Daily Current Affairs (DCA) 7 August, 2025

Daily Current Affairs Quiz
7 August, 2025

National Affairs

1. Carriage of Goods by Sea Bill, 2025

Context:

India has enacted the Carriage of Goods by Sea Bill, 2025, replacing the Carriage of Goods by Sea Act, 1925, a colonial-era legislation. This reform aims to align Indian maritime trade laws with international conventions and boost the ease of doing business in the shipping sector.

Key Features

• Repeal of 1925 Act: Eliminates outdated provisions rooted in colonial law.
• Incorporation of Hague–Visby Rules:
  • Standardizes bills of lading.
  • Defines carrier obligations and liabilities clearly.
• Codified Carrier Responsibilities:
  • Includes liability for loss/damage, exceptions, and time limits for claims.
• Government Empowerment:
  • Centre can adopt emerging international maritime rules via notification.
  • Enables faster alignment with future global standards.
• Parliamentary Oversight:
  • Ensures executive decisions on international conventions are subject to legislative review.
• Trade Facilitation:
  • Supports India’s ambition to become a global maritime logistics hub.

Objectives of the Bill

• Modernisation of Maritime Law: Replaces the 1925 Act with a contemporary legal framework.
• Global Alignment: Adopts Hague–Visby Rules, widely accepted international norms on cargo carriage by sea.
• Ease of Doing Business: Simplifies legal language, reduces ambiguities, and makes India more attractive for maritime trade.
• Future-readiness: Enables India to adopt future international maritime conventions via government notifications.
• Dispute Reduction: Clarifies the roles, responsibilities, and liabilities of carriers, reducing litigations and trade delays.

About Hague–Visby Rules

• A set of international rules that regulate the carriage of goods by sea.
• Originated from the Hague Rules (1924) and revised by the Visby Protocol (1968) and SDR Protocol (1979).
• Formal Title: “International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading.”
• Adopted by many maritime nations to ensure uniformity in carrier liability.

IE

2. Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme

Context:

India has achieved a record-low Green Ammonia price of ₹55.75/kg in the first SECI auction under Mode-2A of the SIGHT Scheme, marking a milestone in India’s clean energy transition.

About SIGHT Scheme

What is it?

A key financial mechanism under the National Green Hydrogen Mission (NGHM) designed to:

• Scale up production and usage of green hydrogen and its derivatives.
• Reduce costs to make green hydrogen competitive with fossil fuels.
• Create domestic demand across sectors like fertilizer, shipping, steel, and refining.

Nodal Ministries

• Ministry of New & Renewable Energy (MNRE) – Lead implementing agency.
• Ministry of Petroleum & Natural Gas (MoPNG) – Supports demand creation and offtake.

Modes of Implementation

Mode	Description
Mode 1	Incentive awarded to lowest incentive seeker (reverse auction model).
Mode 2A	Fixed incentive for Green Ammonia procurement via demand aggregation.
Mode 2B	Fixed incentive for Green Hydrogen procurement via demand aggregation.

Budgetary Outlay

• ₹17,490 crore out of ₹19,744 crore (total NGHM budget) allocated to SIGHT.
• Covers production incentives, infrastructure, and offtake support.

What is Green Ammonia?

• Green Ammonia is produced using Green Hydrogen, generated through electrolysis powered by renewable energy.
• It is crucial for:
  • Fertilizer production
  • Marine fuel (low-carbon shipping)
  • Clean energy storage and chemicals manufacturing

TET

3. Merchant Shipping Bill, 2024

Context:

The Lok Sabha passed the Merchant Shipping Bill, 2024 on August 6, 2025, amidst ongoing opposition protests. The Bill is a major step toward modernizing India’s maritime legislation and aligns with the government’s broader agenda to strengthen the blue economy and maritime governance.

Why the Bill Matters?

• Repeals the outdated Merchant Shipping Act, 1958, reducing complexity—from 561 sections to 16 parts and 325 clauses.
• Modernizes maritime law to align with global conventions (MARPOL, Wreck Removal, ILO–MLC, STCW).
• Enables India to emerge as a credible and competitive maritime hub.

Key Provisions:

1. Expanded Ownership Criteria

• Allows NRIs, OCIs, body corporates, and joint ventures to own Indian-flagged vessels.
• Permits bareboat charter cum demise (BBCD) vessels to be registered before full ownership transfer.
• Helps increase Indian tonnage, cut foreign outflows, and grow the domestic fleet.

2. Detaining Stateless Vessels

• Government empowered to seize or detain vessels deemed to be without nationality within Indian waters.

3. Marine Casualty Inquiry Mechanism

• Framework for investigation of marine incidents, including pollution, ship wrecks, and emergencies.
• Enables enforcement of IMO conventions for environmental protection.

4. Seafarer Welfare & Training

• Introduces statutory obligations aligned with the Maritime Labour Convention (MLC, 2006).
• Oversees health, repatriation, skill training, and accountability of Recruitment & Placement Agencies (RPS).
• Aligns ship crew training with STCW Convention norms, boosting employability.

5. Safety, Salvage & Environmental Protection

• Adopts provisions from Nairobi Wreck Removal (2007), Salvage Convention (1989), and Bunker Oil Convention.
• Grants statutory powers for pollution control, inspection, wreck removal, and effective emergency response—critical for India’s 95% trade reliance on shipping.

ET

4. Biochar

Context:

As India advances its commitment toward net-zero emissions by 2070, scalable and cost-effective carbon removal technologies are essential. Among these, biochar—a charcoal-like substance produced from biomass—is emerging as a high-potential tool for carbon sequestration, soil health enhancement, and waste management.

What is Biochar?

Biochar is produced through pyrolysis, a process that heats organic material (like crop residues, forest waste, or manure) in the absence of oxygen. Unlike combustion, pyrolysis preserves the carbon content in a stable form that can remain in soil for centuries.

Benefits of Biochar in the Indian Context

1. Carbon Sequestration

• Biochar can store carbon for hundreds to thousands of years.
• According to the IPCC, biochar has the potential to sequester up to 2.6 gigatonnes of CO₂ annually globally.
• In India, with abundant agricultural waste, the technical potential could reach 100–150 Mt CO₂ per year by 2050.

2. Waste Management Solution

• India generates over 500 million tonnes of crop residues annually.
• Biochar offers an alternative to stubble burning, particularly in Punjab and Haryana, reducing air pollution and black carbon emissions.

3. Soil Health and Productivity

• Enhances soil fertility, water retention, and microbial activity.
• Particularly useful in degraded or arid soils found across central and peninsular India.
• Reduces the need for chemical fertilizers, thus supporting sustainable agriculture.

4. Livelihood Opportunities

• Rural entrepreneurs, farmers, and SHGs can establish decentralized biochar units.
• Encourages green jobs and circular economy practices.
• Supports India’s Startup India and Atmanirbhar Bharat missions.

Current Gaps:

• No national policy framework for biochar in carbon markets or agriculture.
• Lack of standardized certification and verification mechanisms for carbon credits.
• Low awareness among farmers and limited R&D support.

Emerging Opportunities:

• Voluntary carbon markets increasingly recognize biochar as a durable carbon removal solution.
• India can monetize biochar projects under Article 6 of the Paris Agreement through bilateral or international cooperation.
• Government initiatives like PM-PRANAM, National Mission on Sustainable Agriculture, and GOBARdhan can integrate biochar incentives.

International Examples for India to Learn From

• Australia and the U.S. have developed strong biochar protocols under voluntary carbon standards like Verra and Puro.Earth.
• Kenya and Ghana use biochar for both carbon credits and soil restoration, especially in degraded lands.

TH

Banking/Finance

1. RBI Holds Repo Rate at 5.5%

Context:

Despite speculation of a 25 bps rate cut, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) opted for a status quo, unanimously holding the policy repo rate at 5.5%. The decision was guided by inflation risks, global uncertainty, and the need for forward-looking monetary policy.

Why RBI Held the Repo Rate?

1. Global Trade Uncertainty
   • New 25% US tariffs on Indian exports created instability; RBI chose caution to safeguard external sector.
2. Real Estate Weakness
   • Housing sales fell 20% YoY in Q2 2025; buyer sentiment remains weak amid uncertainty.
3. Low Inflation
   • Inflation dropped to 2.1% in June 2025, but RBI avoided further cuts to prevent demand overheating.
4. Past Rate Cuts Still Working
   • 100 bps cut since Feb 2025 is still being transmitted; RBI is allowing time for full impact.

Impact on the Indian Economy

• Short-Term Effects
  • Loan EMIs remain unchanged for home, auto, and personal loans.
  • Deposit rates stay attractive, benefiting savers, especially seniors.
• Consumption & Investment
  • Consumer demand may remain muted due to still-high borrowing costs.
  • Private investment could slow in interest-sensitive sectors like real estate and manufacturing.
• Inflation
  • A steady rate supports ongoing disinflation and avoids premature demand-driven price spikes.
• Financial Markets
  • Bond yields remain stable; the move signals RBI’s policy caution.
  • Equity markets may stay range-bound unless clear cues on future rate cuts emerge.

What is Repo Rate and Reverse Repo Rate?

Repo Rate

• The Repo Rate (short for Repurchase Rate) is the rate at which RBI lends money to commercial banks against government securities.
• It is the main policy tool for controlling liquidity, inflation, and growth.

Current Repo Rate (as of August 2025): 5.5%

Reverse Repo Rate

• The Reverse Repo Rate is the rate at which RBI borrows money from commercial banks by offering them government securities.
• It is used to absorb excess liquidity from the banking system.

Current Reverse Repo Rate: 3.35%

What Happens When RBI Changes Repo/Reverse Repo Rates?

When RBI Cuts Repo Rate:

• Cheaper loans: Banks borrow at lower cost → reduce lending rates → boost consumption and investment.
• Lower EMIs: Home, auto, personal loan EMIs fall → consumer spending rises.
• Boosts growth: Encourages borrowing and capital expenditure.
• May raise inflation if done during high demand or supply constraints.

When RBI Raises Repo Rate:

• Costlier loans: Banks pass on higher borrowing costs → lending rates rise.
• Tames inflation: Reduces demand in the economy by discouraging excessive borrowing.
• Supports rupee: Higher rates attract foreign capital → stabilizes currency.
• May slow growth if borrowing becomes too expensive.

BS & ET

2. RBI Panel Recommends Retaining WACR as Operating Target for Monetary Policy

Context:

Amid global uncertainties and market volatility, the Reserve Bank of India’s internal working group has reaffirmed the Weighted Average Call Rate (WACR) as the most suitable operational target for monetary policy, citing its alignment with policy stance and regulatory control.

Key Recommendations of the RBI Working Group:

1. Retain WACR as the Operating Target

• WACR (Weighted Average Call Rate):
  • The average interest rate at which banks borrow money from each other overnight in the unsecured market.
• Why Retain?
  • It accurately reflects the RBI’s liquidity stance and transmits policy changes effectively as it includes credit and counterparty risk, unlike collateralized instruments.

2. Discontinue 14-Day VRR/VRRR as Main Liquidity Operation

• VRR/VRRR (Variable Rate Repo/Reverse Repo):
  • Auctions where the interest rate is determined by market bids; used to inject (repo) or absorb (reverse repo) liquidity.

3. Use 7-Day or Shorter-Tenor Operations for Fine-Tuning

• Tenor:
  • The duration or term of a financial contract or instrument.
• Why Shorter Tenors?
  • Operations of up to 7 days offer greater flexibility to manage day-to-day liquidity pressures efficiently.

4. No New Tools Required

• FX Swap Auctions:
  • RBI buys or sells foreign currency while agreeing to reverse the transaction later to adjust rupee liquidity.

5. Current Instruments Are Adequate:

• Open Market Operations (OMOs):
  • RBI buys/sells government securities to manage money supply.
• Long-term VRR/VRRR:
  • Used for durable liquidity adjustments with longer tenors (e.g., 1 month, 3 months).

BS

3. RBI Introduces SIP Facility for Treasury Bills via Retail Direct Platform

Context:

The Reserve Bank of India (RBI) has launched a Systematic Investment Plan (SIP) facility for Treasury Bills (T-bills) under its Retail Direct scheme, marking a major expansion in direct access to government securities for retail investors.

Key Highlights:

• New Auto-Bidding Functionality:
  • Retail investors can now automatically place bids in primary T-bill auctions.
  • Facility covers both investment and reinvestment, enabling SIP-like investment planning in short-term government instruments.
• Retail Direct Portal:
  • Launched in November 2021.
  • Allows retail participation in:
    • Primary auctions of G-Secs, T-bills
    • Secondary market trading of government securities.
  • Investors can open a Retail Direct Gilt (RDG) account directly with the RBI.

What Is a SIP in T-bills?

A Systematic Investment Plan (SIP) allows retail investors to invest fixed amounts at regular intervals (e.g., weekly, monthly) into Treasury Bills, just like SIPs in mutual funds.

What Are Treasury Bills (T-bills)?

• Short-term Government Securities with maturities of 91, 182, or 364 days.
• Issued at a discount and redeemed at face value, offering risk-free returns.
• Backed by the Government of India.

Key Features of SIP in T-bills:

• Available via RBI Retail Direct platform.
• Allows automatic periodic investment into T-bills.
• Ideal for conservative investors, including senior citizens and risk-averse savers.
• Offers liquidity, capital safety, and returns better than bank savings accounts.

Impact on Financial Markets:

• Boosts Retail Participation in sovereign debt market.
• Encourages financial literacy and discipline in retail investing.
• Supports market depth and broadens the investor base for government securities.

Mint

4. RBI Revises Co-Lending Framework to Enhance Transparency and Risk Sharing

Context:

The Reserve Bank of India (RBI) issued revised guidelines to strengthen the co-lending framework between banks and non-bank financial companies (NBFCs). The new rules mandate that all regulated entities (REs) involved in co-lending arrangements (CLAs) must retain at least 10% of each individual loan on their own books.

Objectives

• Strengthen the co-lending partnership framework between banks and non-bank lenders.
• Improve risk alignment, ensure uniform asset classification, and protect borrower interests.
• Expand co-lending applicability beyond priority sector lending (PSL) to non-priority sector loans.

Key Features of the Revised Co-Lending Norms:

1. Minimum Loan Retention Requirement:

• All regulated entities (REs) must retain at least 10% of each loan on their own books.
• Promotes risk participation and skin in the game for both partners.

2. Default Loss Guarantee (DLG) Provision:

• Originating lender may offer a first-loss guarantee up to 5% of the outstanding loan amount.
• Aligns with existing FLDG norms under digital lending.

3. Uniform Asset Classification:

• If one partner classifies a loan as an SMA (Special Mention Account) or NPA, the same must be adopted by the co-lender for their portion.
• A Special Mention Account (SMA) is a classification used by banks to identify potentially stressed loan accounts before they officially become Non-Performing Assets (NPAs).

4. Credit Policy Alignment:

• All REs must explicitly incorporate co-lending provisions in their internal credit policies.

5. Mandatory Disclosures in Loan Agreement:

• Loan agreements must clearly define roles of each partner (e.g., sourcing, servicing).
• Must mention the single point of contact for the borrower.

6. Blended Interest Rate Mechanism:

• Borrowers will be charged a blended rate, calculated based on the weighted average of each lender’s internal rate in proportion to their contribution.

7. Annual Percentage Rate (APR) Transparency:

• All additional fees or charges beyond the blended rate must be factored into the APR and disclosed.

8. Escrow-Based Transaction Handling:

• All loan disbursements and repayments must flow through an escrow account maintained with a bank.
• An Escrow Account is a temporary, third-party account where funds are held safely until all conditions of a transaction are fulfilled by the involved parties.
• Ensures real-time settlement, audit trail, and greater transparency.

9. Timely Loan Recognition:

• Loan portions must be reflected on each partner’s books within 15 days of origination.

10. Expanded Applicability:

• Framework now covers:
  • Non-priority sector lending
  • Co-lending between any regulated entities (not just bank-NBFC partnerships)

ET

5. RBI Unveils Three Consumer-Focused Schemes to Boost Financial Inclusion

Context:

In a major push towards inclusive financial growth, Reserve Bank of India Governor Sanjay Malhotra announced three key consumer-centric initiatives following the August 2025 MPC meeting. These schemes target ease of access, simplified procedures, and broader retail participation, especially benefiting those at the bottom of the financial pyramid.

1. Doorstep Re-KYC for Jan Dhan Account Holders

Objective: To simplify KYC compliance for financially underserved sections.

• Method: Banks will organize Re-KYC camps at the Panchayat level.
• Additional Services:
  • Opening of new bank accounts.
  • Enrolment in micro-insurance and pension schemes.
  • Redressal of customer grievances.
• Significance: Supports 10-year milestone of Pradhan Mantri Jan Dhan Yojana (PMJDY) and promotes last-mile connectivity in banking.

2. Simplified Claims Process for Deceased Customers

Objective: To relieve families of procedural burdens after the death of a bank account holder.

• Key Features:
  • Standardized and streamlined process across all banks.
  • Uniform timelines and documentation requirements.
  • Applies to both account funds and locker contents.
• Impact:
  • Reduces legal and administrative hassles.
  • Offers faster and fairer access to rightful claimants.

3. Systematic Investment Plans (SIPs) in Government Securities via Retail Direct

Objective: To promote retail investor participation in sovereign debt markets.

• New Feature: Enables SIP functionality for Treasury Bills (T-Bills).
• Platform: RBI’s Retail Direct portal, launched in 2021.
• Benefits:
  • Encourages automated, disciplined investing.
  • Makes short-term G-Sec instruments accessible to small investors.
• Outcome Expected: Enhanced financial literacy, greater depth in the G-Sec market, and improved household savings discipline.

Why It Matters?

These reforms underline the RBI’s commitment to:

• Financial inclusion and consumer empowerment.
• Streamlining legacy banking processes.
• Democratizing access to investment instruments.

BS & Mint

6. Axis Bank Launches ‘Lock FD’ Feature

Context:

Axis Bank has launched a ‘Lock FD’ feature for safeguarding customers’ Fixed Deposits (FDs) from rising digital frauds by allowing them to restrict FD closures through digital means.

Objective

To enhance the security of fixed deposits (FDs) by restricting premature closure through digital platforms, thereby protecting customers from online fraud.

What are Fixed Deposits (FDs)?

A Fixed Deposit (FD) is a savings and investment instrument offered by banks and NBFCs where you deposit a lump sum for a fixed tenure at a predetermined interest rate. It’s one of the most popular low-risk investment options in India.

Key Features of ‘Lock FD’

• Security Layer: Once the ‘Lock FD’ option is enabled, FDs cannot be prematurely closed via internet or mobile banking.
• Branch-only Closure: Closure of such locked FDs requires physical branch visit, ensuring identity verification.

BL

7. Tata AIA Launches ‘Shubh Shakti’

Context:

On August 6, 2025, Tata AIA Life Insurance launched “Shubh Shakti”, a term insurance plan exclusively designed for women. The initiative targets rising female workforce participation and the persistent gender gap in financial planning and insurance coverage in India.

Read more>>

8. Gro Digital Platforms and IDFC FIRST Bank Partner to Launch FASTag Services for Fleet Operators

Context:

Gro Digital Platforms, a logistics services platform jointly promoted by Ashok Leyland and Hinduja Leyland Finance, has signed a Memorandum of Understanding (MoU) with IDFC FIRST Bank to launch FASTag services for fleet operators across India.

FASTag Services

FASTag is an electronic toll collection (ETC) system in India, operated by the National Payments Corporation of India (NPCI) under the National Electronic Toll Collection (NETC) program, mandated by the Ministry of Road Transport and Highways (MoRTH). It uses Radio Frequency Identification (RFID) technology for automatic toll deduction without stopping at toll plazas.

Read more>>

Agriculture

1. Punjab: First State to Upgrade Cooperative Banks to Finacle 10

Context:

Punjab has become the first state in India to complete the upgrade of its cooperative banks’ Core Banking Solution (CBS) from Finacle 7 to Finacle 10, marking a major leap in digital transformation for the rural banking sector.

Key Highlights:

• Banks Upgraded:
  • SAS Nagar Central Cooperative Bank
  • Ropar Central Cooperative Bank
• Under Aegis of: NABARD (National Bank for Agriculture and Rural Development)
• Significance of Upgrade:
  • Faster, more secure, and customer-friendly banking services at grassroots level.
  • Enhances transparency, operational efficiency, and security.
  • Strengthens rural banking infrastructure to better serve farmers, self-help groups, and rural entrepreneurs.

What is Finacle?

Finacle is a core banking solution developed by Infosys used by banks for digital banking operations, including account management, deposits, loans, payments, and customer relationship management.

About Finacle 7

• Era: Older version (legacy system), widely used in early 2000s–2010s.
• Architecture: Primarily client-server based, less modular.
• Interface: Text-based UI, required bank staff to remember transaction codes.
• Features: Basic core banking functionalities like savings accounts, deposits, loans, and fund transfers.

About Finacle 10

• Developed by Infosys, Finacle is a Core Banking Solution (CBS) widely used by banks worldwide.
• Finacle 10 offers:
  • Cloud-ready architecture for scalability.
  • Advanced cybersecurity features.
  • AI-powered analytics for customer service.
  • Faster transaction processing compared to earlier versions.
  • Support for digital channels like mobile & internet banking seamlessly.

Why This Matters for Cooperative Banks

• Cooperative banks operate deeply in rural and semi-urban areas, often serving as the primary banking touchpoint for millions.
• Upgrading to Finacle 10 enables them to:
  • Provide real-time transactions and digital services.
  • Integrate UPI, AEPS, and other payment systems.
  • Meet RBI compliance more efficiently.
  • Offer personalised financial products based on customer data.

NABARD

Facts To Remember

1. PM Modi inaugurates Kartavya Bhavan in Delhi

The Prime Minister inaugurated Kartavya Bhavan at Kartavya Path in the National Capital. This development is part of the ongoing Central Vista Redevelopment Project. 

2. IRCTC Receives RBI Nod to Operate as Payment Aggregator

On 4 August 2025, the Reserve Bank of India (RBI) granted in-principle authorization to IRCTC Payments Limited—a wholly-owned subsidiary—to operate as an online payment aggregator (PA) under the Payment and Settlement Systems Act, 2007.

3. Donald Trump doubles India tariff to 50% over Russian oil purchase

US President Donald Trump on Wednesday signed an executive order doubling India tariff to 50 per cent, announcing an additional 25 per cent duties over Russian oil purchase, according to the White House website.