Daily Current Affairs (DCA) 7 May, 2025

Daily Current Affairs Quiz
7 May, 2025

International Affairs

1. India-UK Sign Historic Free Trade Agreement (FTA)

Context:

Prime Ministers Narendra Modi and Keir Starmer jointly announced the successful conclusion of a landmark India-UK Free Trade Agreement (FTA). The deal includes a Double Contribution Convention, aimed at boosting bilateral investment and economic cooperation.

Key Trade Benefits for Both Nations

• For India:
  • Zero-duty access for 99% of Indian exports to the UK.
  • Enhanced competitiveness for sectors including textiles, toys, leather, gems & jewellery, marine products, and footwear.
  • Tariffs on whisky and gin will fall from 150% → 75%, then to 40% in 10 years.
  • Auto tariffs reduced from 100%+ to 10% under a quota system.
  • Sensitive items like dairy, apples, and cheese are excluded from concessions to protect Indian farmers.
• For the UK:
  • Cheaper exports to India in whisky, gin, automobiles, medical devices, electrical machinery, cosmetics, soft drinks, chocolates, and lamb.
  • Increased access to India’s fast-growing consumer market.

Landmark Social Security Pact (Double Contribution Convention)

• Indian professionals working in the UK will get a 3-year exemption from social security payments.
• Expected to benefit over 60,000 IT sector employees.
• Could lead to 20% savings on employee salaries, a longstanding Indian demand.

Key Beneficiary Sectors

• Textiles and Apparel
• Leather and Footwear
• Gems and Jewellery
• Pharmaceuticals
• Agriculture and Processed Foods
• Fast-Moving Consumer Goods (FMCG)
• Healthcare and Innovation-driven enterprises

Projected Economic Impact

• Bilateral trade to rise by £25.5 billion.
• Positive implications for job creation, investment inflows, and supply chain integration.
• Enhanced prospects for Indian industries like engineering goods, marine exports, and apparel.

TH

National Affairs

1. Operation Sindoor

Context:

The Indian government confirmed that ‘Operation Sindoor’ was carried out in response to the terrorist attack in Pahalgam, J&K, where 26 civilians were killed. The operation, aimed to hold accountable those responsible for the attack.

Operation Highlights

• According to the official statement:
  • The strikes targeted terrorist infrastructure located in Pakistan and Pakistan-Occupied Kashmir (POK).
  • Indian forces maintained a measured and non-escalatory approach, avoiding Pakistani military installations.
  • The operation showcased India’s strategic restraint in both target selection and execution methods.

TOI

2. India’s HDI Ranking 2025

Context:

India ranks 130th out of 193 countries and territories in the 2025 Human Development Index (HDI) released by the United Nations Development Programme (UNDP)

• HDI score improved from 0.676 (2022) to 0.685 (2023).
• India remains in the ‘medium human development’ category but is now closer to the high development threshold (≥0.700).

Long-Term Gains and Recovery

• India’s HDI value has grown by over 53% since 1990, outpacing global and South Asian averages.
• Key drivers of improvement:
  • Rising national income per capita
  • Increase in mean years of schooling
  • Life expectancy at its highest since the HDI began
• UNDP India attributes this progress to post-pandemic recovery and long-term investments in well-being.

Criteria

The Human Development Index (HDI) uses three main criteria to assess a country’s progress in human development: life expectancy, education, and standard of living. These criteria are then quantified into a single index value between 0 and 1, with higher values indicating greater development. 

Elaboration:

• Life Expectancy: This criterion assesses a country’s average lifespan at birth, reflecting the health and longevity of its population. 
• Education: The HDI considers two aspects of education:
  • Mean years of schooling: The average number of years of schooling completed by the adult population. 
  • Expected years of schooling: The number of years of schooling that a child of school-entering age can expect to receive. 
• Standard of Living: This criterion is measured by Gross National Income (GNI) per capita. GNI per capita reflects the average income of a country’s citizens and is used to assess their economic well-being. 

Challenges and Inequality Concerns

• Inequality remains a major setback, reducing India’s HDI by 30.7%, one of the highest losses in South Asia.
• While inequality in health and education has lessened, income and gender disparities remain pronounced.
• Female labour force participation and political representation are still low.
• Recent steps, such as the constitutional amendment reserving one-third seats for women in legislatures, offer hope for inclusive growth.

Regional Comparison: India vs. Neighbours

Country	HDI Rank (2025)	HDI Value
China	75	Not specified
Sri Lanka	78	Not specified
Bhutan	127	Not specified
India	130	0.685
Bangladesh	130 (tied)	Not specified
Nepal	145	Not specified
Myanmar	149	Not specified
Pakistan	168	Not specified

Global HDI Leaders (2023)

Rank	Country	HDI Value
1	Iceland	0.972
2	Norway	0.970
2	Switzerland	0.970
4	Denmark	0.962
5	Germany	0.959
5	Sweden	0.959
7	Australia	0.958
8	Hong Kong (China SAR)	0.955
8	Netherlands	0.955
17	United States	0.938

3. Satluj Yamuna Link (SYL) Canal Dispute

Context:

The Supreme Court criticized Punjab’s decision to denotify land acquired for the Sutlej-Yamuna Link (SYL) canal project, calling it an act of “high-handedness”. The project stems from the 1981 water-sharing agreement among Punjab, Haryana, and Rajasthan, aiming to reallocate Ravi-Beas river waters in the national interest.

Satluj Yamuna Link (SYL) Canal Dispute: Historical Overview and Current Status

Overview of the SYL Canal Project

• Length: 214 kilometers (133 miles)
• Purpose: To connect the Sutlej and Yamuna rivers for sharing river waters
• States Involved: Punjab and Haryana
• Legal Status: Referred to the Supreme Court of India

Historical Context

• 1955 Agreement:
  • Involved states: Punjab, PEPSU, Rajasthan, Jammu & Kashmir
  • Division of 19.55 billion m³ of eastern Indus rivers (Ravi, Beas, Sutlej)
    • Punjab: 7.3 billion m³
    • PEPSU: 1.6 billion m³
    • Rajasthan: 9.9 billion m³
    • Jammu & Kashmir: 0.80 billion m³
  • Post-merger (1956), Punjab’s total: 8.9 billion m³
• 1960: Indus Water Treaty with Pakistan enabled India’s full use of eastern rivers

Legal and Tribunal Proceedings

• 1986: Ravi-Beas Waters Tribunal (Eradi Tribunal) formed
• 1987: Tribunal upheld prior agreements and revised allocations:
  • Punjab: 6.2 billion m³
  • Haryana: 4.72 billion m³
• Tribunal noted:
  • Haryana’s section was completed
  • Punjab’s portion remained incomplete
  • Urged speedy completion

Supreme Court Clarification and Warning

• The Bench clarified that the status quo applies only to land needed for constructing the main SYL canal, not Punjab’s internal water distribution network.
• Next hearing scheduled for August 13, if no resolution is found between the States and the Centre.
• The court urged both Punjab and Haryana to work with the Centre to reach an amicable solution.

TH

4. India Tightens Satellite Internet Rules

Context:

Starlink, owned by Elon Musk’s SpaceX, is still awaiting operational clearances in India. These include a unified licence (UL) and a GMPCS (Global Mobile Personal Communications by Satellite) authorisation, both necessary for providing satellite-based internet services.

New DoT Amendments

• The Department of Telecommunications (DoT) issued fresh amendments this week in response to heightened national security concerns, especially after the Pahalgam terror attack in Kashmir.
• These amendments mirror existing telecom surveillance mandates but extend them specifically to satellite service providers, including:
  • User traffic monitoring and interception
  • Location-based restrictions (geofencing)

Key New Requirements for Satellite Internet Providers

• Cross-border Usage Restrictions:
  • Satellite terminals purchased abroad must be disabled within India.
  • Indian-purchased terminals must be disabled outside Indian territory — a clause likely to impact the mobility appeal of Starlink.
• Local Manufacturing Mandate:
  • Satellite terminal devices must be manufactured in India within five years, aligning with the Make in India initiative.
• Enhanced Geofencing Requirements:
  • Aimed at preventing signal spillover in border regions.
  • Enables monitoring and lawful interception to address national security risks.

Implications

• The new rules reflect India’s focus on:
  • Digital sovereignty
  • National security
  • Technological self-reliance
• Starlink and similar players must adapt to a tighter regulatory and surveillance regime, even as demand for rural and remote internet access grows.

5. India to Launch ‘Sustainable Transport Mission’ Under National Action Plan for Climate Change (NAPCC)

Context:

The Government of India will soon introduce a new mission for “sustainable transport” under the National Action Plan for Climate Change (NAPCC). This marks the first new mission addition in over a decade and aims to tackle emissions from one of India’s most polluting sectors.

Key Focus Area

• The road transport sector will be central to this mission, as it:
  • Accounts for 12% of India’s energy-related CO₂ emissions.
  • Is the largest contributor to urban air pollution.
  • Will likely be the slowest transport mode to achieve carbon neutrality.
• Policy interventions will focus on:
  • Upgraded emission standards (e.g., introduction of BS-VII norms).
  • Greater adoption of electric vehicles (EVs) and alternative fuels.

Objective

• The mission is designed to decarbonise India’s transport sector and align with the country’s net-zero emission goals.
• It will bring India in line with global efforts by the European Union, select developed countries, and African nations pursuing similar sustainability missions.

Scope and Structure

• The mission will encompass multiple transport sub-sectors:
  • Road Transport
  • Railways
  • Ports
  • Shipping
  • Civil Aviation
• The Ministry of Road Transport and Highways (MoRTH) will act as the nodal agency for developing the policy framework.

Current Status and Planning

• MoRTH has been working on the mission for two years.
• The document is currently being updated with latest emissions data for 2030 and beyond.
• The apex climate committee will determine sectoral carbon reduction contributions.

TH & BS

6. ISRO Targets Early 2027 for Crewed Gaganyaan Launch

Why in News?

• ISRO Chairman V. Narayanan announced that the first Indian crewed space mission under Gaganyaan is now scheduled for Q1 2027.
• The original target was 2022, but the launch has faced multiple postponements.
• The crewed mission will be preceded by:
  • Three test flights: Two uncrewed missions and one robotic flight with Vyommitra.
  • A total of eight Gaganyaan missions (crewed and uncrewed) will take place until 2028.

Vyommitra and Uncrewed Mission

• The first uncrewed mission, with humanoid robot Vyommitra, is expected later in 2025.
• Nearly 90% of infrastructure and tests are complete.
• All propulsion systems for the human-rated GSLV Mk III launch vehicle are ready.

Axiom-4: India’s Private Space Milestone

• Indian astronaut Shubhanshu Shukla to fly aboard the Axiom-4 mission to the International Space Station (ISS).
• Launch expected in early June 2025 (Axiom reports May 29).
• India paid ₹550 crore to Axiom Space for this mission.
• Shukla’s mission will include scientific tasks and help build astronaut experience critical for Gaganyaan.

Strategic Importance

• Gaganyaan marks India’s entry into human spaceflight and builds indigenous capabilities.
• Missions like Axiom-4 provide global exposure and data for ISRO’s human spaceflight program.
• Vyommitra’s flight will serve as a key systems validation milestone.

TH

7. Sacred Buddhist Relics from Piprahwa

Context:

The Indian Ministry of Culture has issued a legal notice to Sotheby’s Hong Kong demanding the immediate halt of the planned auction of sacred Buddhist relics scheduled. Ivy Wong, Associate General Counsel at Sotheby’s, responded stating that the matter is receiving full attention from the auction house.

Piprahwa

Piprahwa is a village near Siddharthnagar city in Siddharthnagar district of the Indian state of Uttar Pradesh. Kalanamak rice, a scented and spicy variety of rice is grown in this area. It lies in the heart of the historical Buddha’s homeland and is 9 miles from the world heritage site of Lumbini that is believed to be the place of Gautama Buddha’s birth.

Historical and Spiritual Significance

• The relics were excavated in 1898 from Piprahwa Stupa, believed to be part of ancient Kapilavastu, the birthplace of Lord Buddha.
• Items include:
  • Bone fragments attributed to the Buddha
  • Soapstone and crystal caskets
  • A sandstone coffer
  • Gold ornaments and gemstones used as offerings
• An inscription in Brahmi script identifies the relics as belonging to the Buddha, deposited by the Sakya clan.

Legal and Cultural Claims

• The majority of relics were handed over to the Indian Museum in Kolkata in 1899 and are designated as Category ‘AA’ antiquities under Indian law, prohibiting sale or export.
• A portion of the relics was gifted to the King of Siam, while some were retained by Peppé’s descendants, a selection of which has now appeared in the Sotheby’s auction list.

TOI

8. Russian-Made SA-24 Igla-S Air Defense Systems

Overview of SA-24 Igla-S

• The SA-24 Igla-S is a third-generation, Russian-made MANPADS (Man-Portable Air Defense System).
• Key features:
  • Infrared-guided shoulder-fired missile
  • Maximum range: 6 km; altitude coverage: up to 3.5 km
  • Equipped with advanced seeker and proximity fuze
  • Resistant to jamming, highly mobile, and suitable for rugged terrain

Strategic Deployment in Northern India

• Indian Army units in Jammu & Kashmir have begun deploying the Igla-S to counter:
  • Low-flying UAVs
  • Helicopters and surveillance aircraft
  • Cross-border aerial threats
• The system’s portability makes it ideal for mountain warfare and rapid response scenarios

Strengthening India-Russia Defense Ties

• The Igla-S induction highlights continued Indo-Russian defense cooperation, despite:
  • Western pressure to limit military imports from Russia
  • Ongoing geopolitical tensions
• Russia supplies over 50% of India’s military imports, including tanks, fighter jets, and air defense systems

9. India’s First AI-Based Data Centre Park to Rise in Nava Raipur, Chhattisgarh

Project Overview

• Location: 14-acre site in Nava Raipur, Chhattisgarh’s new capital
• Developer: RackBank Datacenters Private Limited
• Key Milestone: Foundation laid by Chief Minister Vishnu Deo Sai on Saturday
• Significance: India’s first AI-integrated data centre park, poised to be a cornerstone of the country’s digital infrastructure

Infrastructure and Investment

• Includes 2.7 hectares under Special Economic Zone (SEZ)
• Phase 1 capacity: 5 megawatts; expandable up to 150 megawatts
• Estimated total investment: ₹2,000 crore
• Incorporates GPU-based high-end computing, live data streaming, and global-standard AI processing facilities

Technological and Sectoral Impact

• Supports key sectors:
  • Health tech
  • FinTech
  • Defence
  • Agritech and smart farming
  • Data analytics
• Designed as a green, energy-efficient and environmentally sustainable facility

Digital Inclusion and Social Impact

• Will enhance remote access to digital services including:
  • Education and healthcare in tribal and rural regions
  • Smart governance and faster public service delivery
• Supports farmers with:
  • AI-driven crop management
  • Precision weather forecasting
  • Improved agricultural yields

Broader Vision and Complementary Initiatives

• CM Sai termed it the “digital backbone for a new era of growth”
• Part of a broader tech ecosystem in the region:
  • State allotted 10 acres for NIELIT to promote technical education and digital literacy
• Aims to position Chhattisgarh as the “heartbeat of Digital India”

The Indian Express

Banking/Finance

1. RBI May Extend Call Money Market Hours to 7 PM

Context:

The Reserve Bank of India (RBI) proposes to extend call money market trading hours from 5 PM to 7 PM. The goal is to enhance interbank liquidity to meet the demands of 24×7 real-time payment systems.

What is the Call Money Market?

• A short-term interbank borrowing market where financial institutions lend to each other without collateral.
• Currently contributes just 2% of overnight market volumes, down from 13% in 2014–15.

• Definition: Call money refers to short-term loans—usually overnight or up to 14 days—offered in the inter-bank market.

• Types:
  • Call Money: Loans repayable within one day.
  • Notice Money: Loans with a maturity period of 2 to 14 days.

Purpose and Participants

• Primarily used by commercial banks to meet temporary liquidity requirements.
• Helps maintain the Cash Reserve Ratio (CRR) mandated by the Reserve Bank of India (RBI).
• Participants include commercial banks, cooperative banks, and in some cases, financial institutions.

Call Rate

• The interest rate charged on call money transactions.
• It is highly volatile, often changing daily or hourly, depending on market liquidity.
• Acts as an indicator of liquidity in the banking system.

Relationship with Other Money Market Instruments

• Call money rates have an inverse relationship with instruments like:
  • Certificates of Deposit (CDs)
  • Commercial Paper (CP)
• Higher call rates make CDs and CPs more attractive for banks seeking short-term funds.

Importance in Financial Markets

• Provides a flexible funding option for banks to manage short-term mismatches.
• Plays a crucial role in monetary transmission and liquidity management by the RBI.

Problem Statement: Liquidity Mismatch

• Banks borrow from RBI’s Liquidity Adjustment Facility (LAF) but park excess funds in the Standing Deposit Facility (SDF) due to mismatches.
• Despite overall systemic liquidity deficit, SDF balances remain high — a paradox in monetary operations.

Broader Implications

• Enhancing the call money market could:
  • Revive uncollateralised interbank lending
  • Reduce dependence on RBI liquidity windows (SDF/MSF)
  • Support real-time payment settlements after traditional banking hours

BS

3. India’s Digital Public Infrastructure

Digital Foundations: Aadhaar and UPI

• India leads globally in building digital public infrastructure (DPI) for governance.
• Platforms like Aadhaar and Unified Payments Interface (UPI) serve as horizontal digital rails enabling a range of services.
• Built on Aadhaar:
  • eKYC
  • eSign
  • DigiLocker
  • These services streamline banking, telecom, tax filing, and document storage.

PMWANI (Public WiFi Access)

• Conceptualized: 2015–16 by TRAI
• Cabinet approval: December 2020 after PMO intervention
• Still under-implemented despite surging demand for video-based education
• Could bridge the digital divide for students in low-income households

eRUPI: Targeted Digital Vouchers

• Launched: August 2, 2021
• Ensures benefit-specific fund usage (e.g., school bicycles, corporate incentives)
• Integrated into UPI; slow uptake limits its transformative potential

Ayushman Bharat Digital Mission (ABDM)

• Launched: September 2021
• Vision: Digital health records, diagnostic reports, affordable care
• Challenges:
  • Private sector resistance to data sharing
  • Implementation inertia
• Vast potential still underutilized

Key Issues Behind Delays

• Bureaucratic inertia
• Regulatory hesitation
• Institutional resistance to change
• Lack of urgency in policy execution

BS

4. RBI’s OMO Bond Purchase Draws Strong Demand

Context:

• The Reserve Bank of India (RBI) conducted open market operations (OMO) on Tuesday, inviting bond purchases worth ₹50,000 crore.
• Total bids received: ₹1.32 lakh crore, more than 2.6x oversubscription, indicating robust market demand.

Key Highlights

• Most bonds were priced at a premium over market rates, except the 2031-maturing paper, which traded at a discount.
• Bonds maturing between 3 to 14 years were included; ultra-long tenured bonds were excluded.
• The 7.10% GS 2034 bond saw maximum demand, as investors are offloading it to accommodate the new 10-year benchmark bond issued on May 2.

What Are OMOs?

• OMOs are a tool used by the Reserve Bank of India (RBI) to manage liquidity in the economy by buying and selling government securities (G-Secs) in the open market.
• These operations help the RBI achieve its monetary policy objectives such as controlling inflation, promoting economic growth, and stabilizing bond yields.

How OMOs Work?

• Selling G-Secs
  • When there is excess liquidity in the economy, the RBI sells G-Secs to absorb the excess cash, reducing the money supply.
• Buying G-Secs
  • When there is a liquidity shortage, the RBI buys G-Secs from the market, thereby injecting liquidity and increasing the money supply.

Why Are OMOs Important?

• Liquidity Management
  • OMOs help the RBI control the amount of liquidity in the financial system.
• Government Borrowing Costs
  • By keeping bond yields low, OMOs help reduce the government’s borrowing costs.
• Inflation Control
  • OMOs enable the RBI to regulate inflation by influencing the money supply in the economy.
• Smoothing Liquidity Conditions
  • OMOs help maintain stable liquidity conditions throughout the year, facilitating smoother functioning of the financial markets.

Overall, OMOs are crucial for the RBI to manage the economy’s liquidity effectively, ensuring stability in the financial system and helping achieve broader economic goals.

BS

5. Fino Payments Bank Prepares to Transition into a Small Finance Bank (SFB)

Context:

Fino Payments Bank is actively preparing to upgrade to a Small Finance Bank (SFB), having already applied for the licence with the Reserve Bank of India (RBI) in November 2024.

• The move is aimed at enhancing earnings potential, expanding into lending, and deepening ties with merchant partners and account holders.
• Payments banks, unlike SFBs, cannot lend and must park 75% of deposits in government securities, severely limiting income avenues.

Small Finance Banks (SFBs) in India: Role, Features, and Impact on Financial Inclusion

What Are Small Finance Banks?

• Small Finance Banks (SFBs) are RBI-regulated niche banks focused on financial inclusion.
• Aim to provide basic banking services to the unbanked and underserved segments, especially in rural and semi-urban India.

Background and Evolution

• Introduced in the 2014-15 Union Budget.
• RBI issued operational guidelines in November 2014.
• First 10 SFB licenses were granted in November 2015, including AU Small Finance Bank, Equitas, and Ujjivan.

Objectives of SFBs

• Promote financial inclusion by extending banking services to:
  • Small business units
  • Micro and small industries
  • Marginal farmers
  • Informal and unorganised sector workers
• Expand credit access in Tier-3 to Tier-6 towns and rural areas.

Key Features

• Regulated under the Banking Regulation Act, 1949 and RBI Act, 1934.
• Offer standard banking services: Savings/Current Accounts, Fixed Deposits (FDs), Recurring Deposits (RDs), and loans.
• Scheduled Bank Status upon fulfilling RBI criteria.
• 75% of Adjusted Net Bank Credit (ANBC) must be lent to priority sectors (agriculture, MSMEs, etc.).
• Minimum capital requirement: ₹200 crore.
• No subsidiaries allowed for non-banking financial activities.

Operations and Offerings

• Deposit Mobilization: Accept deposits from residents and NRIs.
• Credit Services: Offer loans for micro-enterprises, affordable housing, vehicle loans, and farm-related credit.
• Third-Party Distribution (with RBI nod): Insurance, mutual funds, pension products, forex services.
• Rural Penetration: At least 25% of branches must be in unbanked rural centres.

BS

6. Small Finance Banks vs Payments Banks

Both Small Finance Banks and Payments Banks are licensed and regulated by the Reserve Bank of India (RBI). They operate under specific RBI guidelines and are monitored for compliance with financial regulations.

Purpose

• Small Finance Banks (SFBs): Aim to provide full-fledged banking services to unserved and underserved populations, especially in rural and semi-urban areas.
• Payments Banks (PBs): Designed to offer low-risk, technology-driven banking solutions like savings accounts and remittances to low-income households and migrant workers.

Feature/Aspect	Small Finance Banks (SFBs)	Payments Banks (PBs)
Definition	Niche banks that serve underserved, unbanked populations with full banking services.	A new banking model offering limited banking services without credit risk.
Objective	Provide credit and deposit services to small business units, farmers, and unorganised sectors.	Provide small savings accounts and remittance/payment services to low-income groups and migrants.
Introduced By	RBI – 2015	RBI – Conceptualised in 2014; operational from 2016.
Capital Requirement	₹100 crore minimum paid-up capital	₹100 crore minimum paid-up capital
Credit Facilities	Can issue loans and credit facilities to target sectors	Cannot provide loans or issue credit cards
Time Deposits (FDs/RDs)	Allowed to accept Fixed and Recurring Deposits	Not allowed to accept time deposits
Operational Restrictions	No area restrictions on operations	Cannot set up subsidiaries for non-banking services
Services Offered	Full banking services including loans, deposits, remittances, debit cards	Savings accounts, mobile banking, debit cards, UPI, NEFT, IMPS, etc.
Priority Sector Lending (PSL)	Must allocate 75% of ANBC to PSL	No PSL requirement
First Bank Example	Capital Small Finance Bank – First SFB launched in 2016	Airtel Payments Bank – First PB licensed by RBI in 2016
FDI Policy	Foreign shareholding as per FDI norms for private sector banks	Same FDI rules apply
No. of Banks (as of Dec 2021)	11 Small Finance Banks	6 Payments Banks

List of 11 Small Finance Banks (SFBs):

• AU Small Finance Bank
• Capital SFB
• Fincare SFB
• Equitas SFB
• ESAF SFB
• Suryoday SFB
• Ujjivan SFB
• Utkarsh SFB
• North East SFB
• Jana SFB
• Shivalik SFB

List of 6 Payments Banks:

• Airtel Payments Bank
• India Post Payments Bank
• FINO Payments Bank
• Paytm Payments Bank
• Jio Payments Bank
• NSDL Payments Bank

7. Goldsikka Unveils AI-Powered Gold-Melting ATM in Hyderabad

Overview and Innovation

• Company: Hyderabad-based Goldsikka Ltd
• Innovation: India’s first AI-powered Gold-Melting ATM
• Functions:
  • Buy and sell gold
  • Deposit and melt gold jewellery
  • Test purity and value of deposited gold
  • Transfer gold’s value directly to customer’s bank account
  • Augmented Reality (AR) feature for virtual jewellery try-ons

Key Features

• Fully automated process — zero human interference
• Gold melting and purity testing integrated within ATM
• Real-time value calculation of pure gold
• KYC and verification:
  • Aadhaar and ID proof authentication
  • Photograph of depositor taken by ATM
• Security feature: Machine auto-reports to police if gold is linked to criminal activity

Transaction Timeline and Mechanism

• Entire process (deposit to fund transfer) takes approx. 30 minutes
• Customer receives real-time valuation and can approve or reject it
• On approval, money is transferred directly to customer’s bank account

Expansion and Market Presence

• Current Deployment:
  • 14 operational Gold ATMs across India
  • 3 installed in international markets
• Expansion Plan:
  • 100 Gold-Melting ATMs to be installed in India
  • Another 100 overseas, within a year
• Awaiting regulatory approval before full-scale launch of melting-enabled machines

Impact and Consumer Benefits

• Revolutionises gold transactions by merging AI, automation, and fintech
• Encourages transparency and trust in gold trading
• Provides a secure, real-time, and self-service option for gold monetisation
• AR feature adds a retail and e-commerce layer to physical gold ATMs

BL

8. India Lists First Mortgage-Backed Pass-Through Certificates (PTCs) on NSE

Context:

On 5th May 2025, Shri M. Nagaraju, Secretary, Department of Financial Services, Ministry of Finance, listed India’s first Mortgage-Backed PTCs on the National Stock Exchange (NSE). This marks a significant step in integrating India’s housing finance and debt capital markets.

What is a Pass-Through Certificate (PTC)?

• A Pass-Through Certificate (PTC) is a securitized debt instrument where investors receive cash flows (principal and interest) from a pool of underlying loans.
• Common in asset-backed securitization, PTCs improve liquidity and risk transfer.

Key Highlights of the Listed PTC Issue

• Structured by: RMBS Development Company Limited
• Total Issue Size: ₹1,000 crore
• No. of Certificates: 1,00,000 PTCs
• Face Value per PTC: ₹1,00,000
• Backing: Housing loans originated by LIC Housing Finance Limited
• Coupon Rate: 7.26% per annum
• Maturity: Approximately 20 years

Ratings, Format, and Trading

• Credit Ratings: Rated AAA(SO) by CRISIL and CARE Ratings
• Format: Issued in demat form
• Tradability: Listed and tradable on NSE, enabling secondary market transactions
• Coupon Discovery: Done via Electronic Book Provider (EBP) platform of NSE

Significance for Financial Markets

• Shri Nagaraju emphasized that Residential Mortgage-Backed Securities (RMBS) can:
  • Catalyze housing finance growth
  • Strengthen capital market participation in real estate finance
  • Promote long-term investment-grade debt instruments

Economy

1. India’s GDP Forecast for 2025 Cut to 6.3% by Moody’s

Moody’s Revised India Forecast (2025)

• India’s GDP growth forecast for 2025 has been lowered to 6.3% from 6.6% by Moody’s Ratings.
• Key reasons cited:
  • Policy uncertainty
  • Global trade tensions, particularly between the US and China
  • Geopolitical risks, including India-Pakistan tensions

Other Global Agencies Lower India’s Growth Outlook

• IMF revised India’s FY26 forecast to 6.2% (earlier: 6.5%)
• World Bank lowered India’s growth estimate to 6.3% (earlier: 6.7%)
• Moody’s forecasts India’s 2026 growth at 6.5%

Trade Tensions and Tariff Impact

• On April 2, the US imposed reciprocal tariffs, including a 26% duty on Indian imports
• A 90-day pause (till July 9) has been granted, but a 10% baseline tariff is already active
• Ongoing India-US trade talks:
  • US Treasury Secretary Scott Bessent stated the countries are “very close” to a trade deal
  • Negotiations have reportedly been relatively smooth

Global Growth Forecasts by Moody’s

Country	2025 Growth Forecast	Earlier Forecast
India	6.3%	6.6%
China	3.8%	4.5%
US	1.0%	2.0%

Broader Economic Implications

• Global trade and investment flows in G-20 nations are expected to slow down
• India’s growth outlook, while still among the highest globally, remains sensitive to external shocks and trade frictions
• A successful India-US trade agreement could mitigate some risks, restoring investor confidence and aiding exports

TET

Facts To Remember

1. Nationwide Civil Defence Drill Initiated Amid Heightened Security Concerns

Triggered by the April 22 terror attack in Pahalgam that killed 26 civilians, the drill aims to assess emergency response capabilities across the country. A nationwide civil defence preparedness drill is scheduled to begin on Wednesday, mandated by the Union Home Ministry.

2. IMF projects India to become fourth largest economy in ’25

The International Monetary Fund (IMF)’s April Outlook held that India would surpass Japan to become the fourth largest economy.

3. ‘Union Bank probing lapses in book procurement’

Union Bank of India has informed the stock exchanges that it is probing certain lapses in procurement of books by the bank for the purpose of gifting and supplying to its various branches.

4. Merz wins second vote to become German Chancellor

Friedrich Merz succeeded in his bid to become the next German Chancellor during a second vote in parliament, hours after he suffered a historic defeat in the first round. The conservative leader had been expected to smoothly win the vote to become Germany’s 10th Chancellor since the Second World War.

5. China’s Zhao scripts history at the Crucible Theatre

Zhao Xintong became the first Chinese player to win the World snooker championship as the qualifier completed his stunning march to the title with an 18-12 victory against Mark Williams in the final.

6. Sebi Gives Approval to Five IPOs

Laxmi India Finance, Jajoo Rashmi Refractories, Ajay Poly, Regal Resources and Veritas Finance — have received the Securities and Exchange Board of India’s approval to proceed with their initial public offerings (IPOs).

7. Farmers protest U.K. trade deal saying it’s a threat to agriculture and MSMEs

Farmers’ organisations have protested against the signing of the Free Trade Agreement between India and the United Kingdom, pointing out that the treaty was signed despite opposition from farmers, fish workers and cattle farmers.