Q. 1. With respect to CAFRAL, consider the following statements:
- CAFRAL is a not-for-profit organisation
- CAFRAL stands for the Centre for Advanced Financial Research and Learning
- It was set by the Reserve Bank of India in 2011
- Recently, it released the India Finance Report 2023 (IFR 2023)
How many of the statements given above are true?
- (a) 1 and 2
- (b) 1, 2 and 3
- (c) 1, 2 and 4
- (d) All of the above
Ans: (d)
Source: Fintech can emerge as substitute for traditional banking, says RBI’s CAFRAL (Business Standard, November 7)
Explanation
- CAFRAL, established by the RBI in 2011, is a not-for-profit organisation focused on research and learning in the fields of banking and finance.
- The RBI recently launched CAFRAL’s first flagship publication, the India Finance Report 2023 (IFR 2023).
- The IFR 2023 provides valuable insights into India’s non-banking financial sector. It aids stakeholders, regulators, and policymakers in understanding and appreciating the sector’s unique strengths and opportunities.
- The report indicates a significant digital transformation in India due to the implementation of the India Stack. This has led to a rapid increase in digital and FinTech lending.
Q.2. Consider the following statements:
- NBFCs do not form part of the payment and settlement system
- NBFCs whose asset size is ₹ 500 cr are considered systemically important NBFCs.
- Reserve Bank of India regulates all financial companies
How many of the above statements are true/
- (a) Only 1
- (b) Only 2
- (c) 1 and 2
- (d) All of the above
Source: RBI
Explanation:
- NBFCs with an asset size of ₹ 500 cr or more according to their last audited balance sheet are deemed as systemically important.
- The activities of these NBFCs significantly influence the stability of the economy.
- Not all financial companies come under the regulation of the Reserve Bank.
- Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, stock-broking and sub-broking businesses, Venture Capital Fund Companies, Nidhi Companies, Insurance companies, and Chit Fund Companies are all types of NBFCs.
- However, these companies are exempted from registration under Section 45-IA of the RBI Act, 1934, but they must satisfy certain conditions.
- National Housing Bank regulates Housing Finance Companies.
- The Securities and Exchange Board of India supervises Merchant Bankers, Venture Capital Fund Companies, stock exchanges, stock brokers, and sub-brokers.
- Insurance companies are under the jurisdiction of the Insurance Regulatory and Development Authority.
- Chit Fund Companies are regulated by the respective State Governments.
- The Ministry of Corporate Affairs, Government of India, oversees Nidhi Companies.
- Certain financial companies are exempted from the Reserve Bank’s regulation to avoid duplicate regulation.
- Mortgage Guarantee Companies are recognised as Non-Banking Financial Companies as per Section 45 I(f)(iii) of the RBI Act, 1934.
- Core Investment Companies with assets less than ₹ 100 crore, and those with assets equal to or more than ₹ 100 crore but do not access public funds, are not required to register with the RBI.
- Types of Non-Banking Financial Companies (NBFCs) registered with the Reserve Bank of India (RBI) are classified based on certain criteria:
- Deposit and Non-Deposit accepting NBFCs, are categorised by the type of liabilities they undertake.
- Non-deposit-taking NBFCs are further divided into systemically important and other non-deposit holding entities, which are known as NBFC-NDSI and NBFC-ND, respectively.
- NBFCs are also grouped based on the activities they perform.
- Specifically, the different types of NBFCs include:
- Asset Finance Company (AFC)
- Investment Company (IC)
- Loan Company (LC)
- Infrastructure Finance Company (IFC)
- Systemically Important Core Investment Company (CIC-ND-SI)
- Infrastructure Debt Fund
- Non-Banking Financial Company – Micro Finance Institution (NBFC-MFI)
Context: Express Editorial, November 10 (Shadows of Risk)
Editorial Analysis
- India Finance Report reviews India’s non-bank financial companies sector, also known as the shadow banking sector.
- The sector has shown improvements in capital position, asset quality, and profitability after the liquidity crisis of 2028 and the Covid pandemic, according to the CAFRAL report.
- Despite the progress, the report also highlights emerging risks.
- It points out the increase in bank financing for NBFCs in recent years, raising concerns about systemic contagion and emphasising the need for tighter preventive measures.
- The report serves as a reminder of the importance of monitoring and managing potential risks in the financial sector to maintain stability.
- In addition to improving regulations and risk management practices, continuous evaluation and adaptation to changing market conditions are crucial.
Q.3. Consider the following statements:
- Euclid telescope was launched by the European Space Association (ESA) in July 2023
- Euclid’s mission is to create a 3D map of the universe, the first of its kind
- NASA’s James Webb Space telescope has created a low-resolution 3D map of the universe
How many of the above statements are true?
- (a) 1 and 2
- (b) Only 1
- (c) All of the above
- (d) Only 3
Ans: (a)
Source: A Light in The Sky (Express Editorial, November 10)
Explanation
- Euclid space telescope sends back first colour images of cosmos from ‘dark universe’ mission (HT, November 7)
- Explanation:
- The Euclid space telescope has started sending images from its “dark universe” mission.
- On November 7, astronomers praised the telescope’s ability to capture detailed color images of space.
- From its orbital location 1.5 million km from Earth, Euclid has made five observations so far.
- The European Space Agency, which launched the telescope in July, refers to Euclid as their “dark universe detective.”
- The telescope’s mission over the next six years includes analysing the shapes, distances, and movements of billions of galaxies across more than 10 billion light-years.
- The goal is to create the largest-ever 3D cosmic map to study dark matter and dark energy.
- The telescope has captured exceptional detail in a series of images, such as the Perseus Cluster with its 1,000 galaxies and an additional 100,000 distant galaxies in the background.
- Euclid has also observed the spiral galaxy IC 342, also known as “The Hidden Galaxy.”
- Galaxies and the universe structure depend on the relationship between dark matter and dark energy.
- Dark matter is a key part of galaxies.
- Dark energy is a mysterious force that speeds up the universe’s expansion.
- According to NASA, 68% of the universe is dark energy, and about 27% is dark matter.
- NASA’s James Webb Space telescope and ESA’s six-year Euclid mission both aim to unravel cosmic evolution mysteries.
- They are particularly set to investigate the universe’s expansion and the forces that structure and shape it.
- The first step in this process is to create a map of the dark universe’s origin story by observing galaxies across a wide sky section.
Q.4. With respect to Gwalior Gharana, consider the following statements:
- The Gwalior vocal gharana is widely regarded as the oldest gharana.
- It was founded in the first half of the 19th century.
- Gwalior Gharana is also one of the major gharanas of khayal
How many of the above statements are true?
- (a) Only 1
- (b) 1 and 2
- (c) All of the above
- (d) Only 3
Ans: (c)
Source: UNESCO declares Gwalio ‘city of music’: story of its melodious past (Indian Express, November 10)
Explanation:
- The term ‘Khayal’ is Persian, meaning “idea” or “imagination”.
- Its origins are credited to Amir Khusrau.
- Artists favour Khayal due to its flexibility for improvisation.
- It is based on a collection of short songs, between two to eight lines, often referred to as ‘Bandish’.
- Each Khayal piece is composed in a specific raga and tala and includes a short text.
- Common themes in texts are the extolling of kings, descriptions of seasons, Lord Krishna’s antics, divine love, and sorrow of separation.
- Notable khayal ‘gharanas’ include Gwalior, Kirana, Patiala, Agra, and Bhendibazaar Gharana.
- The Gwalior gharana is the oldest musical gharana and an important part of Hindustani classical music history.
- It grew under the supervision of Raja Man Singh Tomar in the 15th century.
- Dungrandra Singh Tomar, Man Singh’s great grandfather and a musician himself, tried to rejuvenate Indian classical music through academic interest and sponsorship.
- He composed Vishnupadas, songs praising Vishnu, in a unique singing style, which he passed onto Man Singh.
- It is speculated that Man Singh created dhrupad, a classical genre.
- Man Singh authored Manakutuhala, the first music treatise in Hindi.
- Before Hindustani classical music was segmented into different gharanas, Gwalior emerged as the initial proper gharana, evolving under Mughal rule.
- Early ustads of the gharana included Naththan Khan, Naththan Pir Baksh, and his grandsons Haddu, Hassu, and Natthu Khan.
- Khayal singing, as we understand it today, originated from dhrupad within the Gwalior gharana, integrating qawaali elements.
- Ustad Naththan Pir Baksh was among the first masters to formulate khayal.
- Mian Tansen, who was born Ramatanu to a poet and musician, was an early protégé of Gwalior.
Q. 5. Consider the following statements:
- Comprehensive National Security is Israel’s National Security Strategy
- India had a National Security Strategy for a brief period during 2002-2004 when Atal Bihari Vajpayee’s was India’s Prime Minister
- China and Pakistan, both countries have a national security strategy in place
How many of the above statements is/are true?
(a) Only 1
(b) Only 3
(c) All of the above
(d) None of the above
Ans: (b)
Source: India starts process to adopt National Security Strategy: Why this is significant (Indian Express, November 6, 2023)
Explanation
- A National Security Strategy (NSS) outlines a nation’s security goals and the methods to achieve them.
- The NSS is updated regularly and identifies traditional and non-traditional threats, as well as opportunities.
- It provides accountability for agencies responsible for various implementation tasks.
- The NSS guides the military and influences vital defence and security reforms.
- It gives an overview of national security, the threats it faces, and the plan to address those threats.
- India is in the process of creating its first NSS.
- Developed countries with advanced military and security infrastructure, like the US, UK, and Russia, already have an NSS, which they update regularly.
- China’s NSS, known as Comprehensive National Security, is closely aligned with its governance structure.
- Pakistan has also issued a National Security Policy for 2022-2026, detailing its national security goals and priorities.