Daily Current Affairs (DCA) 23 October, 2025

Daily Current Affairs Quiz
23 October, 2025

National Affairs

1. Global Forest Resources Assessment (GFRA) 2025

Source: PIB

Context:

India has made remarkable strides in forest conservation. According to the Global Forest Resources Assessment (GFRA) 2025 by the FAO, India now ranks 9th in total forest area globally and 3rd in annual forest gain. This reflects decades of policy-driven efforts to restore and expand forests across the country.

What is GFRA 2025?

• A global assessment of forests, covering 236 countries.
• Tracks forest extent, management, and usage trends.
• Combines satellite imagery, national reporting, and statistical modelling.
• 2025 edition marks 80 years of continuous monitoring.

Global Forest Trends

• Total Forests: 4.14 billion hectares; tropical forests make up 45%.
• Top Forest Holders: Russia, Brazil, Canada, USA, China (over half of global forests).
• Deforestation Rate: Slowed to 10.9 million hectares annually (2015–2025).
• Forest Gain: 6.78 million hectares added per year, mainly via restoration in Asia and Europe.
• Planted Forests: 8% of global forests; Asia contributes 23%.
• Protected Areas: 813 million hectares (20% of forests) legally protected.
• Carbon Storage: Forests store 714 Gt of carbon (46% soil, 44% biomass).
• Ownership: 71% public, 24% private or community.

Global Challenges: land conversion, forest degradation, biodiversity loss, and uneven funding.

India’s Forest Achievements

• Forest Cover Growth: Driven by programs like Green India Mission, CAMPA, and NAP.
• Community Empowerment: Schemes like Van Dhan Yojana and Joint Forest Management involve local communities in forest care while providing livelihoods.
• Sustainability Measures: India integrates biodiversity corridors, mangrove protection, and carbon sinks, contributing to its climate commitments.
• Technology Use: Platforms like Bhuvan and AI-powered forest mapping help track forests, detect degradation, and ensure transparent governance.

Challenges for India

• Deforestation Hotspots: Agriculture expansion and mining still threaten tropical forests.
• Forest Degradation: Wildfires, pests, and climate stress affect forest quality.
• Funding Gaps: Restoration projects often lack sustained financial support.
• Biodiversity Threats: Habitat fragmentation continues despite increasing forest cover.

Way Forward

• Community Forestry: Engage local communities in sustainable management and livelihoods.
• Carbon Accounting: Use satellites and AI to measure forest carbon accurately.
• Global Collaboration: Share knowledge with other tropical nations to boost restoration.
• Eco-Tourism: Promote tourism that benefits conservation and local incomes.
• Policy & Finance: Strengthen legal frameworks and create cross-country funding solutions.

2. India’s Critical Mineral Recycling Scheme

Source: ET

Context:

The Union Ministry of Mines has stated that feedstock availability for the ₹1,500 crore Critical Mineral Recycling Incentive Scheme will be ensured through the formalisation of collection under the Extended Producer Responsibility (EPR) framework. This step aims to strengthen India’s domestic recycling ecosystem and support local critical mineral recyclers.

Key Highlights:

• Formalising Feedstock Collection:
  • Integration of e-waste, spent lithium-ion batteries (LIBs), and catalytic converters into the recycling ecosystem will boost local upstream recyclers, including dismantlers, crushers, and shredders.
  • Collection will be regulated under EPR rules, obligating extraction of specific end-products from waste.
• Current Industry Challenges:
  • Domestic recyclers have flagged concerns such as:
    • Informal feedstock collection
    • Technology and skill gaps
    • Caps on incentives
• Scheme Implementation & Incentives:
  • The scheme, approved in September 2025, has started accepting applications.
  • Customs duty elimination on LIB scrap (2025–26 budget) will facilitate imports.
  • The government expects increased participation from private recycling companies that already operate scrap collection efficiently.
• Feedstock Availability:
  • India generates 1.75 million tonnes of e-waste and about 60 kilotonnes of spent LIBs annually.
  • The Centre expects feedstock availability to increase manifold over the next 4–5 years, reducing dependency on exports of black mass.
• Expected Impact:
  • Boosts domestic critical mineral extraction from waste.
  • Encourages formalisation of the upstream recycling sector.
  • Supports India’s green and circular economy goals.

3. Water ATM Initiative

Context:

Innovative projects in Jharkhand and Maharashtra are turning coal mine discharge from a waste concern into a resource for clean drinking water and sustainable livelihoods. Initiatives such as Water ATMs by ACIC IIT-ISM Dhanbad and mine-water fisheries are leading the way.

Water ATM Initiative

Automated water-vending machines that purify and dispense treated mine water to communities at nominal costs, ensuring affordable access to clean drinking water.

Launch & Collaboration:

Developed under the Atal Community Innovation Centre (ACIC) at IIT-ISM Dhanbad in partnership with the Dhanbad Municipal Corporation (DMC).

Purpose:

• Convert discharged mine water into safe potable water.
• Promote community health and hygiene.
• Establish a circular water economy in mining regions.

Key Features:

• PARAM JAL Model: Treats multi-level mine water and dispenses 10 litres for ₹10 via coins or UPI.
• 24×7 Operation: Ensures constant access to clean water in rural and mining-affected areas.
• Advanced Filtration & IoT Monitoring: Maintains water quality standards.
• Community Empowerment: Encourages women-led entrepreneurship and self-help group (SHG) participation for local management.

4. Draft Labour Policy ‘Shram Shakti Niti’

Source: TH

Context:

The Ministry of Labour and Employment has released a draft national labour policy, titled Shram Shakti Niti, which seeks to modernize India’s labour framework by building a fair, inclusive, and future-ready employment ecosystem.

Key Objectives and Vision

The draft policy envisions a system where every worker—formal, informal, or gig-based—has access to dignity, protection, and opportunity. It aims to transform the Ministry’s role from a regulator to a facilitator of employment, using digital tools and artificial intelligence (AI) to seamlessly connect workers, employers, and skill-training institutions.

Digital and Data-Driven Employment Ecosystem

A central feature of the draft is the expansion of the National Career Service (NCS) into a Digital Public Infrastructure for Employment.
This initiative represents a shift towards a data-driven and worker-centric approach, aimed at reducing information asymmetry in the labour market and improving matching efficiency between job seekers and employers.

AI and Labour Market Transformations

According to the World Bank’s South Asia Development Update (October 2025):

• Only 7% of jobs in South Asia are highly exposed to automation.
• Around 15% of jobs are AI-human complementary, meaning productivity increases when technology supports human work.
• AI-related roles offer a 30% wage premium over other white-collar positions.
• Indian firms are transitioning from business process outsourcing (BPO) to knowledge process outsourcing (KPO)—raising skill requirements but reducing entry-level opportunities.

The Shram Shakti Niti aims to bridge these gaps through targeted skilling and reskilling programmes, especially in semi-urban and rural areas, aligning skills with industry needs.

Skill Development and Education Initiatives

The draft encourages:

• AI-enabled job matching and digital credentialing for transparency.
• Entrepreneurship support for women and youth.
• Integration of AI education at school and university levels, including:
• AI in CBSE curriculum from Class III onward.
• Inclusion of AI and data science in undergraduate programmes to prepare an AI-ready workforce.

Social Security and MSME Support

The draft proposes:

• Universal and portable social security coverage.
• Simplified compliance for micro, small, and medium enterprises (MSMEs).
• Policy support for green and technology-led transitions in employment sectors.

Banking/Finance

1. WACR Now Better Aligned with Repo Rate: RBI Report

Source: BS

Context:

The Reserve Bank of India (RBI) has noted that the Weighted Average Call Rate (WACR) showed improved alignment with the policy repo rate during the period September 16–October 16, according to its State of the Economy report released on Monday.

Weighted Average Call Rate (WACR)

• The WACR — The Weighted Average Call Rate (WACR) is the average interest rate at which banks borrow and lend funds to each other overnight in the uncollateralised call money market.
• Late September: The WACR rose above the repo rate, reflecting temporary liquidity tightness caused by tax outflows and increased short-term demand for funds.
• Early October: As liquidity improved, the WACR fell below the repo rate, prompting the RBI to conduct two Variable Rate Reverse Repo (VRRR) auctions (on October 9 and 15) to absorb excess liquidity.

Secured Overnight Rupee Rate (SORR)

• The Secured Overnight Rupee Rate (SORR) — a collateralised overnight rate based on repo transactions — moved broadly in line with the uncollateralised WACR, indicating a stable short-term money market environment.
• This alignment suggests effective monetary transmission under the revised liquidity management framework introduced on September 30, 2025.

Money Market Yield Developments

• T-Bills: The average yields on 3-month Treasury Bills eased, reflecting improved liquidity and stable short-term funding conditions.
• Certificates of Deposit (CDs) and Commercial Papers (CPs):
  • Yields on 3-month CDs and CPs (issued by NBFCs) hardened, showing tighter credit conditions in the private sector.
  • The risk premium — defined as the spread between 3-month CP and 91-day T-Bill yields — widened, indicating rising credit risk perceptions or selective risk pricing by investors.

Difference Between WACR and SORR

Feature	WACR	SORR
Type of Market	Uncollateralised (Call Money Market)	Collateralised (Repo Market)
Security	No collateral	Backed by government securities
Administered by	RBI	FBIL
Use	Operating target of monetary policy	Benchmark reference rate
Risk Level	Higher (credit risk involved)	Lower (secured by collateral)

2. Mutual Funds Seek Wider Operational Flexibility from SEBI

Source: BS

Context:

India’s mutual fund (MF) industry has urged the Securities and Exchange Board of India (SEBI) to relax restrictive clauses in its regulations governing asset management companies (AMCs). The move comes amid a broader review of Regulation 24(b) of the SEBI (Mutual Fund) Regulations, which limits AMCs’ participation in non-core businesses.

Regulation 24(b) of SEBI (Mutual Fund) Regulations, 1996

Regulation 24 of the SEBI (Mutual Fund) Regulations, 1996 governs the general responsibilities and obligations of Asset Management Companies (AMCs) — the entities responsible for managing mutual fund schemes in India.
Sub-clause (b) specifically outlines restrictions on business activities of AMCs to ensure investor protection and prevent conflicts of interest.

Industry’s Key Demands

Top mutual fund houses have made submissions to SEBI as part of its ongoing consultation, seeking greater operational and strategic freedom to expand both domestically and globally.

Key relaxations sought include:

• Easing restrictions on AMC mergers and acquisitions (M&A).
• Allowing wealth management and custom portfolio management for high-net-worth individuals (HNIs).
• Permitting cross-distribution of investment products from other AMCs.
• Enabling new value-added services and global fund advisory.

Background: SEBI’s July 2025 Consultation

In July 2025, SEBI released a consultation paper proposing limited relaxations under Regulation 24(b). The proposals included:

• Allowing AMCs to manage certain non-broad-based pooled funds such as family offices and offshore vehicles without obtaining a separate PMS (Portfolio Management Services) licence.
• Permitting AMCs to act as global distributors for funds managed by themselves or their subsidiaries, under strict regulatory oversight.

However, the industry’s latest representations go beyond these proposals, urging a comprehensive overhaul of the Mutual Fund Regulations to reflect the evolution of asset management.

Industry’s Broader Rationale

AMCs in India have evolved from managing traditional mutual fund schemes to also handling:

• Specialised Investment Funds (SIFs)
• Alternative Investment Funds (AIFs)
• Global advisory and distribution mandates

3. RBI Allows Banks to Cut Home Loan Spreads for Existing Borrowers

Source: BS

Context:

The Reserve Bank of India (RBI) has introduced a major relief for existing home loan borrowers, allowing banks to reassess and reduce the spread component of floating-rate home loans when a borrower’s credit profile improves. The move aims to bring parity between new and existing borrowers, ensuring fairer pricing of home loans.

What Has Changed

Earlier Regime:

• Floating-rate home loans were structured as:
  Interest Rate = Benchmark Rate (e.g., Repo Rate) + Bank’s Spread
• The spread reflected factors such as the borrower’s credit score, loan tenure, and the bank’s margin.
• Banks were not allowed to alter the non-credit-risk component of the spread for three years after sanction — even if the borrower’s creditworthiness improved.
• As a result, new borrowers often enjoyed lower rates, while existing borrowers remained stuck with higher EMIs.

New RBI Rule (Effective October 1, 2025):

• RBI has removed the three-year lock-in on spread revision.
• Banks can now reduce the spread earlier for existing borrowers on justifiable and non-discriminatory grounds.
• This means that if your credit score improves, or your risk profile becomes stronger, your bank can lower your loan rate without waiting for three years.

Why This Matters to Borrowers

• Fair Treatment for Existing Borrowers:
  The reform eliminates the long-standing bias that favored new borrowers with lower rates.
• Incentive for Better Credit Behaviour:
  Borrowers who improve their credit score or reduce debt exposure can now negotiate lower EMIs.
• Enhanced Competition Among Banks:
  Lenders may compete more aggressively to retain good borrowers by offering quicker rate reductions.
• Potential EMI Savings:
  Even a small rate cut (e.g., 25–50 basis points) can significantly lower EMIs over the life of a long-tenure home loan.

4. Banking Laws (Amendment) Act, 2025

Source: News on Air

Context:

The Finance Ministry has announced that key provisions related to nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from November 1, 2025. These measures are designed to enhance flexibility, transparency, and efficiency in claim settlements for depositors.

Key Highlights:

• Scope of Nomination Provisions:
  • Deposit Accounts: Depositors can make nominations for their bank deposits according to their preference.
  • Multiple Nominations: Allows more than one nominee, providing flexibility and uniformity.
  • Safe Custody Articles & Lockers: Nomination facilities extend to articles kept in safe custody and contents of safety lockers maintained with banks.
• Relevant Sections:
  • Provisions being implemented through Sections 10, 11, 12, and 13 of the amended Banking Laws.
• Expected Benefits:
  • Ensures efficient and transparent settlement of claims.
  • Reduces disputes among heirs or nominees.
  • Aligns nomination rules across various banking products and services.

5. RBI Proposes to Mandate Unique Transaction Identifier (UTI) for All OTC Derivative Transactions

Source: The Economic Times

Context:

The RBI has released a draft circular proposing that all over-the-counter (OTC) derivative transactions in India—specifically those related to rupee interest rate derivatives, foreign currency derivatives, forward contracts in government securities, foreign currency interest rate derivatives, and credit derivatives—should carry a Unique Transaction Identifier (UTI) from the next financial year (beginning 1 April).

Key Provisions

• The UTI will be a unique reference number assigned to every OTC derivative transaction, covering the transaction’s full lifecycle.
• Format: A maximum of 52 characters, comprising the LEI of the generating entity plus a unique identifier for that transaction.
• The RBI has invited comments from banks, market participants and other stakeholders by 14 November 2025.

Rationale

• UTIs are viewed globally as a key data element for reporting OTC derivatives, helping regulators and policymakers aggregate, analyse and monitor risks in the derivatives markets.
• With the introduction of UTI, the RBI expects to gain a comprehensive view of the OTC derivatives market in India, improving its ability to monitor systemic risk, ensure transparency and strengthen market integrity.

Unique Transaction Identifier (UTI) and Over-the-Counter (OTC)

Term	Meaning	Purpose	Example
UTI	A unique alphanumeric code assigned to each derivative transaction	To ensure consistent reporting and tracking	A code like “INRFX20251023001” assigned to an FX swap
OTC Derivative	A privately negotiated financial contract between two parties	To manage risk or speculate without using exchanges	Two banks agree on an interest rate swap

6. SEBI (Merchant Bankers) Regulations

Context:

The Securities and Exchange Board of India (SEBI) has barred First Overseas Capital Ltd (FOCL) from taking new mandates for two years and imposed a ₹20 lakh penalty for multiple violations of the SEBI (Merchant Bankers) Regulations. The action underscores SEBI’s growing focus on accountability, financial soundness, and disclosure integrity among merchant bankers.

Key Facts

Regulatory Action: SEBI has prohibited FOCL from taking up new issue-management mandates (including IPOs), corporate advisory assignments, or acting as a manager or lead underwriter for the next two years.

SEBI (Merchant Bankers) Regulations, 1992

Merchant bankers are bound by the SEBI (Merchant Bankers) Regulations, 1992, which require strict adherence to norms on net worth, underwriting exposure, disclosure compliance, and scope of business.

The Securities and Exchange Board of India (SEBI) introduced the Merchant Bankers Regulations, 1992 to regulate the operations of merchant bankers in India. These regulations ensure transparency, accountability, and professionalism in capital market intermediation, especially in issue management, underwriting, and corporate advisory services.

The framework was designed to protect investors, maintain market integrity, and establish standards for entities engaged in managing public issues, takeovers, and other capital market transactions.

Definition of a Merchant Banker

A Merchant Banker is any person engaged in the business of issue management, either by making arrangements for buying, selling, or subscribing to securities, or by acting as manager, consultant, or adviser to an issue.

This includes services such as:

• Managing public issues (IPO/FPO)
• Underwriting or sub-underwriting
• Corporate restructuring and advisory services
• Portfolio and project finance advisory

Key Provisions of the Regulations

Provision	Regulation Reference	Key Requirements / Highlights
1. Registration Requirement	Reg. 3–6	• Must obtain SEBI registration before business commencement. • Must have adequate infrastructure, qualified personnel, and financial soundness. • SEBI may reject/suspend registration for non-compliance or misconduct.
2. Capital Adequacy Norms	—	• Minimum net worth: ₹5 crore (latest amendment). • Net worth = Paid-up capital + Free reserves (excluding revaluation reserves). • Non-compliance can lead to suspension/cancellation.
3. Code of Conduct	Schedule III	• Maintain integrity, fairness, and diligence. • Avoid conflicts of interest. • Ensure full and fair disclosure to investors. • Maintain confidentiality and act in clients’ best interests.
4. Underwriting & Issue Management	Reg. 13–16	• Must sign formal agreement with issuer. • Conduct due diligence on disclosures. • Underwriting within financial capacity (linked to net worth). • Submit due diligence certificate to SEBI before issue opens.
5. Books of Accounts & Records	Reg. 29	• Maintain books, client agreements, reports, and correspondence for minimum 5 years. • Must be available for SEBI inspection.
6. Half-Yearly Reporting	Reg. 32	• Submit half-yearly activity and compliance reports to SEBI. • Delay or non-submission may attract penalties or suspension.
7. Prohibition on Non-Securities Business	Reg. 24(b)	• Cannot engage in unrelated businesses (e.g., real estate, property, or trade). • SEBI may permit related activities (like portfolio/advisory services) with prior approval.

7. RBI Payments System Report 2025

Source: BS

Context:

The Reserve Bank of India (RBI) released its Payments System Report 2025, offering a comprehensive overview of payment systems in India, cross-border flows, and emerging risks. The report highlights both opportunities arising from technological innovation and challenges due to geopolitical tensions, legacy infrastructure, and fragmented standards.

Key Risks to Cross-Border Payments

• Geopolitical Tensions: Centralised global financial infrastructure and reliance on major settlement currencies create vulnerabilities. Sanctions or restrictions can disrupt access to markets.
• Operational Barriers: Multiple intermediaries, fragmented data standards, compliance checks, and legacy platforms increase transaction costs and reduce efficiency, particularly for individuals and SMEs.
• RBI Measures: To mitigate risks, RBI promotes bilateral and multilateral linkages of India’s UPI with foreign Fast Payment Systems (FPS), QR code acceptance abroad, and participation in Project Nexus for instant cross-border retail payments.

Cross-Border Payment Initiatives

• UPI-FPS Integration: Operationalised linking of UPI (India) with PayNow (Singapore) in 2023.
• International Acceptance: UPI QR codes accepted in Bhutan, France, Mauritius, Nepal, Singapore, UAE, and Qatar.
• Project Nexus: Multilateral initiative with Malaysia, Philippines, Singapore, and Thailand for instant retail cross-border payments.
• Remittances: India remains the largest recipient globally, with $137.7 billion inflows in 2024, more than double Mexico ($67.6 billion). The Kuwait-India corridor is the most cost-efficient at 2.10%, below the UN SDG target of 3%.

Regulatory & Governance Framework

• Payments Regulatory Board (PRB): Replaced the BPSS; chaired by RBI Governor; oversees regulation and supervision of payment systems.
• Cross-Border Payment Policy: RBI encourages interoperability, UPI adoption abroad, and reduced remittance costs while monitoring risks from global sanctions and system dependencies.

Emerging Trends

• Technological Transformation: Increased adoption of digital payments, cross-border interoperability, and remittance platforms.
• Remittance Efficiency: India leads globally; corridor costs are declining.
• Card vs Digital Competition: Credit and debit cards face rising competition from UPI, wallets, and other digital payment platforms.
• Private Sector Dominance: Private banks are expanding digital and co-branded offerings, while foreign banks’ share in credit cards declines sharply.

Facts To Remember

1. OpenAI unveils AI powered search browser ‘Atlas’ in a challenge to Google

ChatGPT-maker OpenAIannounced an “Atlas” search browser, leveraging its artificial intelligence prowess in a direct challenge to Google Chrome.

2. Union Government Proposes Mandatory Labelling of Synthetic AI-Generated Content on Social Media

The Ministry of Electronics and Information Technology (MeitY) has released a draft amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, proposing mandatory disclosure and labelling of all AI-generated or synthetic content on social media platforms. The move follows growing public and parliamentary concern over deepfakes, impersonation, and misinformation spread through synthetic media.

3. Punjab Records Fourfold Drop in Farm Fires in 2025: PPCB Data

Punjab has recorded a significant decline in stubble-burning incidents this season, according to the Punjab Pollution Control Board (PPCB). Between September 15 and October 21, 2025, the State reported 415 cases of farm fires, compared to 1,510 during the same period last year and 1,764 in 2023.

4. RBI Shifts Focus from US Treasuries to Gold

India’s Reserve Bank of India (RBI) has increasingly added gold to its reserves while reducing investments in US Treasury Securities since the start of FY2025-26. This reflects a strategy to diversify forex reserves amid global economic uncertainties.