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Current Affairs – 6 July 2021

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Current Affairs (6th July 2021)

Financial Stability Report (or FSR)


  • Recently, the Reserve Bank of India released its latest Financial Stability Report (or FSR).

Key Findings:

  • Capital Adequacy Ratio: 
    • The capital to risk-weighted assets ratio (CRAR) of scheduled commercial banks (SCBs) increased to 16.03 per cent and the provisioning coverage ratio (PCR) stood at 68.86 per cent in March 2021.
  • Non Performing Asset: 
    • Macro stress tests indicate that the gross non-performing asset (GNPA) ratio of SCBs may increase from 7.48 per cent in March 2021 to 9.80 per cent by March 2022 under the baseline scenario; and to 11.22 per cent under a severe stress scenario, although SCBs have sufficient capital, both at the aggregate and individual level, even under stress.
    • A kind of regulatory moratorium was announced, resulting in reduced NPAs.
  • Credit Demand: 
    • Going forward, as banks respond to credit demand in a recovering economy, they will need to reinforce their capital and liquidity positions to fortify themselves against potential balance sheet stress.
    • Demand for consumer credit across banks and non-banking financial companies (NBFCs) has decreased amidst the second wave of Covid-19.
  • Retail loans and loans to MSME:
    • NPA levels and quality of credit might deteriorate in this sector.
    • Consumer loan climate will get affected by this.
  • Nurturing the global recovery: 
    • Sustained policy support, benign financial conditions and the gathering momentum of vaccination are nurturing an uneven global recovery.
  • Covid 19: 
    • On the domestic front, the ferocity of the second wave of COVID-19 has dented economic activity, but monetary, regulatory, and fiscal policy measures have helped curtail the solvency risk of financial entities, stabilise markets, and maintain financial stability.
    • Write-offs as a percentage of GNPA at the beginning of the year, fell sharply as compared to 2019-20, except for private banks.
  • RBIs Protection:
    • Banks remain relatively unaffected by distractions caused due to the pandemic and are well protected by regulatory, monetary, and fiscal policies.


  • The report helps in assessing the health of the financial systems of the economy.
  • Assessing it biannually works as a check and balance in the working of the economy.
  • It helps as an Early Warning System in case of any financial issues.
  • Coming from the Central Bank, it is reliable, and the growth or fallouts can be trusted.
  • Making the fallouts in the Report as points to work on will give the country a direction towards growth.

About FSR:

  • FSR is Published twice each year and is one of the most crucial documents on the Indian economy.
  • It reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of the financial system in the context of contemporaneous issues relating to development and regulation of the financial sector.
  • It focuses on public and private banks with the following aspects:
    • Capital availability for working.
    • Cost of NPAs and whether they are manageable.
    • Credit flow in different sectors of the economy
    • Credit flow at personal levels (households)
    • Macro-financial risks in the economy
    • Macro-financial risks refer to the risks that originate from the financial system but affect the wider economy as well as risks to the financial system that originate in the wider economy.
    • Stress tests are also performed by RBI as part of FSR.


Implementation of SalwaJudum judgment


  • The SalwaJudum judgment was delivered 10 years ago, but it has not been effectively implemented by the government. The tribals are still facing many hardships and there has been no prosecution of security forces for human rights violations.


  • The Supreme Court (SC) delivered a historic judgment on 5th July 2011 in Nandini Sundar and others versus the State of Chhattisgarh case.
  • The judgment was aimed to curb the misuse of power by the government and protect tribal rights.

About the Judgment:

  • The court banned SalwaJudum. It was a vigilante movement started in 2005 and sponsored by the Chhattisgarh and Central government. The movement ostensibly aimed to fight against the Maoists.
  • The judges also ruled that the use of surrendered Maoists and untrained villagers in frontline counter-insurgency operations as Special Police Officers (SPOs) was unconstitutional.
    • It directed that the existing SPOs be redeployed in traffic management or other such safe duties.
  • Other matters like prosecution of security forces for human rights violations, and rehabilitation of villagers who had suffered violence, were left pending. The State had been asked to submit comprehensive plans for this.

Situation before the judgement:

  • At its peak between 2005 and 2007, the Judum involved forcing villagers into government-controlled camps.
  • Those who refused were punished by having their villages burnt. Hundreds of people were killed, and their deaths were not even recorded as ‘encounters’.
  • Villagers fled to neighbouring States or into the forests around their villages. Sangham members (active but unarmed Maoist sympathisers) were either jailed or compelled to join the security forces as SPOs.

Implementation of judgment by the state:

  • Ten years on, nothing has been done to implement the judgment. Instead, the State government has merely renamed the SPOs. They are now known as the District Reserve Guard (DRG).
  • Most DRGs are captured or surrendered Maoists and are given automatic weaponry as soon as they join the police force. Some of them get one-three months of training, and some not even that.
  • They commit excesses against their former fellow villagers, suffer the most casualties in any operation. However, they are paid much less than the regular constabulary. Due to this apprehension, judges had outlawed their use.

Situation after the judgment:

  • Today, the Judum camps are virtually empty with only the former SPOs and their families, staying in now permanent houses. Villagers split between those who went to the camp and those who went to the forest are now reconciled.
  • People have come back and started cultivation. An entire generation has grown up and across the region, villagers are demanding schools and health centres. Instead, what they have got in abundance are CRPF camps.
    • These have come up at intervals of less than 5 km, and roads are being bulldozed through what were once dense forests.
  • The security forces have vacated the schools as per SC directive. However, they undertook a larger takeover of public land and private fields.
  • No steps have been taken to prosecute government officials or security forces for their atrocities on tribals. For instance, CBI filed a charge sheet in 2011 against security forces for burning tribal villages, but they were not punished.
  • The innocent villagers are still arrested as suspected Maoists and spend long years in jail before their acquittal. This was even evident during the pandemic times.
  • Deaths in encounters between jawans and Maoists periodically hit the national headlines. But extrajudicial killings of villagers and Maoists and killings of suspected informers by Maoists continue at a steady pace, rarely hitting any high publicity note.

Way Ahead:

  • T.R. Andhyarujina and Ashok Desai, the lawyers who argued for the villagers pro bono in the Supreme Court, have passed away. Similarly, many other activists have died, are in jail facing contested charges or have given hope of a sustainable solution.
  • Unless both sides get serious about peace talks, another 10 years will pass. The 2011 Supreme Court judgment will be rendered even more meaningless, as will the idea of justice or the rule of law ever being possible in this land.


Bangladeshi nationals


  • Eight Bangladeshi nationals arrested in Andhra Pradesh with fake documents have admitted that several of their countrymen had entered Indian territory along with them.


  • Investigation officers suspect that many Bangladeshis are secretively staying in Kolkata, New Delhi, Bengaluru, Chennai, Hyderabad, Goa, and other cities.


  • Due to poverty, many Bangladeshis are entering India illegally by road in search of work.
  • India has been witnessing immigration since independence. However, illegal migration is the most contentious issue because:
  • There are no authentic official statistics to ascertain the actual number of illegal migrants.
  • Many such Bangladeshis are lured by terrorists and are helping banned organisations in creating unrest in India.
  • Illegal immigration from Bangladesh into Assam has also had serious socio-political implications.
  • India’s borders with Bangladesh being porous pose a challenge to its effective management.
  • India does not currently have a national law on refugees.

Geneva Convention (1951)

  • The Convention Relating to the Status of Refugees, also known as the Geneva Convention (1951) is a United Nations multilateral treaty.
  • It defines who a refugee is and sets out the rights of individuals who are granted asylum and the responsibilities of nations that grant asylum.
  • India is not a signatory of the UN Refugee Convention, 1951 and the protocol of 1967.

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