RBI) outlines India’s ability to withstand global economic challenges due to its robust macroeconomic framework and moderating inflation.

Key Factors Supporting India’s Stability:

• Domestic Growth Engines:
  • Consumption and investment are poised to remain strong, helping to buffer the economy against any weakening external demand from global trade disruptions.
• Macroeconomic Stability:
  • India enjoys a low external vulnerability with a modest external debt-to-GDP ratio of 19% and substantial foreign exchange reserves (standing at $677.8 billion as of April 11).
  • This provides a comfortable import cover of nearly 11 months, enhancing India’s financial resilience.
• Strong Services and Remittance Inflows:
  • India continues to benefit from robust services exports and remittance inflows, offering a buffer for the current account.
• Agricultural Sector Outlook:
  • The agricultural sector is expected to maintain its growth momentum due to bumper kharif and rabi harvests and favorable summer sowing conditions. However, risks such as above-normal temperatures and heatwaves in the summer (April-June) are factors to monitor.

Liquidity Measures and Banking System Support

• RBI’s liquidity measures, particularly since mid-January, have supported the money market, contributing to softening interest rates and improved liquidity.
• A reduction in risk weightings for bank loans, effective from April 1, is expected to boost funding for non-banking financial companies (NBFCs).

Investment Destination Appeal

• India’s consistent macroeconomic stability, coupled with its position as the fastest-growing major economy, continues to make it an attractive investment destination.
• The global economic slowdown and macroeconomic vulnerabilities elsewhere have led to increased interest in India, benefiting from its diversified FDI sources and strong trade linkages.

Challenges and Risks

• While the domestic outlook is positive, global uncertainties—including trade tensions and geopolitical instability—remain downside risks to India’s growth prospects.
• The rise in temperatures and the potential impact of heatwaves this summer could affect agricultural output and overall economic activity.

Opportunities for India

• Supply chain realignments, diversified FDI sources, and continued engagement with global investors seeking resilience and scale offer opportunities for India to capitalize on global volatility.
• Calibrated policy support can further strengthen India’s position and enhance its role in the emerging world economic landscape.

BS

2. Private Banks Slow Hiring in FY25 Despite Branch Expansion

Context:

India’s top private banks, HDFC Bank and ICICI Bank, significantly slowed down hiring in FY25, even as they expanded branch networks, reflecting a shift toward productivity enhancement and tech-driven efficiency.

Key Reasons for Hiring Slowdown

According to Suresh Ganapathy, Head of Financial Services Research, Macquarie Capital:

• Productivity and efficiency improvements have reduced manpower requirements.
• Non-replacement of resigning employees as a cost-saving measure.
• Increased use of AI and technology to drive growth:
  • ICICI Bank has doubled tech expenses as a share of operational spend (from 5% to 10.5%) over 5 years.
  • Absolute tech spending has risen 4x in the same period.

State-Owned Banks: Similar or Different?

• SBI’s workforce has been shrinking steadily:
  • FY20: 249,448 employees
  • FY24: 232,296 employees
  • Net loss: 17,152 employees over 5 years
• RBI data suggests that while private banks’ workforce has grown 2.78x over a decade, overall hiring has now plateaued.

Outlook

• The slowdown in hiring at HDFC Bank and ICICI Bank may indicate a larger structural shift in India’s banking sector.
• As automation, AI, and digital banking scale, the need for large frontline teams may be diminishing.
• Analysts are closely watching Axis Bank, SBI, and other major lenders’ Q4FY25 results to assess whether this trend will extend sector-wide.

BS

3. RBI Relaxes LCR Norms to Boost Bank Liquidity and Credit Growth

Context:

The Reserve Bank of India (RBI) has revised its Liquidity Coverage Ratio (LCR) norms, easing the regulatory burden on banks and freeing up substantial capital. These changes are especially relevant in light of increased digital banking activity and the need for robust liquidity management.

Key Highlights:

Reduced Run-Off Factors for Digital Deposits

• Stable retail deposits with internet/mobile banking: Run-off factor reduced from 10% (draft) to 7.5%.
• Less stable digital deposits: Increased to 12.5%, up from the current 10%, but lower than the proposed 15%.
• Impact: This lowers the requirement for banks to hold liquid assets against these deposits, boosting liquidity.

Lower Run-Off Rate for Non-Financial Entities

• Deposits from trusts, partnerships, LLPs, and similar bodies will now attract a 40% run-off factor, down from 100%.
• Significance: This frees up high-quality liquid assets (HQLAs), making it cheaper for banks to meet LCR norms.

Effective Date and Implementation

• New norms will come into force from April 1, 2026, giving banks ample time to adjust their internal systems.

Estimated Impact on Banking Sector:

• Improvement in system-wide LCR by approximately 6 percentage points.
• Potential release of ₹2.7–3.0 lakh crore (₹2.7–3.0 trillion) in lendable resources.
• Expected to boost credit growth by 1.4–1.5%.
• Banks can maintain regulatory LCR requirements comfortably, ensuring stability during digital fund withdrawals.

Contextual Reference

• This policy shift also reflects learnings from the collapse of Silicon Valley Bank (SVB) in the US, which was triggered by a digital bank run.

Industry Reaction

• The move has been widely welcomed by the banking sector, which had earlier raised concerns over the stringent draft norms.
• Analysts and credit rating agencies, including ICRA, have projected positive outcomes for liquidity and credit expansion.

• Major beneficiaries:
  • SBI, HDFC Bank, and ICICI Bank are expected to benefit from the Reserve Bank of India’s updated Liquidity Coverage Ratio (LCR) norms.
• Reduction in runoff factor:
  • RBI reduced the runoff factor on deposits from non-financial entities like trusts, partnerships, and LLPs from 100% to 40%.
  • These changes are expected to unlock ₹4 trillion in liquidity for banks from the ₹10 trillion held in such deposits.
• IMB-linked deposits adjustment:
  • An additional 2.5% runoff rate will be applied to retail deposits accessed via internet and mobile banking (IMB).
• Implementation timeline:
  • New LCR norms come into effect from April 1, 2026, providing banks with ample transition time.
• Impact on sector liquidity:
  • Sector-wide LCR is projected to rise by 6%, with all banks expected to meet the minimum liquidity requirement by December 2024.

TET & Mint

4. RBI’s Standing Deposit Facility (SDF)

Context:

Banks’ average SDF placements rose to ₹2.13 trillion in March 2025, up from ₹1.12 trillion in February. SDF accounted for 82.6% of the total liquidity absorbed under RBI’s Liquidity Adjustment Facility (LAF) during H2FY25.

Key Drivers Behind Higher SDF Reliance

• 24×7 payment systems have increased transaction unpredictability, prompting precautionary fund parking.
• Just-in-time treasury transfers reduce float money availability with banks.
• Banks are opting for overnight liquidity comfort due to fear of late-hour reserve shortfalls.

Shift from Longer-Tenor Instruments

• Banks are less inclined to use Variable Rate Reverse Repo (VRRR) operations due to SDF’s immediate liquidity flexibility.
• Indicates a preference for short-duration, non-collateralized options in tight liquidity scenarios.

RBI’s Operational Framework Enhancements

• Since April 2022, the SDF replaced the fixed-rate reverse repo as the floor of the LAF.
• The SDF rate is 25 basis points below the repo rate; MSF is 25 bps above, re-establishing the 50 bps LAF corridor.

Strategic Impact and Liquidity Implications

• The increased reliance on SDF reflects a cautious liquidity management approach amid structural shifts in banking operations.
• The RBI’s revised liquidity tools align with global best practices of providing non-collateralized overnight deposit facilities.

BS

5. Rupee’s Real Effective Exchange Rate (REER) Declines

Context:

The REER of the Indian rupee dropped to 101.49 in March 2025, down from 102.37 in February, as per RBI’s monthly bulletin. The REER had peaked at 108.14 in November 2024, before steadily falling through December (107.2) and January (103.66).

Market Commentary and Economic Insights

• According to Sakshi Gupta, Principal Economist at HDFC Bank, the rupee initially depreciated in March but stabilized later due to capital inflows.
• She noted that in April, the REER is expected to remain stable as global currencies are broadly steady or strengthening.

Inflation Differential Impact

• The drop in the 40-currency REER also reflects the narrowing inflation gap between India and key trading partners, enhancing rupee competitiveness.

RBI’s Forex Market Operations

• The RBI’s net short dollar position in the forward market increased to $88.7 billion at the end of February, up from $77.5 billion in January.
• In the spot market, the RBI:
  • Net sold $1.6 billion in February, following a net sale of $11.1 billion in January.
  • Conducted total forex transactions worth $45 billion (buying) and $46.6 billion (selling) in February.

Yearly Intervention Summary

• For FY24, the RBI net purchased $41.27 billion in the foreign exchange market.
• February 2024 alone saw a net purchase of $8.5 billion by the central bank.

Breakdown of RBI’s Forward Dollar Positions

• Of the $88.7 billion forward exposure:
  • $14.7 billion in one-month contracts
  • $18.8 billion in one-to-three-month tenures
  • $45 billion spread across three-month to one-year swaps
  • $10 billion in contracts of more than one year

BS

6. Sharp Decline in Net FDI to India: RBI

Context:

Net foreign direct investment (FDI) into India fell sharply to $1.5 billion during April 2024–February 2025, compared to $11.5 billion in the same period the previous year. The decline is attributed to higher repatriation by foreign investors and increased outward FDI by Indian firms.

Gross FDI Remains Strong

• Gross FDI inflows rose 15.2% year-on-year to $75.1 billion during the 11-month period.
• In comparison, the gross FDI inflow was $65.2 billion during April 2023–February 2024, according to RBI data.

Country-wise and Sector-wise FDI Breakdown

• Singapore emerged as the top equity investor, contributing 29.8% of inflows, followed by Mauritius and the United States.
• Manufacturing sector attracted the highest share of FDI (24.1%), followed by financial services and electricity sectors.

Increase in Repatriation and Outward FDI

• Repatriation/disinvestment by foreign investors in India increased to $48.9 billion, up from $40.7 billion a year ago.
• Outward FDI by Indian firms surged to $24.8 billion, compared to $13 billion in the previous year.

Global Investment Shift

• The United States continues to be the top global destination for inward FDI and is now the second-largest destination for Indian ODI.
• The shift in global capital flows is influenced by recent US policy announcements, leading multinationals to redirect investments toward the US.

BS

7. RBI Directive on Domain Migration for Banks

• The Reserve Bank of India (RBI) has instructed all banks to begin migrating their existing domains to the .bank.in domain by October 31.
• Purpose: This move aims to strengthen the cybersecurity framework and boost public confidence in digital banking and payment systems.
• Action Required: Banks need to initiate the registration process with the Institute for Development and Research in Banking Technology (IDRBT) by contacting them at sahyog@idrbt.ac.in.

This initiative is a step towards enhancing the security and trustworthiness of the digital banking ecosystem in India.

BL

8. India’s Bank Deposit Insurance

Overview: Purpose and Current Framework

• Objective: Protect depositors and ensure financial stability during banking crises.
• Administered by: Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI.
• Current Insurance Limit: ₹5 lakh per depositor, per bank (last revised in 2020).
• Coverage (2023-24):
  • By Number of Accounts: 98% covered
  • By Value of Deposits: Only 43% insured

Key Issues and Gaps in the Deposit Insurance Framework

• Value Disparity:
  • 2% of depositors hold 57% of total bank deposits.
  • These high-value depositors are left largely unprotected under the current cap.
• Declining Coverage Ratio:
  • Down from 50% in 2020-21 to 43% in 2023-24.
  • Indicates growing vulnerability among large depositors.
• Global Comparison:
  • India lags behind BRICS peers:
    • Brazil: ₹42 lakh equivalent
    • Russia: ₹12 lakh equivalent

Reactive vs. Proactive Shifts

• Past Revisions:
  • 2020: After PMC Bank crisis (raised from ₹1 lakh to ₹5 lakh)
  • 1993: After Bank of Karad failure (raised from ₹30,000 to ₹1 lakh)
• Critique: Changes have often been reactionary, not strategic.
• Current Debate: Another hike under consideration—motivated by:
  • Competition from mutual funds and equities
  • Increased household savings in deposits (grew from 28% to 41% between 2021–2024)
  • Recent collapses like New India Co-operative Bank

Risks of Raising the Cap

• Moral Hazard:
  • Depositors may neglect due diligence on bank health.
  • Banks may engage in riskier lending or investment, knowing deposits are insured.
• Policy Dilemma: Balance between instilling trust and avoiding complacency.

Rethinking the Deposit Insurance Philosophy

• From Backstop to Trust Anchor:
  • India needs a comprehensive, calibrated deposit insurance framework.
  • Must cater to both retail and high-value depositors.
  • Reinforce confidence without encouraging systemic risk.
• Policy Recommendation:
  • Shift from crisis-response to risk-prevention.
  • Align deposit insurance with rising savings, inflation, and financial complexity.

Mint

9. Reforms to Strengthen Compliance and Dispute Resolution: SEBI

Context:

The Securities and Exchange Board of India (SEBI) has recently announced important updates aimed at enhancing compliance and resolving disputes efficiently in the securities market. These reforms focus on expanding automated trading restrictions and proposing a direct arbitration mechanism for specific types of complaints.

Extension of Automated Trading Window to Immediate Relatives

SEBI has extended the closure of the automated trading window to include immediate relatives of designated persons (DPs) in listed companies. This reform aims to prevent insider trading by expanding the scope of individuals who are prohibited from trading during specific periods when unpublished price-sensitive information (UPSI) is accessible.

Key Features:

• Immediate Relatives Included:
  • Spouses, children, parents, and siblings of DPs who are financially dependent or consult DPs for trading decisions.
• Phase-wise Implementation:
  • Phase 1 (July 1, 2025): The framework will apply to the top 500 listed companies by market capitalization.
  • Phase 2 (October 1, 2025): The rules will extend to all listed companies.
• Data Upload Requirements:
  • Companies must upload details of DPs and their immediate relatives, including PAN, names, and demat accounts.
• Automated Freezing:
  • Stock exchanges and depositories will ensure that trading windows are frozen based on the uploaded data. Any updates to this data must be processed within two trading days.
• Exemptions:
  • Exemptions from the trading window closure can be requested and will automatically be reversed after the exemption period.

Impact: This extension ensures comprehensive protection against insider trading risks, especially for high-value transactions involving immediate family members of designated persons.

10. Direct Arbitration for High-Value and Chronic Complaints

Context:

SEBI has proposed introducing direct arbitration for resolving certain types of complaints, specifically targeting high-value claims and chronic cases. This initiative is designed to expedite dispute resolution, particularly for disputes involving amounts over ₹10 crore.

Key Features:

• Criteria for Direct Arbitration:
  • Claims over ₹10 crore
  • Chronic or repetitive complaints
  • Disputes filed by specific institutions or trading members
  • Time-barred or legal issues identified early
  • Complaints where both parties agree to arbitration
• Role of ODR Portal: SEBI plans to integrate depositories into the Online Dispute Resolution (ODR) system and establish Standard Operating Procedures (SOPs) for handling such disputes.
• Simplified Process: If a party refuses arbitration, the complaint will be closed on the ODR portal, but the case can still be pursued through other legal channels.
• Annual Review of SOPs: The SOPs for dispute handling will be available online and reviewed annually to ensure efficiency and clarity in the process.

Impact: The proposal will streamline dispute resolution for complex or high-stakes cases, ensuring faster and more efficient arbitration processes. This reform is expected to reduce the burden on courts and improve overall market confidence.

Outlook

SEBI’s initiatives aim to bolster market integrity by enhancing compliance and providing more efficient avenues for dispute resolution. These reforms, especially the extension of automated trading restrictions and the introduction of direct arbitration, will contribute significantly to the protection of investors and the overall stability of India’s securities markets.

11. Jharkhand Govt Sign MoU with SBI

Context:

In a landmark move towards employee welfare, the Jharkhand government signed a Memorandum of Understanding (MoU) with the State Bank of India (SBI) on Thursday, enhancing the salary package benefits for state government employees. The agreement was formalized in the presence of Chief Minister Hemant Soren and key state and bank officials.

Key Highlights of the MoU

• Eligibility:
  • All state government employees with salary accounts at SBI.
• Primary Benefits:
  • Accidental insurance coverage up to ₹1 crore
  • Health and life insurance benefits
  • Enhanced banking services at no extra cost
• Signatories:
  • Rajeshwari B (Special Secretary, Finance Department) and Devesh Mittal (Deputy GM, SBI) signed the MoU.
• Witnessed By:
  • CM Hemant Soren, Finance Minister Radhakrishna Kishore, Chief Secretary Alka Tiwari, SBI’s CGM K.B. Bangaraju, and other senior officials.

Chief Minister’s Remarks

• Commitment to Welfare:
  • CM Hemant Soren called the MoU a “new chapter in financial security” for government staff and reiterated the state’s dedication to employee welfare.
• Insurance Impact:
  • He highlighted that the insurance cover will provide critical financial support to families in case of employee fatality during service.
• Addressing Modern-Day Uncertainty:
  • The CM acknowledged the increasing unpredictability in today’s world, stressing the need for financial safeguards.
• Appreciation of SBI:
  • Soren praised SBI for partnering in this initiative, especially in a “backward state like Jharkhand.”

Broader Vision for Governance and Morale

• CM emphasized the pivotal role of government employees in implementing state policies.
• Urged all employees to continue serving with integrity and dedication.
• Assured ongoing efforts to create a secure and respectful work environment.

This MoU stands as a significant milestone in government employee welfare in Jharkhand, aligning with the broader vision of social security and institutional support. It also marks an effective collaboration between the government and public sector banking to bolster financial inclusion and employee morale.

12. AU Small Finance Bank Launches Exclusive Concierge Service for Premium Banking Clients

Context:

India’s largest small finance bank, AU Small Finance Bank (AU SFB), has launched an elite Concierge Service under its premium banking programs – AU ivy and AU Eternity. This strategic move aims to redefine luxury banking for ultra-high-net-worth individuals (UHNIs) by delivering personalized, lifestyle-driven services that extend well beyond traditional banking.

Concierge Services: Redefining Premium Banking

The new Concierge Services are designed to cater to the diverse preferences and evolving expectations of AU SFB’s affluent clientele. They provide swift, effective assistance in areas ranging from global travel arrangements to lifestyle experiences, enhancing day-to-day convenience and elevating the overall customer journey.

Key Offerings Under AU ivy and AU Eternity

• Global Travel & Luxury Accommodation
  • Tie-ups with luxury hotels and private villas
  • Personalized itinerary and travel planning
• Overseas Education Assistance
  • End-to-end support for students including research, planning, and post-departure coordination
• Gourmet Dining Privileges
  • Exclusive culinary experiences and fine dining offers via top-tier partners
• Airport Services
  • Complimentary cab transfers, priority lounge access, and premium meet & greet services
• Golfing Access
  • Entry to renowned golf courses through established service providers
• Shopping & Gifting Experiences
  • Offers on luxury brands, early access to new collections, and curated gift services
• Luxury & Lifestyle Experiences
  • Access to private events, celebrity chef sessions, limousine services, and yacht charters
• RSVP Events
  • Invitations to high-end social events, private screenings, and bespoke dinners
• Cutting-edge Digital Solutions
  • Tailored tech-based banking for an elevated user experience

Strategic Impact

With this offering, AU SFB:

• Reinforces its position as a customer-first, innovation-driven financial institution
• Deepens its engagement with the premium and UHNI segment
• Differentiates itself through luxury, lifestyle, and bespoke banking experiences

About AU Small Finance Bank (AU SFB)

AU Small Finance Bank Limited (AU SFB) is India’s largest small finance bank and a scheduled commercial bank, recognized for its pioneering efforts in inclusive and digital-first banking since the launch of its banking operations in April 2017.

Founding

• Founded: 1996 by Mr. Sanjay Agarwal, a first-generation entrepreneur
• Banking Operations Commenced: April 2017
• Experience: 29 years of financial services excellence

13. MobiKwik Partners with Poonawalla Fincorp to Launch Instant Personal Loans

Context:

Fintech platform MobiKwik has announced a strategic partnership with Poonawalla Fincorp to provide instant personal loans of up to ₹15 lakh to users across India. This initiative, aimed at financial inclusion, especially targets customers in Tier II, Tier III, and smaller towns.

Key Features of the Loan Offering

• Loan Amount Range: ₹50,000 to ₹15,00,000
• Service Name: ZIP EMI – MobiKwik’s personal loan offering
• Availability: Nationwide via the MobiKwik mobile app
• Customer Segments: Diverse income groups across semi-urban and rural markets

About MobiKwik

• Founded: 2009
• Founders: Bipin Preet Singh and Upasana Taku
• Services: Digital wallet, UPI, pocket UPI, and Zaakpay (payment gateway)
• User Base: Over 172 million registered users
• Merchant Network: 4.5 million+ merchants
• Reputation: Recognized as India’s largest digital wallet provider

Economy

1. IMF Revises India’s FY26 Growth Forecast Down to 6.2%

IMF’s Growth Forecast for India

• The International Monetary Fund (IMF) has lowered India’s FY26 GDP growth forecast by 30 basis points, bringing it down to 6.2% from its previous projection of 6.5%.
• The revision comes as a result of increased global trade tensions and mounting uncertainty, as noted in the latest World Economic Outlook (WEO) report.

Factors Impacting Growth Outlook

• Private consumption, particularly in rural areas, remains a strong driver of growth in India.
• However, the IMF cautioned that the global economic environment, marked by higher trade tensions and policy ambiguity, has contributed to this downward revision.
• The IMF’s global growth forecast for 2025 has also been downgraded from 3.3% to 2.8%, reflecting the broader economic slowdown.

Global Growth Trends and India’s Position

• The IMF’s revised global forecast reflects a broad-based downgrade across countries, mainly due to the effects of new trade measures, trade linkages, and rising economic uncertainty.
• The global growth is expected to recover slightly to 3% in 2026, but this is still lower than the previous projection.

Comparison with Other Forecasts

• India’s revised forecast by the IMF is now 6.2%, down from 6.5% previously. Other agencies have also adjusted their projections:
  • Moody’s: Reduced to 5.6% from 6.6%
  • ADB: Adjusted to 6.7% from 7%
  • Fitch: Adjusted to 6.4% from 6.5%
  • UBS: Downgraded to 6% from 6.3%

IMF’s Global Economic Outlook

• Pierre-Olivier Gourinchas, IMF’s Economic Counsellor, remarked that the world economy is entering a “new era”, as global economic systems undergo a reset due to escalating trade tensions.

The IMF’s revised growth projection for India reflects the evolving global challenges, but India remains one of the key economies showing relative stability in the face of these uncertainties.

BS

2. Gold Prices Surge Amid Global Uncertainties

Context:

On Tuesday, gold prices surged above the psychological mark of ₹1 lakh per 10 grams for the first time, as the U.S. dollar weakened, influenced by Treasury bond sell-offs and ongoing tariff-related uncertainties.

• Spot Price: ₹1,01,245 per 10 grams for 24-carat gold.
• Futures Price: ₹99,000 per 10 grams.

Comparison to Previous Price Surges

• This surge mirrors the first wave of COVID-19 when gold breached the ₹50,000 mark in July 2020 amid global economic contraction, a weaker dollar, and supply chain disruptions.
• Gold has experienced a 30% surge this year, with the rally continuing for 128 weeks, signaling further potential rise until more clarity on economic conditions is achieved.

Factors Driving Gold’s Price Rally

• Weakening U.S. Dollar: The U.S. dollar fell to a three-year low below 98, boosting gold’s appeal.
  • Trump’s Influence: President Trump increased pressure on the Federal Reserve, calling for drastic rate cuts and even suggesting the potential replacement of Fed Chair Jerome Powell.
  • Trade War Tensions: Amidst ongoing trade disputes, China criticized U.S. tariffs and warned against deals that might undermine its interests, further strengthening safe-haven demand for gold.

Analyst Insights

• Renisha Chainani, Head of Research at Augmont, noted that gold has crossed $3,500 an ounce due to these factors, marking significant growth.
• Anitha Rangan, economist at Equirus Securities, indicated that gold’s rise is driven by reserve accumulation, geopolitical tensions, and comparisons to past rallies.
  • Gold’s Reserve Share: As of 2024, gold’s share in reserves has risen to over 18%, up from 12% in 2019, reflecting a steady increase since 2021.

Outlook for Gold Prices

• Short-Term Outlook: The short-term outlook for gold remains strong, especially if U.S.-China trade tensions escalate.
• Long-Term Bullish Sentiment: Analysts like Satish Dondapati, fund manager at Kotak Mahindra Asset Management, believe gold’s long-term outlook is bullish, supported by central bank purchases and ongoing geopolitical uncertainties.

The surge in gold prices underscores its role as a safe-haven asset during times of global uncertainty, with strong demand expected to persist as economic and political tensions continue.

Agriculture

1. Samunnati Launches Transformative FPO Partnership Model for Sustainable Agri-Value Chain Growth

Context:

Samunnati, a leading agri value chain enabler, has unveiled its FPO Partnership Model—a first-of-its-kind initiative aimed at redefining the way Farmer Producer Organisations (FPOs) engage with the agriculture market ecosystem. The model introduces a shared value creation framework, positioning FPOs as equal collaborators rather than passive beneficiaries.

Key Features of the FPO Partnership Model

• Shared Value Framework: Moves beyond traditional credit-based models to a profit-sharing structure post cost recovery
• End-to-End Integration: Covers direct procurement, processing, storage, and market sales
• Farmer Empowerment: Ensures daily payments, access to working capital, and equitable revenue distribution
• Trust & Traceability: Strengthens institutional capacity and professional operations for long-term sustainability

Pilot Project with Maathota FPC in Andhra Pradesh

• Location: Visakhapatnam district, Andhra Pradesh
• Primary Crops: Coffee, turmeric, and black pepper
• Economic Impact:
  • Procurement and sales worth ₹4–4.5 crore
  • Farmers earned 10–15% higher average profit per acre
  • Reduction in distress selling
  • Transparent and timely payments to tribal farmers

Strategic Benefits

• De-risked FPO Operations: Integrated finance and advisory support
• 2–3x Value Creation: Compared to conventional credit models
• Institutional Strengthening: Builds negotiation leverage and operational independence for FPOs

Nationwide Expansion Plans

• Samunnati to expand model across diverse crops, geographies, and FPO maturities
• Offers tailored partnerships using its digital tools, market linkages, and vast FPO network
• Current outreach: Over 30,000 FPOs across India

The FPO Partnership Model by Samunnati marks a paradigm shift in India’s agri-finance landscape. By transforming FPOs into co-owners of the agri value chain, the model not only boosts rural incomes but also embeds sustainability, professionalism, and equity at the grassroots level. It sets a precedent for how farmer collectives can thrive as strategic players in a modern agricultural economy.

BL

Facts To Remember

1. Govt. re-appoints Rabi Sankar as RBI Deputy Governor

The Centre has re-appointed T. Rabi Sankar as Deputy Governor, Reserve Bank of India (RBI), for a period of one year with effect from May 3, 2025, or until further orders, whichever is earlier.

2. IMF cuts global growth projections, warns of increased recession risk due to US trade war

The International Monetary Fund (IMF) has cut its growth projections across the board in response to the trade war sparked by US President Donald Trump’s steep tariffs on virtually all trading partners.

3. India finish ISSF World Cup Peru leg in 3rd place with 7 medals

India finished their campaign of the Peru leg of the International Shooting Sport Federation (ISSF) World Cup in third place in the overall standings with a total of seven medals: two gold, four silver and one bronze.