Daily Current Affairs (DCA) 26 March, 2025

Daily Current Affairs Quiz
26 March, 2025

International Affairs

1. India-China 33rd WMCC Meeting

Context of the Meeting

• The 33rd meeting of the Working Mechanism for Consultation and Coordination (WMCC) on India-China Border Affairs was held in Beijing.
• Discussions focused on the early resumption of cross-border cooperation and exchanges, including:
  • Trans-border rivers
  • Kailash-Mansarovar Yatra

Main Outcomes

1. Positive Diplomatic Atmosphere

• Discussions were held in a positive, constructive, and forward-looking manner.
• The meeting reviewed the situation along the Line of Actual Control (LAC).
• Both sides reiterated that peace and tranquillity at the border are crucial for the overall development of bilateral relations.

2. Preparations for Next SR Meeting

• Both countries agreed to make substantial preparations for the next Special Representatives (SR) meeting, to be hosted in India later in 2025.

3. Border Management Focus

• Measures were discussed to implement decisions from the 23rd SR meeting (held in December 2024 in Beijing).
• Emphasis was placed on advancing effective border management and maintaining diplomatic and military communication mechanisms.

Leadership and Participation

• Indian delegation: Led by Gourangalal Das, Joint Secretary (East Asia).
• Chinese delegation: Led by Hong Liang, Director General, Boundary and Oceanic Affairs.
• High-level courtesy call: Mr. Das met Assistant Foreign Minister Hong Lei.
• Representatives from foreign affairs, defence, interior, and immigration departments of both nations participated.

Current Border Status

1. Disengagement Achievements

• In November 2024, both nations completed disengagement at Demchok and Depsang in eastern Ladakh, returning to pre-April 2020 status quo.
• Patrolling has resumed in these two areas.

2. Pending Challenges

• Buffer zones remain in place at the earlier five friction points where disengagement was completed.
• No clear consensus yet on new patrolling norms or resumption protocols in these buffer areas.

Way Forward

The 33rd WMCC meeting highlighted a mutual commitment to dialogue, border stability, and progressive resolution of issues.

• While significant progress has been made with disengagement, buffer zones and new patrolling arrangements remain areas for future negotiation.
• The upcoming Special Representatives meeting in India will likely be a key moment for advancing agreements on border management and re-establishing trust.

2. India and Singapore Sign Letter of Intent for Green and Digital Shipping Corridor

Context:

India and Singapore have signed a Letter of Intent (LoI) to jointly develop a Green and Digital Shipping Corridor (GDSC) during the ongoing Singapore Maritime Week (SMW).

Key Areas of Cooperation

Maritime Digitalisation and Decarbonisation

• Joint efforts to advance maritime digital transformation.
• Focus on adopting green technologies to achieve sustainable shipping goals.

Collaborative Efforts

• Identifying key stakeholders in both countries to drive innovation and participation.
• Working on innovative projects in digital shipping and low-carbon maritime technologies.
• The cooperation will eventually be formalized through a Memorandum of Understanding (MoU).

Objectives of the India-Singapore GDSC

Strengthen Maritime Cooperation

• Enhance bilateral collaboration between India and Singapore’s maritime sectors.

Accelerate Green Technology Adoption

• Promote the use of zero or near-zero greenhouse gas (GHG) emission technologies in shipping.

Promote Digital Shipping Solutions

• Encourage the integration of advanced digital solutions for more efficient and eco-friendly shipping practices.

The India-Singapore Green and Digital Shipping Corridor marks a significant step toward sustainable maritime operations, with both nations committing to environmentally responsible shipping and digital innovation. This partnership will not only strengthen bilateral maritime ties but also accelerate global efforts towards achieving decarbonised and smart shipping solutions.

3. Russia and Ukraine Agree to Cease Black Sea

Context:

In a significant diplomatic development, Russia and Ukraine have agreed to suspend military strikes in the Black Sea and refrain from targeting energy infrastructure. The agreement was reached after three days of negotiations brokered by the United States in Riyadh, Saudi Arabia.

Key Agreements

• Safe Navigation in the Black Sea
  • Both nations committed to ensuring the safe passage of commercial vessels and to prohibit using these vessels for military purposes.
• Energy Infrastructure Protection
  • Both sides agreed to halt military action against energy sites, with the U.S. pledging efforts to enforce this commitment.

Conditions Set by Russia

• The Kremlin emphasized that the agreement on Black Sea security would only take effect once sanctions on Russia’s agricultural sector are lifted.
• Russia specifically demands the reconnection of the Russian Agricultural Bank and related financial institutions to the SWIFT international payment system.

U.S. Incentives

• The U.S. government announced that it will assist in restoring Russia’s access to global markets for agricultural and fertilizer exports, marking the first direct concession in return for Russia’s cooperation.

Reactions from Leaders

• Ukrainian President Volodymyr Zelenskyy welcomed the agreements but expressed cautious optimism: “No one can accuse Ukraine of not moving towards sustainable peace after this.”
• However, Zelenskyy also voiced concerns about potential repercussions: “We believe that this is a weakening of the position and a weakening of sanctions.”

While this agreement signals a potential turning point in the conflict, both sides have conditions that could complicate full implementation. The global community will closely watch the next steps, particularly around sanctions and compliance with the agreed terms.

TH

National Affairs

1. Collegium System

Context:

The Vice-President and Rajya Sabha Chairman, Jagdeep Dhankhar, chaired a meeting of Rajya Sabha floor leaders in the context of the recovery of half-burnt Indian currency notes at the official residence of the High Court judge Justice Yashwant Varma on March 14, building ground for another intervention by Parliament in judicial appointments.

What is the Collegium System?

The Collegium System is how judges are chosen and transferred in India’s higher courts (the Supreme Court and High Courts).
Interestingly, this system wasn’t created by the Constitution or by Parliament — it slowly took shape through decisions made by the Supreme Court itself.

How Did the Collegium System Come About?

First Judges Case (1981)

• The Supreme Court said the government could reject the Chief Justice of India’s recommendation if it had a strong reason.
• For the next 12 years, the government had the upper hand in deciding who became judges.

Second Judges Case (1993)

• The Supreme Court changed its mind.
• It said “consultation” with the Chief Justice of India actually meant the court’s top judges deciding together — not just one person’s opinion.
• This is where the idea of a group (the collegium) really started.

Third Judges Case (1998)

• The Supreme Court made the collegium bigger — now five people: the Chief Justice of India and the four next senior-most judges.

Who’s in the Collegium?

• For the Supreme Court, it’s the Chief Justice of India plus the four senior-most judges.
• For a High Court, it’s that court’s Chief Justice and two senior-most judges.

How are Judges Appointed in India?

For the Chief Justice of India

• The current Chief Justice recommends who should succeed them (usually based on seniority).
• The President of India then officially appoints that person.

For other Supreme Court judges

• The Chief Justice discusses names with the other four senior judges.
• After they all agree, the name goes to the Law Minister, then to the Prime Minister, and finally to the President for approval.

For High Court Chief Justices

• There’s a practice of appointing High Court Chief Justices from outside their home state.
• The recommendation starts from that High Court’s outgoing Chief Justice and senior judges, goes to the Chief Minister, then the Governor, and finally to the Union Law Minister.

Problems with the Collegium System

Too Secretive

• The process happens behind closed doors.
• There are no public records, and nobody knows why certain names are picked or rejected.

Risk of Nepotism and Favoritism

• With no set rules, judges might choose people they personally like or are close to, rather than the most deserving candidates.

No Checks and Balances

• In India, power is supposed to be balanced between Parliament, the government, and the judiciary.
• The collegium gives a lot of unchecked power to judges, which can lead to problems.

Lack of Diversity

• Women and people from diverse backgrounds are still underrepresented in the higher judiciary.

What was done to fix it?

• The government tried to change the system by introducing the National Judicial Appointments Commission (NJAC) in 2014.
• This law aimed to make the selection process more transparent and balanced by involving other stakeholders, not just judges.
• But the Supreme Court struck down the NJAC in 2015, saying it would hurt the independence of the judiciary.

The collegium system is how judges are chosen in India, but it’s criticized for being secretive and lacking accountability. While efforts to reform it have been made, such as the NJAC, they haven’t succeeded — leaving this system at the center of ongoing debates about fairness, transparency, and balance of power.

TH

2. SAHYOG Portal

What is the SAHYOG Portal?

• The SAHYOG portal is a government platform designed to help tackle cybercrime more effectively.
• It aims to bring central and state government agencies and online platforms (intermediaries) onto one platform to make the process of sending and acting on blocking orders smoother and more organized.

Mission of SAHYOG Portal

• To build a strong system for the prevention, detection, investigation, and prosecution of cybercrime in India.

Who runs it?

• The portal has been developed by the Ministry of Home Affairs (MHA).

How does the SAHYOG Portal work?

• It automates the process of sending legal notices to online platforms (like social media apps and websites).
• These notices are issued by the Appropriate Government or its agencies under the IT Act, 2000.
• Once a notice is sent, platforms are expected to remove or block access to content that’s considered illegal or harmful.

What does it block?

• The portal helps block any information, data, or communication links that are being used to:
  • Spread misinformation
  • Break laws
  • Endanger public safety
  • Commit other unlawful activities

Why is it important?

• The SAHYOG portal aims to streamline the coordination between the government and online platforms.
• It makes sure that cybercrime-related content can be dealt with quickly and efficiently, without delays caused by manual communication.

Current Use

• Both Central and State governments are already issuing blocking orders through the SAHYOG portal.
• However, platforms like X (formerly Twitter) are resisting being part of this portal, arguing that it could bypass existing legal safeguards and turn into a censorship tool.

The SAHYOG portal is India’s centralized platform for blocking unlawful online content, designed to bring government agencies and online platforms together to fight cybercrime — but its use is raising debates about transparency, legal boundaries, and freedom of expression.

3. JSW Steel Becomes World’s Most Valuable Steelmaker

Context:

JSW Steel, led by Sajjan Jindal, has emerged as the world’s most valuable steel company with a market capitalisation (mcap) of $30.31 billion, according to Bloomberg data. The company has surpassed major global steel producers like ArcelorMittal and Nucor Corporation.

Top Global Steelmakers by Market Capitalisation

Rank	Company	Country	Mcap ($ bn)	TTM Revenue ($ bn)	Profit ($ bn)
1	JSW Steel	India	30.31	21.1	1.1
2	Nucor Corporation	United States	29.40	30.7	2.0
3	ArcelorMittal	Luxembourg	27.14	62.4	1.3
4	Nippon Steel	Japan	24.43	58.0	3.1
5	Tata Steel	India	23.09	27.5	-0.5
6	Tenaris	Luxembourg	22.98	12.5	2.0
7	Baoshan Iron & Steel	China	22.72	46.1	1.3
8	Steel Dynamics	United States	18.99	17.5	1.5
9	Posco Holdings	South Korea	17.35	53.3	0.8
10	Inner Mongolia BaoTou Steel	China	11.54	9.3	-0.1

Source: Bloomberg, compiled by BS Research Bureau

Key Comparisons

• JSW Steel leads in market valuation but ArcelorMittal remains ahead in terms of revenue ($62.4 billion) compared to JSW’s $21.1 billion.
• JSW Steel trades at a price-to-earnings (P/E) ratio of 28.5x, significantly higher than ArcelorMittal’s 20.3x, indicating strong investor confidence and growth potential.

Indian Steelmakers Rising

• Tata Steel, established in 1907 and part of Tata Sons, ranks fifth globally with a market cap of $23.09 billion.
• Experts point out that the shift in global steel rankings reflects the growing prominence of Indian producers in the global steel industry.

Contextual Industry Trend

• The Indian steel industry has been actively fending off cheap imports and bolstering domestic capacity expansion.
• Protective measures, including safeguards, are being analyzed to see if they will fuel further capacity investments and market dominance by Indian steel majors.

The rise of JSW Steel as the world’s most valuable steelmaker signifies India’s growing influence in global manufacturing and highlights the shift in global steel market dynamics. The combination of strong valuations, aggressive expansion, and policy support is positioning Indian steel companies as key players in shaping the future of the global steel industry.

4. Astronomers Unveil New Theory on the Origins of Water in the Universe

Context:

Astronomers may be closer to solving one of science’s oldest mysteries: how did water originate in the universe? A groundbreaking study published in Nature Astronomy on March 3 suggests that the universe’s earliest stars produced water through colossal supernova explosions, challenging existing theories and potentially reshaping our understanding of life’s earliest possibilities.

The Birth of the First Stars

• Water’s cosmic presence: Water is the third most abundant molecule in the universe after hydrogen and carbon monoxide, yet its origins have remained uncertain.
• The Big Bang aftermath: About 13.8 billion years ago, the Big Bang formed all matter, and the first stars emerged a few hundred million years later, composed solely of hydrogen and helium.
• Star evolution: These massive stars eventually exhausted their hydrogen fuel and exploded as supernovae, setting the stage for new star formations.

Star Populations Explained

• Population I stars: Youngest, metal-rich stars like our Sun.
• Population II stars: Older, with lower metallicity.
• Population III stars: The universe’s first generation of stars, massive and composed entirely of hydrogen and helium. According to the new study, these stars could have been the first creators of cosmic water.

3D Simulations and Key Discoveries

• Research approach: Led by astronomer D.H. Whalen from the University of Portsmouth, the team used advanced 3D simulations to study Population III supernovae.
• Findings: Conditions for water formation existed between 50 million and 1 billion years after the Big Bang. Supernovae from these gigantic stars expelled oxygen, which combined with hydrogen to form water — a vital ingredient for life.

The Infant Universe and Abundant Water

• Accelerated water formation: The research suggests that early supernovae produced more water than previously believed, implying that planets with water could have formed much earlier in cosmic history.
• Potential for early life: This discovery shifts the timeline for the possibility of life in the universe to billions of years earlier than assumed.

Addressing Limitations

• Observational challenges: Population III stars are too distant to be observed directly, relying on simulation models.
• Confidence in the model: Whalen stated that their models accurately reflect ionising UV radiation and gas dynamics based on well-established stellar evolution theories.

This study revolutionizes our understanding of water’s origins, suggesting that life-supporting conditions may have existed far earlier than previously imagined. If proven, it could drastically reshape theories on planetary formation and the timeline for life’s emergence in the cosmos.

Source: TH

5. How Global Warming Is Impacting Mountain Regions Across the World

Context:

The UNESCO report titled “Mountains and Glaciers: Water Towers”, released on the first World Day for Glaciers (March 21, 2025), highlights the rapid and largely irreversible impacts of global warming on mountain ecosystems.

Major Environmental Changes in Mountain Regions

Glacier Melting Accelerates

• The last three years recorded the largest glacial mass loss on record.
• Since 1975, glaciers (excluding Greenland and Antarctica) have lost over 9,000 billion tonnes of ice — equivalent to an ice block the size of Germany.
• Black carbon and other particulate matter deposits are accelerating melt rates by darkening ice surfaces and increasing solar absorption.

Permafrost Thaw Intensifies

• Permafrost (permanently frozen ground) is thawing rapidly in high-altitude regions.
• Melting permafrost releases organic carbon into the atmosphere, further fueling climate change.
• Thawing destabilizes rock slopes and debris-covered areas, increasing risks of landslides and other geological hazards.

Declining Snow Cover

• A study published in Nature (2024) shows a 7.79% global decline in persistent snow cover between 1979 and 2022.
• Snow cover loss is most prominent in spring and summer, impacting water availability.

Erratic Snowfall Patterns

• The snow-rain transition elevation is rising, causing lower elevations to receive more rain than snow.
• Snow melts earlier, disrupting traditional water flow cycles.

Increased Risk of Glacial Lake Outburst Floods (GLOFs)

• Melting glaciers and unstable permafrost heighten the risk of sudden, catastrophic floods from glacial lakes.

Why This Matters

Water Security Threatened

• Over 2 billion people downstream rely on mountain glaciers for freshwater.
• Water flows will become unpredictable, with shifts in timing, volume, and sediment load.

Rising Sea Levels

• Melted glacial ice accounts for 25–30% of observed global sea-level rise.
• Between 2006 and 2016, glaciers lost 335 billion tonnes of ice annually, contributing nearly 1 mm per year to sea-level rise.
• Every millimeter of sea-level rise can expose 300,000 people to annual flooding.

Policy Urgency

• Experts emphasize the need for immediate policy action, awareness programs, and resource mobilization to mitigate these impacts.

Global warming is drastically reshaping mountain regions, causing faster glacier melting, permafrost thaw, snow cover reduction, and erratic snowfall patterns. These changes endanger global water security, accelerate sea-level rise, and increase climate-related hazards. Immediate action and strong international policy frameworks are crucial to protect these fragile ecosystems and the billions who depend on them.

The Indian Express

Banking/Finance

1. SEBI Raises FPI Disclosure Threshold to ₹50,000 Crore

Context:

• The Securities and Exchange Board of India (SEBI) has raised the threshold for granular disclosure requirements by Foreign Portfolio Investors (FPIs) to ₹50,000 crore, from the earlier ₹25,000 crore.
• This move follows the doubling of the cash equity market size in India over the past few years.

Key Decision

• FPIs with investment exceeding ₹50,000 crore in Indian equities will now need to disclose:
  • Beneficial ownership details
  • Returns and other specifics of the investing entities

Rationale Behind the Move

• SEBI aims to facilitate investment without creating fear among genuine investors.
• The new threshold helps avoid excessive compliance burdens for medium and small-sized FPIs.
• This move balances regulatory oversight while maintaining market attractiveness, according to SEBI Chairperson Tuhin Kanta Pandey.

Previous Norms

• The August 2023 circular mandated detailed disclosures for FPIs investing over ₹25,000 crore and those with over half of their portfolio in a single entity.
• That regulation was largely influenced by concerns over stock price manipulation and public shareholding norms violations, highlighted in the Hindenburg report on the Adani Group.

Expected Impact

• Reduction in FPI sell-offs by lowering compliance friction.
• Potential increase in large-scale foreign investment in Indian equities.
• Stronger balance between market integrity and investor confidence.

SEBI’s revision of disclosure norms is seen as a pro-growth and investor-friendly move. The decision is expected to strengthen capital inflows, foster market stability, and make India more competitive among global emerging markets.

Mint

2. Paytm Instructs Merchants to Cut Ties with Third-Party Payment Orchestrators Like Juspay

Overview

• Fintech giant Paytm has directed its merchants to stop using third-party payment orchestration platforms such as Juspay, effective from April 1.
• Following this notification, all transactions must be routed through Paytm Payments Services (PPSL), its business-to-business payments division.
• This move aligns with similar decisions made recently by other fintech players like PhonePe, Cashfree Payments, and Razorpay.

Industry Context

• Merchants currently use Juspay’s orchestration layer to route transactions via multiple payment aggregators (PAs), optimizing for downtime, transaction success rates, and processing costs.
• Paytm and Juspay do not have a direct relationship; instead, merchants independently opt for Juspay’s services.
• Paytm’s shift indicates a broader trend in the fintech sector toward creating closed ecosystems that minimize third-party dependencies.

Key Changes for Merchants

• From April 1, 2025, all merchant transactions will be routed exclusively through PPSL.
• According to fintech insiders, Paytm is also expected to impose an additional 1% fee on merchants after they migrate away from orchestration platforms like Juspay.
• Direct integrations, as believed by payment aggregators, allow faster rollouts of new services and provide better control over the end-user experience.

Juspay’s Response: Open-Sourcing

• In response to the industry shifts, Juspay has open-sourced its orchestration layer, allowing merchants to:
  • Self-host orchestration solutions.
  • Integrate with preferred payment gateways.
  • Define transaction rules and ensure transparency and flexibility.
• This strategic move enables enterprises to manage orchestration in-house, reducing dependency on external routing platforms.

Trillionloans Receives ‘IND BBB+’ Credit Rating with Stable Outlook

About Trillionloans

• Trillionloans Fintech, the non-banking financial arm of BharatPe, has been awarded an ‘IND BBB+’ credit rating by India Ratings & Research.
• The rating includes a stable outlook, reflecting confidence in the company’s financial health and credit quality.

Key Developments

• BharatPe has increased its stake in Trillionloans to 62.2%, after acquiring a 51% controlling stake in 2023.
• The company aims to leverage BharatPe’s 18 million-strong merchant network for customized digital lending solutions.
• Trillionloans will use an AI-driven risk assessment framework for quick turnaround loans with robust credit quality and risk mitigation.

Implications of the Credit Rating

• The credit upgrade improves Trillionloans’ ability to:
  • Raise external debt.
  • Diversify funding sources.
  • Strengthen its digital lending footprint, especially in the small business segment.

Paytm’s decision to route all transactions through PPSL reflects a growing industry push towards platform consolidation and closed ecosystems. Meanwhile, Juspay’s open-source strategy could reshape how merchants manage transaction orchestration in the long run. On the lending side, Trillionloans’ credit rating boost marks significant progress for BharatPe’s digital lending ambitions, strengthening its presence in merchant-focused financial services.

Source: BS

3. BHIM 3.0

Context:

The Bharat Interface for Money (BHIM) app will continue to function as a sandbox for digital payment innovations in India, enabling industry-wide adoption of new features as UPI use cases continue to grow.

Key Announcements

• NPCI BHIM Services (NBSL), a wholly owned subsidiary of the National Payments Corporation of India (NPCI), rolled out BHIM version 3.0.
• BHIM will nurture products and drive industry-wide adoption of digital payment features through collaborative innovation.

New Features in BHIM 3.0

• Family Mode for managing payments across multiple users.
• Enhanced ability to work in low-internet areas.
• A cleaner, more intuitive user interface (UI).
• Cashbacks and incentives for customers processing UPI transactions on BHIM.
• The rollout will happen in phases, with full implementation expected by April 2025.

BHIM’s Strategic Innovations

• BHIM Vega:
  • NPCI’s new in-app payment solution for online merchants.
  • Allows users to complete real-time transactions without switching to third-party apps.
• BHIM Vishwas (Proof of Concept):
  • Designed to white-label BHIM’s technology stack and integrate it into banks’ mobile banking apps.
  • Current partner banks: Bank of Baroda, Canara Bank, Karnataka Bank, and Union Bank of India.

Current Market Metrics

• 226 million Android installs and 8.8 million iOS installs, per NPCI data.
• UPI user base currently stands between 300–400 million, leaving significant untapped market potential.

Key Takeaways

• BHIM will play a central role as India’s digital payment testing ground, ensuring smoother adoption of future UPI enhancements.
• The launch of BHIM 3.0 and in-app solutions like BHIM Vega reflect NPCI’s focus on user engagement, merchant integration, and frictionless transactions.
• The untapped market of 900+ million potential users highlights enormous scope for further UPI and BHIM adoption.

BS

4. RBI’s Revised Priority Sector Lending Norms to Boost Credit Flow

Context:

The Reserve Bank of India (RBI) has announced revised Priority Sector Lending (PSL) norms, effective April 1, 2025, aimed at increasing credit flow to sectors such as housing, clean energy, and weaker sections. These regulations are expected to benefit banks with lower organic PSL generation, notably HDFC Bank, RBL Bank, Federal Bank, and IndusInd Bank.

Key Changes in PSL Norms

• Increased loan limits for housing and renewable energy projects.
• Expanded purposes for classifying loans under renewable energy.
• Inclusion of transgender individuals under the “weaker sections” category.
• Removal of caps on loans by urban cooperative banks (UCBs) to individual women beneficiaries.

Impact on Banks with Lower PSL Generation

According to IIFL Capital:

• These revisions help banks reduce their reliance on:
  • Priority Sector Lending Certificate (PSLC) purchases.
  • Investments in the Rural Infrastructure Development Fund (RIDF), which typically yield lower returns.
• In FY24, organic PSL shortfalls were observed in:
  • RBL Bank — 26% of ANBC (vs. required 40%)
  • IndusInd Bank — 32%
  • Federal Bank — 32%

RIDF Investments (as % of opening ANBC):

• RBL Bank — 11.3%
• Federal Bank — 6.2%
• SBI — 9.9%

Net PSLC Purchases (as % of domestic advances):

• RBL Bank — 6.4%
• IndusInd Bank — 0.9%
• SBI — 5.7%
• ICICI Bank — 1.9%

RBI’s Broader Regulatory Approach

Under Governor Sanjay Malhotra, the RBI has also:

• Deferred implementation of new liquidity coverage ratio norms by at least a year.
• Announced no set timeframe for rolling out the expected credit loss-based framework.
• Extended timelines for adopting project finance norms by at least a year.

The revised PSL norms will increase credit access for housing, renewable energy, and weaker sections, promoting financial inclusion. Banks with historical PSL shortfalls will benefit from the revised guidelines, reducing the cost of compliance. The RBI continues to balance financial discipline with regulatory relaxation, providing banks space to focus on core lending growth.

BS

5. Finance Ministry Discontinues Medium- and Long-Term Deposits under Gold Monetisation Scheme (GMS)

Context:

The Union Finance Ministry has announced the discontinuation of the medium- and long-term government deposit (MLTGD) components of the Gold Monetisation Scheme (GMS), effective March 26, 2025. This decision follows a comprehensive review of the scheme’s performance and changing market dynamics.

Medium Term Government Deposit (5-7 years), and. Long-Term Government Deposit (12 – 15 years)

The Gold Monetisation Scheme

The Gold Monetisation Scheme was announced on September 15, 2015, with the objective to reduce country’s reliance on the import of gold in the long run and mobilise gold held by households. Advertisement. Till November 2024, approximately 31,164 kilograms of gold have been mobilised under GMS.

Background of the GMS

• Launched: September 15, 2015
• Objective:
  • Reduce dependency on gold imports
  • Mobilize household and institutional gold for productive economic use
• Original Components:
  • Short-Term Bank Deposits (STBD): 1–3 years
  • Medium-Term Government Deposits (MTGD): 5–7 years
  • Long-Term Government Deposits (LTGD): 12–15 years

Key Policy Change

• Discontinued Components:
  • Medium-term and long-term deposits will no longer be accepted at:
    • Designated Collection and Purity Testing Centres (CPTCs)
    • Gold Monetisation Scheme Collection & Testing Agents (GMCTAs)
    • Bank branches
• Effective Date: March 26, 2025
• Existing Deposits:
  • Existing MLTGD deposits will continue until maturity, in line with RBI’s master directions.

What Continues?

• Short-Term Bank Deposits (STBD):
  • Will remain available based on individual bank’s commercial viability.
  • The Reserve Bank of India (RBI) is expected to release detailed guidelines soon.

Reason for Discontinuation

• Evolving market conditions and scheme performance review.
• Focus on refining the scheme to suit the dynamic financial landscape and enhance gold mobilisation effectiveness.

Implications for Stakeholders

Stakeholder	Impact
Households/Institutions	Limited to short-term deposits, reducing long-horizon monetisation opportunities.
Banks	Continued participation through STBDs, subject to profitability.
RBI	Will issue revised guidelines on short-term deposit handling.

The government is shifting its focus to shorter-term gold deposits, possibly due to higher efficiency and bank interest in that segment. The move aligns with market feedback and aims to enhance commercial viability. Continued gold mobilisation will depend on bank adoption and RBI’s revised guidance.

Source: BS

6. NPCI, RBI Approve Increase in ATM Interchange Fees

Context:

The National Payments Corporation of India (NPCI), with approval from the Reserve Bank of India (RBI), has announced an increase in ATM interchange fees for cash withdrawals from ₹17 to ₹19, effective May 1, 2025.

Details of Fee Revision

Transaction Type	Previous Interchange Fee	Revised Interchange Fee
Cash Withdrawal (Domestic)	₹17	₹19
Non-Financial Transactions (Domestic)	₹6	₹7
Balance Enquiries (Nepal & Bhutan)	₹6	₹7 (excluding GST)

Note: All revised rates are exclusive of GST.

NPCI Circular Highlights

• Circular Date: March 13, 2025
• RBI Approval: Confirmed via RBI letter dated March 11, 2025.
• Implementation Date: May 1, 2025.
• The revised interchange is not applicable for:
  • Micro-ATM transactions
  • Interoperable cash deposits (both card-based and UPI-based)
  • International ATM transactions

Key Points from RBI and NPCI

• RBI allowed ATM networks to independently decide interchange fees.
• NPCI will communicate the implementation date to RBI.
• The changes are intended to support the sustainability of ATM operations and compensate for rising costs.

Impact on Stakeholders

Stakeholder	Impact
Banks & ATM Operators	Increased revenue on each cash withdrawal and non-financial transaction.
Consumers	No direct increase in fees unless banks pass on the rise; encourages digital transactions.
ATM Network (NFS)	Continued alignment with market-driven pricing and operational costs.

Exemptions to Note

The revised interchange fees will not apply to:

• Micro-ATM transactions
• Interoperable cash deposits (via cards or UPI)
• International transactions at ATMs

The interchange fee revision reflects RBI and NPCI’s efforts to ensure ATM operations remain viable and sustainable, balancing the cost burden between banks and ATM operators while maintaining customer access.

7. India’s Regulatory Framework

1. The Original Framework of Economic Reforms (1990s)

Key Assumptions

• Government as policymaker, not business operator.
• Independent regulators to enforce policies through autonomous rulemaking.
• Creation of sectoral regulators:
  • TRAI for telecom
  • Insurance Regulatory and Development Authority (IRDA)
  • Airports Economic Regulatory Authority (AERA)
  • Central Electricity Regulatory Commission (CERC)
  • Competition Commission of India (CCI)

Regulatory Leadership: Early Approach

Diverse Talent Pool

• Experts from academia, private sector, judiciary, and select civil servants.
• Examples:
  • First CERC Chairperson: An economist.
  • TRAI: Headed by a retired judge and later a banker.
  • SEBI (capital market regulator): Initially headed by a banker.
  • CCI: Headed by a retired IAS officer.

Principle of Conflict-Free Appointments

• Regulators were barred from taking government jobs post-tenure to ensure neutrality and independence.
• The aim was to prevent bias or future career influence while serving as a regulator.

Erosion of Guardrails

Gradual Change

• Over time, the principle of regulatory independence has weakened.
• Several former financial regulators have accepted government assignments post-tenure, diluting the original reform spirit.

Legislative Tweaks

• Recent governments have amended laws to allow regulators to take up government roles after their tenure, raising questions about institutional independence.

Growing Dominance of Civil Servants in Regulatory Roles

Recent Trends

• Increasing preference for retired IAS officers to head regulatory bodies.
• In the past few months, all top financial sector regulators in India have been former civil servants.

Risks and Concerns

• Blurring of lines between policy formulation (government’s role) and regulation (independent enforcement).
• Possibility of regulatory capture, with regulators aligning more with government priorities than consumer or market interests.
• Reduction in talent diversity, undermining the principle of independent, expertise-driven regulation.

The Need for Course Correction

Recommendations and Insights

• Revisit the legislative guardrails to prevent post-regulatory appointments in the government.
• Encourage wider talent sourcing from academia, private sector experts, and the judiciary.
• Reinforce the idea that regulators must function independent of political influence, focusing solely on consumer protection and industry integrity.
• Maintain the critical separation between government policy and regulatory enforcement to protect the credibility and effectiveness of India’s regulatory institutions.

India’s regulatory landscape, once built on principles of independence, autonomy, and conflict-free governance, is facing significant dilution. Over-reliance on retired civil servants and relaxing safeguards threatens to blur lines between policymaking and regulation. Restoring a diversified talent pool, coupled with strong post-tenure restrictions, is essential to safeguard the integrity of reforms and ensure long-term market confidence and institutional trust.

BS

8. RBI’s Proposed Ban on Prepayment Charges

RBI’s Proposal and Intent

• The Reserve Bank of India (RBI) has proposed banning foreclosure or prepayment charges on loans to small firms (up to ₹7.5 crore).
• The move is aimed at curbing “divergent practices” that lead to customer grievances and restrict borrowers from switching lenders for better rates.
• The RBI also plans to enhance transparency by mandating:
  • A board-approved policy on prepayment charges.
  • Prohibition of clauses restricting lender switching.
  • Prepayment charge calculations on outstanding amounts only.
  • Disclosure of these charges in the key fact sheet.

Why Transparency Is Welcome

• Transparency empowers borrowers and allows informed decision-making.
• Recent research (by Nitin Vishen and Prasanna Tantri) shows that greater transparency lowers borrowing costs and boosts lending to small firms.
• Disclosure of costs helps reduce exploitation and improves credit market efficiency.

The Complexities of Banning Prepayment Charges

• Relationship banking theory suggests that small borrowers often gain access to credit by committing to a lender for a minimum duration.
• Banks incur upfront fixed costs (due diligence, credit assessment), which are recovered over multiple years.
• Without prepayment charges, borrowers may switch lenders before banks recover these costs, leading to losses.
• “Free-riding” issue: New banks might lure customers with lower rates without having invested in the initial screening.

Potential Adverse Effects

• If banks cannot recover upfront costs, they may reduce lending to small or risky borrowers.
• Ironically, this could hurt credit access for small firms, the very sector the RBI aims to protect.
• Banks may also respond by charging higher interest rates upfront, potentially increasing defaults or risky borrower behavior.

A Middle-Ground Solution

• Instead of a blanket ban, regulators could:
  • Allow prepayment charges only to the extent of unrecovered upfront costs.
  • Set broad estimates for these costs based on financial statements and discussions with lenders.
• This would balance borrower freedom with lender sustainability.

The Long-Term Solution

• The ultimate fix lies in making information on small/new firms more accessible.
• With transparent data availability, lenders won’t need to impose prepayment charges, as switching will not cause unrecovered cost losses.

While the RBI’s efforts to enhance transparency and borrower choice are commendable, a complete ban on prepayment charges may reduce credit availability for small businesses. A nuanced approach, balancing fair costs and free market movement, is essential to foster healthy credit growth for small enterprises.

Source: BS

9. SEBI’s Shift Under Tuhin Kanta Pandey

Context:

Under the leadership of Tuhin Kanta Pandey, the Securities and Exchange Board of India (SEBI) is adopting a more deregulated, governance-focused approach, moving away from rapid regulatory tightening.

• Emphasis on evaluating the “costs” of regulatory changes
• Focus on nuanced, clear, and business-friendly regulations without compromising risk management

Key Changes Announced at SEBI’s Latest Board Meeting

• Deferred oversight on the appointment of Key Managerial Personnel (KMPs) in Market Infrastructure Institutions (MIIs)
• Postponed stricter norms for investment bankers and custodians due to concerns over complexity and cost
• Relaxed advance fee collection rules for research analysts and investment advisers from the earlier 3-6 month limit to one year
• Eased norms for Category II Alternative Investment Funds (AIFs) by broadening their investible scope in the debt segment
• Scrapped the rule mandating merchant bankers to transfer non-listed business to subsidiaries
• Removed the requirement for SEBI approvals for KMP appointments at MIIs

Earlier Steps Ahead of Board Meeting

• SEBI had already eased “skin in the game” rules for mutual fund employees, adopting a flexible approach to attract talent

SEBI’s New Playbook: Key Themes

• Mindful consideration of regulatory costs
• Alternative risk-mitigation strategies
• Preference for effective and optimal regulations over overly rigid frameworks
• Deferment of complex proposals to allow refinement and industry engagement
• Relaxation of previously imposed stringent advance fee norms
• Governance over micromanagement — reducing regulatory burden where unnecessary

10. RBI Infuses ₹44K Cr More into System via Year’s 5th OMO

Key Highlights

• The Reserve Bank of India (RBI) conducted its fifth open market operation (OMO) purchase in 2025.
• RBI accepted ₹44,541 crore of bids, against the notified amount of ₹50,000 crore.
• Bids worth ₹67,540 crore were received in this round of auctions.

Liquidity Deficit

• The banking system has been in liquidity deficit since mid-December 2024.
• The daily average liquidity shortfall in March stood at ₹1.62 lakh crore.
• The RBI’s liquidity-enhancement measures include:
  • ₹2 lakh crore injected via OMO auctions (till March 2025, excluding this latest auction).
  • $15 billion infused through foreign exchange swaps.
• Economists anticipate liquidity easing post-April 2025, supported by higher government spending at the start of the new fiscal year.

Lower Acceptance in the Latest OMO

• This is the only OMO in the current drive where RBI accepted bids lower than the notified amount.
• According to Rajeev Pawar, Head of Treasury at Ujjivan Small Finance Bank: “I think the pricing by banks may have been higher than the RBI’s comfort due to which some amount wasn’t accepted.”

Demand and Auction Details

• The OMO auction included 6 securities maturing between 2029 and 2037.
• The 7.26% GS 2033 security saw the highest demand.
• Pawar added: “The appetite to sell from the held-to-maturity book of banks seems satisfactory.”

Outlook for FY26

• Market experts expect more OMO purchases in the next fiscal year.
• Liquidity easing will depend on:
  • RBI’s future measures.
  • Acceleration in government spending as the fiscal year progresses.

The RBI continues to manage liquidity challenges through calibrated interventions. The latest OMO reflects cautious acceptance levels, aligning with the central bank’s pricing comfort. Market participants anticipate sustained OMOs and stronger liquidity conditions in the upcoming fiscal year.

Source: The Economic Times

11. Fintech Founders Unite to Form Regulatory Body, Seek RBI Nod

Context:

Founders of top fintech startups Jupiter, Fi, Lendingkart, OneCard, and Signzy — have come together to form a new industry body. The objective is to secure a self-regulatory organisation (SRO) licence from the Reserve Bank of India (RBI).

• The new body is an offshoot of the Fintech Convergence Council (FCC) under IAMAI (Internet and Mobile Association of India).

Leadership and Structure

• Sai Sudha Chandrasekaran appointed as CEO of the new organisation.
• Chandrasekaran previously served as Senior Vice President at Invest India, under the Ministry of Commerce.

RBI’s Role and Criteria

• The RBI has encouraged formation of a broad-based SRO representing diverse fintech voices.
• Last year, the RBI recognised FACE (Fintech Association of Consumer Empowerment) as the first fintech SRO.
• FCC and Digital Lenders’ Association of India were other key contenders for SRO recognition.

Regulatory

• The formation of this new body comes at a time of increased regulatory scrutiny by the RBI on fintech operations.
• The RBI has been pushing fintech companies to create an inclusive SRO to ensure industry-level governance and consumer protection.

The collaborative move by leading fintech founders marks a significant step toward industry-led governance. With regulatory oversight tightening, the new SRO aims to align fintech innovation with compliance, representing a unified voice to regulators and stakeholders.

Source: Economic Times

Economy

1. S&P Global Cuts India’s FY26 GDP Growth Forecast to 6.5%

Context:

S&P Global has revised its India GDP growth forecast for FY2025-26 downward by 20 basis points, from 6.7% to 6.5%. Despite the downgrade, India’s services-led exports to the U.S. are expected to remain strong and resilient, even in the face of potential reciprocal tariffs.

Key Highlights of S&P’s APAC Economic Update

• The revised forecast matches India’s GDP growth outcome for the previous financial year.
• Assumptions for the projection:
  • A normal monsoon season
  • Soft commodity prices, particularly crude oil
• Factors supporting India’s growth:
  • Cooling food inflation
  • Tax benefits announced in the FY26 Union Budget
  • Lower borrowing costs enhancing discretionary spending
• RBI rate cuts: The Reserve Bank of India is projected to cut interest rates by 75–100 basis points in the current cycle, as inflation moderates closer to the 4% target.

Impact of U.S. Reciprocal Tariffs on India

• Tariffs are generally applied on goods, not services, and India’s exports are heavily services-driven, making them more resilient to these trade frictions.
• S&P pointed out that India and the Philippines will experience less direct impact from U.S. tariff actions due to their services export dominance.
• However, indirect effects of slower global growth and trade uncertainty may still weigh on exports across APAC, including India.

China’s Economic Pressure and Regional Spillover

• S&P incorporated additional 10% U.S. tariffs on Chinese exports, raising the effective tariff rate to 35%.
• This will impact China’s growth through reduced exports, investments, and spillover effects.
• The negative GDP impact will also be felt most by:
  • Malaysia (semiconductors)
  • Singapore (pharmaceuticals)
  • South Korea (automobiles)

Growth Forecast Comparison Table

Agency	Previous Forecast (FY26)	Latest Forecast (FY26)
S&P Global	6.7%	6.5%
IMF	—	6.5%
World Bank	—	6.6%
Nomura Asia	—	6.4%
ADB	—	6.7%
Fitch	—	6.5%
OECD	—	6.2%

Key Takeaways

• India’s growth outlook remains stable but slightly moderated, reflecting cautious optimism amid global trade challenges.
• The services export strength is expected to cushion the impact of U.S. tariffs.
• RBI’s potential rate cuts and fiscal measures are seen as supportive drivers of domestic demand.
• The region, particularly India, must navigate external headwinds from China’s slowdown and tariff-driven global trade disruptions.’

Source: TET

Agriculture

1. Digital Crop Survey (DCS) and Agri Stack

Key Highlights

• Digital Crop Survey (DCS) system has been established to capture crop-sown details directly from fields via a mobile interface.
• DCS enables accurate, real-time crop area data for every agricultural plot, aiding in precise production estimation.

Agri Stack

• Agri Stack, developed by the Ministry of Agriculture and Farmers Welfare, complies with:
  • The Digital Personal Data Protection Act, 2023
  • Other relevant IT laws in India
• Key Features:
  • Farmer data privacy ensured by collecting data only with farmer consent.
  • Full control for farmers on how and with whom their data is shared.
  • Federated data management system, giving states control over their respective data.
  • High-end cybersecurity measures, including:
    • Secret code encryption of farmers’ information
    • Secure APIs with token-based authentication for controlled data exchange
    • Regular security audits and risk monitoring in compliance with MeitY and CERT-In guidelines.

Digital Inclusion for All Farmers

• Recognizing that not all farmers have mobile phones, the government enables access through:
  • Farmer Producer Organizations (FPOs)
  • Krishi Sakhis
  • Common Service Centres (CSCs)
• States are conducting awareness camps to ensure no farmer is left behind in registering and benefiting from Agri Stack.
• The government offers administrative and technical support for seamless implementation across states.

State Farmer Registry

• The State Farmer Registry under the Digital Agriculture Mission includes:
  • All landholding farmers, including women farmers.
  • Tenant and lessee farmers, onboarded as per state-specific policies.
• States retain autonomy to define eligibility for tenant and lessee farmers in their registries.

The implementation of the Digital Crop Survey (DCS) and Agri Stack marks a transformative leap in digital agriculture, ensuring accurate crop data, enhanced farmer data security, and complete inclusion. These efforts will enable better planning, resource allocation, and agricultural productivity for farmers across India.

PIB

Facts To Remember

1. Irdai: SwaminathanS Iyer appointed as member

The Appointments Committee of the Cabinet (ACC) has approved the appointment of SwaminathanS Iyer as Whole Time Member (Life) of the Insurance Regulatory and Development Authority of India (Irdai). He is appointed for five years from the date of assumption of charge or until he attains the age of 62 years or until further orders, whichever is the earliest.

2. Groww to raise $250mn led by GIC at $6.8bn valuation

Investment platform Groww is in the process of raising a pre-IPO funding of about $250 million, from a bunch of investors led by Singapore’s sovereign wealth fund GIC, at a valuation of $6.8 billion, said sources familiar with the matter.

3. Government Blocks 1,410 Gaming Sites Under IT Rules Following I4C Reports: Union Minister Ashwini Vaishnaw

Electronics and IT Minister Ashwini Vaishnaw has said that the Government has blocked one thousand 410 gaming sites under the IT intermediary rules after the reports of the Indian Cyber Crime Coordination Centre (I4C).

4. Over 4000 children adopted in country in financial year 2023-24: Union Minister Savitri Thakur

Over four thousand children were adopted in the country in the financial year 2023-24. This was stated by the Minister of State in the Women and Child Development Ministry, Savitri Thakur, in a written reply in Rajya Sabha today.

5. Regulations should not create ‘unintended barriers’ to deepening financial inclusion: RBI Governor Sanjay Malhotra

Reserve Bank of India Governor Sanjay Malhotra has emphasised that regulations should not create “unintended barriers” to deepening financial inclusion.

6. MLTGD components of Gold Monetisation Scheme to be discontinued from today

Medium Term and Long Term Government Deposit (MLTGD) components of Gold Monetisation Scheme (GMS) will be discontinued from today.

7. ILO says, India’s social security coverage doubled from 24.4 % in 2021 to 48.8 % in 2024

India’s social security coverage has seen a significant rise. According to International Labour Organization (ILO), India’s social security coverage has doubled from 24.4 percent in 2021 to 48.8 percent in 2024.

8. India develops first indigenous MRI machine, set to be installed at AIIMS Delhi for trials

India has developed its first indigenous Magnetic Resonance Imaging (MRI) machine, set to be installed at the All India Institute of Medical Sciences (AIIMS), New Delhi, by October for trials.