Daily Current Affairs (DCA) 30 May, 2025

Daily Current Affairs Quiz
30 May, 2025

National Affairs

1. Nurdle Spill in Thiruvananthapuram

What Are Nurdles?

• Definition: Tiny plastic pellets (1 mm to 5 mm in diameter), classified as primary microplastics
• Material Type:
  • Low-Density Polyethylene (LDPE)
  • High-Density Polyethylene (HDPE)
• Usage:
  • Common in packaging, plastic bags, detergent bottles, automotive parts, medical equipment, etc.
• Recyclability: LDPE is difficult to recycle

Environmental and Ecological Impact

• Short-term Hazards:
  • Beach and habitat contamination
  • Immediate threat to marine and coastal ecosystems
• Long-term Risks:
  • Breakdown into micro- and nano-plastics
  • Bioaccumulation in marine food chains
  • Entry into the human food system via seafood consumption

Government & Community Response

• Volunteer Mobilization:
  • State government has deployed volunteers for beach cleanup
• Monitoring Efforts:
  • Drones used by police to assess pellet spread
  • Rapid Response Teams under State Pollution Control Board active on the ground
• Emergency Measures:
  • Mitigation of oil slicks and hazardous materials
  • Protection of fisherfolk livelihoods and marine biodiversity

2. Discovery of a New Detection Code in Quantum Materials

Context:

Scientists have found a new way of spotting a property of topological space called topological invariant in quantum materials, that remains unchanged under continuous deformations or transformations.

Key Scientific Discovery

• Focus Area: Topological quantum materials
• Core Achievement:
  • Discovered a new method to detect “topological invariants” using a property called the spectral function
  • Analysis based on momentum-space spectral function (SPSF)

Importance of Topological Invariants

• Definition: Properties that remain unchanged under continuous transformations of a material’s structure at the quantum level
• Examples: Winding numbers, Chern numbers
• Function: These determine how particles like electrons behave in topological materials

Significance in Technology

• Applications of Topological Materials:
  • Quantum computing
  • Fault-tolerant electronics
  • Energy-efficient devices
• Challenge: Exotic properties are hard to detect
• Breakthrough: New method offers a universal detection tool for classifying and exploring such materials

Potential

• May accelerate discovery and design of next-gen quantum devices
• Can aid in material classification, development of robust quantum circuits, and low-power electronics

PIB

3. E-Hansa: India’s Indigenous Two-Seater Electric Trainer Aircraft

Overview

• Project Initiation: India has commenced development of E-Hansa, a two-seater electric trainer aircraft.
• Developer: Designed and built by CSIR-National Aerospace Laboratories (CSIR-NAL), Bengaluru.
• Announcement: Made by Dr. Jitendra Singh, highlighting a step forward in green aviation and indigenous aerospace innovation.
• Cost: Approximately ₹2 crore, about 50% cheaper than imported trainer aircraft.

Key Highlights

• Aircraft Type: Two-seater electric trainer designed for pilot training.
• Program: Developed under the HANSA-3 (Next Generation) trainer program by CSIR-NAL.
• Price Advantage: Substantially reduces cost compared to imported trainers, enhancing affordability.
• Purpose: To offer an eco-friendly and cost-effective flight training platform supporting sustainable aviation.

Strategic Significance

• Carbon Reduction: Supports India’s commitment to green aviation by promoting zero-emission operations.
• Import Substitution: Reduces dependence on foreign trainer aircraft, enhancing self-reliance in aerospace technology.
• Indigenous Innovation: Encourages the development of homegrown aerospace capabilities with emphasis on cost-effective manufacturing.

4. Tata Elxsi and Partners Launch Battery Aadhaar Initiative at Battery Summit 2025

Overview

• Event: Battery Summit 2025
• Partners: Tata Elxsi, Tata Motors, Tata AutoComp Systems, IIT Kharagpur
• Project: Battery Aadhaar – a digital identification system for batteries
• Alignment: Supports India’s green mobility goals and circular economy principles

What is Battery Aadhaar?

• A digital ID system for batteries enabling full lifecycle traceability
• Uses secure blockchain-backed technology for data integrity
• Developed via Tata Elxsi’s MOBIUS+ platform, in collaboration with Tata Motors, Tata AutoComp, and IIT Kharagpur

Objectives

• Assign unique digital identities to individual batteries
• Enable safe use, regulated reuse, and efficient disposal
• Ensure compliance with national and global battery regulations, including the EU Battery Regulation

Key Features

• Blockchain Integration:
  • Tamper-proof, real-time data logging of each battery unit
• Lifecycle Transparency:
  • Tracks manufacturing details, usage history, and material composition
• Regulatory Compliance:
  • Automated reporting aligned with Indian and international policies
• Sustainability Link:
  • Facilitates circular economy by minimizing battery waste and environmental hazards

Significance and Impact

• Prevents unsafe reuse of degraded or old batteries, enhancing EV safety
• Improves visibility and traceability in India’s battery supply chain
• Supports sustainability and environmental protection through responsible battery management
• Promotes eco-friendly innovation in mobility, energy storage, and electronics sectors
• Reinforces India’s leadership in green technology and supports the National Electric Mobility Mission Plan (NEMMP)

Banking/Finance

1. SEBI Tightens Oversight of Derivatives Market With New Risk-Based Rules

Context:

The Securities and Exchange Board of India (SEBI) has issued a comprehensive circular introducing sweeping changes to the regulatory framework of the equity derivatives market. 

Objective

• To enhance market integrity and curb excessive speculation in the equity derivatives segment.
• To align derivatives risk measurement more closely with underlying cash market activity.
• To prevent market manipulation, especially during F&O ban periods.

Key Changes Announced by SEBI

Futures Equivalent Open Interest (New Method for OI Calculation)

• Replaces the current notional value method with a delta-based model.
• Will compute Open Interest (OI) based on Futures Equivalent Open Interest, factoring in the sensitivity (delta) of each option/future to the underlying stock/index.
• Seen as a more accurate reflection of market risk exposure.

Tighter Position Limits in Single-Stock Derivatives

• Market-Wide Position Limits (MWPL) for single-stock F&O will now be tied to the cash market delivery volume.
• Prevents artificial inflation of MWPL due to far-out-of-the-money options with negligible value.
• Aims to reduce F&O ban misuse and manipulation in illiquid stocks.

Stricter F&O Ban Rules

• Once a stock enters the F&O ban list:
  • Any further trading in its derivatives must reduce exposure by end of day.
  • Clearing Corporations will impose penalties for violations.

New Position Limits in Index Derivatives (Effective July 1, 2025)

• Index Options:
  • Net basis cap: ₹1,500 crore per entity.
  • Gross basis cap: ₹10,000 crore per entity.
• Index Futures:
  • Limits will be based on type of market participant (detailed categorization to follow).
• Passive breaches due to market changes won’t be penalized.

Extended Pre-Open Session

• Pre-open window now includes:
  • Current-month futures on stocks and indices.
  • Next-month contracts during the last 5 trading days before expiry.
• Aim: Ensure smooth rollover and better price discovery.

Implementation

• Most provisions, including index F&O limits, take effect from July 1, 2025.
• Pre-open session changes will be operational before the next expiry cycle.

TET

2. Alternative Investment Funds

Context:

In FY25, Category III Alternative Investment Funds (AIFs) grew nearly 3x faster than Portfolio Management Services (PMS).

• AIF Commitments: ₹2.3 trillion (↑58% YoY)
• PMS AUM: ₹4.3 trillion (↑19% YoY)
• Data Source: SEBI & Association of Portfolio Managers in India (APMI)

What Are Alternative Investment Funds (AIFs)?

Alternative Investment Funds (AIFs) are privately pooled investment vehicles that differ from traditional investment options such as stocks and mutual funds. These funds are typically preferred by High-Net-Worth Individuals (HNIs) and institutional investors due to the high capital requirement.

AIFs operate under the SEBI (Alternative Investment Funds) Regulations, 2012 and can be structured as a company, Limited Liability Partnership (LLP), trust, or other legal entities.

Types of AIFs in India

SEBI classifies AIFs into three categories based on their investment objectives:

Category 1: Growth-Oriented and Impact Investments

These funds primarily invest in start-ups, SMEs, and socially responsible businesses.

• Venture Capital Funds (VCFs)
  • Provide financing to new-age startups with high growth potential.
  • Suitable for investors with a high-risk, high-return mindset.
• Angel Funds
  • Invest in early-stage start-ups that lack access to venture capital.
  • Minimum investment per angel investor: ₹25 lakh.
• Infrastructure Funds
  • Focus on companies involved in railway, port, and urban development projects.
  • Attract investors optimistic about India’s infrastructure growth.
• Social Venture Funds
  • Invest in businesses with social impact objectives, such as healthcare and education.
  • Offer philanthropic benefits while aiming for moderate returns.

Category 2: Private and Debt-Focused Investments

These funds invest in a range of private and debt instruments without leveraging.

• Private Equity (PE) Funds
  • Invest in unlisted private companies with high growth potential.
  • Typically have a lock-in period of 4-7 years.
• Debt Funds
  • Primarily invest in debt securities of unlisted firms.
  • Target companies with strong corporate governance but lower credit ratings.
  • SEBI guidelines prohibit the use of funds for direct lending.
• Fund of Funds (FoFs)
  • Invest in other AIFs rather than directly into securities.
  • Suitable for investors seeking diversified exposure.

Category 3: Market-Driven and High-Risk Investments

These funds employ aggressive strategies and often invest in listed securities.

• Private Investment in Public Equity (PIPE) Funds
  • Acquire publicly traded shares at discounted rates.
  • Less regulatory burden than traditional secondary issues.
• Hedge Funds
  • Invest in both domestic and global equity & debt markets.
  • Use complex strategies like derivatives and leverage for high returns.
  • Typically charge high fees (e.g., 2% management fee + 20% of profits).

Who Can Invest in AIFs?

AIFs cater to sophisticated investors with substantial capital.

• Eligible investors: Resident Indians, NRIs, and foreign nationals.
• Minimum investment: ₹1 crore (₹25 lakh for fund managers, employees, and directors).
• Lock-in period: Minimum 3 years.
• Investor cap per scheme: Maximum 1,000 investors (except Angel Funds, which allow up to 49).

Benefits of Investing in AIFs

• High Return Potential – AIFs enable fund managers to deploy strategic, high-growth investment models.
• Lower Volatility – These funds are less affected by stock market fluctuations, making them more stable.
• Diversification – AIFs provide exposure to alternative assets, reducing risk during market downturns.

3. SEBI’s Investor Protection and Market Integrity Measures

UPI-linked Fraud Prevention System

• New UPI System Underway:
  • Investor funds will only be transferred to pre-registered bank accounts
  • Objective: Prevent cyber fraud, misrouting of funds, and scams via fake trading platforms
• Whitelist Mechanism:
  • Only approved financial apps will remain on Play Store
  • Non-whitelisted/unregulated apps to be pulled down

Crackdown on Unregulated ‘Finfluencers’

• Action Taken:
  • SEBI has removed 70,000 unregistered finfluencers
  • Ongoing removal rate: 5,000 per month
• New Advertisement Restriction:
  • No SEBI-regulated entity is allowed to advertise via unregistered finfluencers
  • Aim: Dismantle the business model of misinformation-based market promotion

Combatting Misinformation by Listed Companies

• Verification System in Progress:
  • Exchanges to verify disclosures and claims made by listed companies
  • False or misleading disclosures will be flagged quickly to protect retail investors

Cybersecurity and Inter-agency Coordination

• Collaborations Planned:
  • Coordination with state police, cybercrime units, ED, and CBI
  • Plan to build multi-agency response systems for financial cybercrimes
• Investor Education Push:
  • Focus on portfolio allocation awareness, especially among F&O retail investors
  • SEBI emphasizes that “overnight wealth through trading” is a gambling illusion

4. SEBI’s New Risk Monitoring Framework & Position Limits Update

Context:

The Securities and Exchange Board of India (SEBI) has come up with a new framework for risk monitoring and increased the position limits for futures and options. In its latest circular, the markets watchdog said it had changed the method to calculate the value of open interest (OI) from notional value-based to delta-based. The new method will weigh OI by the price sensitivity making it impossible to manipulate trades.

Key Highlights:

• Change in Open Interest (OI) Calculation:
  • Shift from notional value-based to delta-based method
  • Delta-based OI weights positions by price sensitivity of derivatives
  • Objective: Make trade manipulation impossible by more accurate risk measurement
• Increase in Position Limits:
  • SEBI has raised the maximum permissible limits for futures and options positions
  • Intended to enhance market liquidity and participation
• Significance:
  • Improved risk monitoring to strengthen market integrity
  • Reflects SEBI’s push for robust derivatives market regulation

5. RBI Guidelines on Gold Loan Portfolio Monitoring and Risk Management

Context:

The Reserve Bank of India (RBI) has issued directives to banks and non-banking finance companies (NBFCs) to strengthen monitoring and controls over gold loan portfolios, especially concerning outsourced activities and third-party service providers.

Key Findings from RBI’s Supervisory Review

• Irregularities detected include:
  • Lapses in monitoring Loan-to-Value (LTV) ratios
  • Incorrect application of risk weights
  • Weak controls on third-party loan sourcing and appraisal
  • Inadequate due diligence and end-use monitoring
  • Lack of transparency during gold ornament auctions

RBI Directives to Banks and NBFCs

• Conduct comprehensive reviews of policies, processes, and practices related to gold loans
• Identify operational gaps and implement time-bound remedial measures
• Strengthen oversight on outsourced activities and third-party involvement in gold loans

Draft Guidelines on Loans Against Gold (April 2025)

• Maintain an LTV ceiling of 75% throughout the loan tenure, including principal and accrued interest
• Expected impact:
  • Reduction in gold loan disbursement to 55–60% from current 65–68% for bullet repayment loans
  • Higher LTV may be allowed for EMI-based loans, facilitating faster loan portfolio reduction

Portfolio Risk Management Requirements

• Establish and periodically review a ceiling on gold-backed loans as a percentage of total loans and advances
• Factors to consider for setting limits:
  • Portfolio granularity
  • Collection efficiency
  • Auction-based realisation performance
  • Economic capital adequacy
  • Concentration risks

Significance and Implications

• The RBI aims to mitigate risks in gold loan portfolios and enhance transparency
• The 75% LTV cap prevents excessive leveraging on gold assets
• Enhanced supervision of third-party sourcing reduces operational and credit risks
• Regular portfolio reviews help maintain financial stability and reduce potential defaults

6. Parliamentary Committee Flags Ambiguities in Insolvency and Bankruptcy Code (IBC)

Context:

A parliamentary Standing Committee on Finance reviewed concerns related to the Insolvency and Bankruptcy Code (IBC), highlighting ambiguities and potential amendments. The review follows the Supreme Court’s recent judgment rescinding JSW Steel’s resolution plan for Bhushan Power and Steel Ltd (BPSL), sparking debates on the insolvency mechanism’s efficiency.

Key Highlights from the Committee Deliberations

• Supreme Court Judgment:
  • SC rescinded JSW Steel’s resolution plan for BPSL.
  • Put a status quo on BPSL’s liquidation after JSW Steel’s plea citing damage to the company, lenders, and employees.
• Issues Raised:
  • Ambiguities and inadequacies in the IBC, especially delays in the resolution process.
  • Reference to prior committee (headed by Jayant Sinha) that also highlighted legal gaps and recommended amendments.
  • Initial government amendments accommodated some prior recommendations.
• Government’s Stance:
  • Actively addressing concerns related to the IBC.
  • Potential for further amendments to improve the code.
  • IBC recognized as a useful tool for distressed companies and creditors.

About the Insolvency and Bankruptcy Code (IBC)

• Enacted: 2016
• Purpose:
  • Provide a clear legal framework for insolvency resolution of individuals, partnership firms, and corporate entities.
  • Facilitate timely revival of financially distressed businesses.
  • Enable creditors to recover dues efficiently.
• Central Goals:
  • Streamline insolvency resolution processes.
  • Protect stakeholder interests.
  • Enhance overall efficiency and health of the Indian economy.

Significance and Implications

• IBC continues to evolve as a dynamic law responding to practical challenges.
• Amendments aim to reduce delays, clarify ambiguities, and strengthen insolvency resolution mechanisms.
• The parliamentary review and judicial interventions reflect efforts to balance creditor rights with company revival.
• Ongoing reforms could improve investor confidence and financial stability in India’s corporate sector.

Agriculture

1. Union Cabinet Approves Continuation of Modified Interest Subvention Scheme (MISS) for FY 2025–26

Context:

MISS is a central sector scheme designed to provide concessional short-term crop loans to farmers through the Kisan Credit Card (KCC) system.

• It aims to make agricultural credit affordable, encouraging timely loan repayment and reducing rural indebtedness.
• Launched in 2006–07, it is implemented jointly by the Reserve Bank of India (RBI) and NABARD via Public Sector Banks, Regional Rural Banks (RRBs), Cooperative Banks, and Private Banks.
• The Ministry of Agriculture and Farmers’ Welfare is the nodal ministry overseeing the scheme.

Objectives of MISS

• Enhance the flow of credit to agriculture and allied sectors like dairy, animal husbandry, and fisheries.
• Provide working capital support for farming activities.
• Reduce borrowing costs for small and marginal farmers.
• Incentivize prompt repayment via interest discounts.
• Offer financial relief during natural calamities.

Key Features of MISS for FY 2025–26

• Interest Rate Subsidy:
  • Farmers receive loans up to ₹3 lakh at an interest rate of 7%.
  • Lending institutions get an interest subvention of 1.5% from the government.
  • A Prompt Repayment Incentive (PRI) of 3% reduces the effective interest rate to 4% for farmers who repay promptly.
• Sectoral Coverage: Applies to crop loans, animal husbandry, and fisheries loans (up to ₹2 lakh).
• Loan Limit Enhancement: Budget 2025–26 proposes increasing the loan limit to ₹5 lakh to cover broader agricultural needs.
• Calamity Support: A 2% interest subvention is available on restructured loans in case of natural disasters.
• Wide Reach: Over 7.75 crore KCC accounts benefit nationwide, promoting rural financial inclusion.
• Digital Innovation: Introduction of the Kisan Rin Portal (KRP) in 2023 enables faster, transparent claim processing under the scheme.

Facts To Remember

1. Mixed relay team wins second gold for India

Reigning champion India successfully defended its title in the 4x400m mixed relay for the country’s second gold at the Asian Athletics Championships on day two of the competition in Gumi, South Korea.

2. Kerala government declares Kochi shipwreck a State disaster

The Kerala government has declared the shipwreck that occurred 14.6 nautical miles off its coast on May 24 a “State-specific disaster”.

3. China launches Tianwen-2 to collect asteroid samples by 2027

China launched early the Tianwen-2 spacecraft to collect samples from near-Earth asteroid 2016HO3 and explore main-belt comet 311P.

4. Ngũgĩ wa Thiong’o, famed Kenyan novelist and dissident, dies aged 87

Ngũgĩ wa Thiong’o, the revered Kenyan man of letters and voice of dissent who in dozens of fiction and non-fiction books traced his country’s history from British imperialism to home-ruled tyranny and challenged not only the stories told but the language used to tell them, died at 87.

5. Jyothi, Sable and women’s 4x400m quartet make it a golden day for India

Some of the country’s biggest medal hopes duly delivered on the big stage as India added six medals to its tally including three gold on day three of the Asian Athletics Championships in Gumi, South Korea