TOPIC : GS 3 Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Patchwork progress
What is the news?
The Government hopes changes to the 1961 Deposit Insurance and Credit Guarantee Corporation law after he Cabinet nod this week.
Various Provisions
- Savers’ perspective, the most signifcant modification on the is a 90- day deadline for the Corporation to remit the insured deposits of customers in troubled banks.
- Once the RBI imposes curbs on a bank, by the 91st day or thereabouts, account holders will get their outstanding balance back with a cap of 5 lakh.
- This indicate that this would apply to cases of lenders already under a moratorium.
Case Laws
- In the last two years, Yes Bank, Lakshmi Vilas Bank and the PMC Bank, have faced such a bar on depositors seeking to withdraw.
- PMC Bank accounts still face such curbs, even as savings parked in other co-operative lenders that have gone under continue to elude their rightful owners.
- It normally takes eight to 10 years for insured deposits to be forked out, from the time a bank hits a hurdle and myriad conditions are imposed on withdrawals.
- These delays were well-known last year too, when the insured deposit amount was raised to 5 lakh from 1 lakh laid down in 1993.
- Making incremental changes in quick succession suggests a unsystematic approach to governance rather than a system-wide view
- Even though the government stressed it has been working ‘overtime’ to resolve the PMC Bank crisis.
- Rising distress in households and the downward momentum in savings levels due to the pandemic, this change must be allowed to make
RBI data over the issue
- As per RBI data, 21 lakh crore or almost 51% of deposits are now insured, but 98.3% of all accounts have balances of 5 lakh or less so they are fully insured.
- This can be a source of renewed comfort for people in the banking system, grappling with bad loans, dwindling deposits and a still-fedgling insolvency framework.
- It is important for financial stability that people feel it is safer to park their money in a bank than it under a household.
- For several people with limited financial literacy and access to retirement savings instruments, with lifetime earnings possibly over 5 lakh parked in a Neighbourhood co-operative bank, this would still be a less than perfect outcome.
Way Forward
- The RBI needs to up its oversight game, and the Centre, which has recently made the Department of Cooperation a full-scale ministry, needs to allow it to do so.
- Moreover, just as the latest amendments have an enabling provision to raise the premium paid by banks to the DICGC in future
- There should have been one to raise the insured deposit limit in line with inflation and per capita income trends.
Mains Questions
Explain the move to hasten insured bank deposits’ repayment need not have taken this long ?
PRELIMS PUNCHERS
- The Yamuna
It is the second-largest tributary river of the Ganga and the longest tributary in India. Originating from the Yamunotri Glacier on the southwestern slopes of Banderpooch peaks of the Lower Himalaya in Uttarakhand, drains 40.2% of the entire Ganga Basin. It merges with the Ganga at Triveni Sangam, Allahabad, which is a site of the KumbhaMela, a Hindu festival held every 12 years
It crosses several states: Haryana and Uttar Pradesh, Uttarakhand and later Delhi, and meeting its tributaries on the way, including Tons, Chambal, its longest tributary which has its own large basin, followed by Sindh, the Betwa, and Ken. From Uttarakhand, the river flows into the state of Himachal Pradesh. After passing Paonta Sahib, Yamuna flows along the boundary of Haryana and Uttar Pradesh and after exiting Haryana it continues to flow till it merges with the river Ganga at Sangam or Prayag in Allahbad (Uttar Pradesh). It helps create the highly fertile alluvial Yamuna-Ganga Doab region between itself and the Ganga in the Indo-Gangetic plain
- SHe-Box
It is an initiative of Government of India to provide a single window access to every woman, irrespective of her work status, whether working in organised or unorganised, private or public sector, to facilitate the registration of complaint related to sexual harassment at workplace. Any woman facing sexual harassment at workplace can register her complaint through this portal. This SHe-Box is in addition to all the existing mechanisms established in India by the Government and as provided under the law.
The Ministry of Women and Child Development (WCD) has launched an online platform to enable women employees working in both the public and private organisations to file complaints related to sexual harassment at the workplace. The complaint management system has been developed to ensure the effective implementation of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act (the SH Act), 2013.
- The World Gold Council
It is the market development organisation for the gold industry. It works across all parts of the industry, from gold mining to investment, and their aim is to stimulate and sustain demand for gold. They frequently publish research that demonstrates gold’s strength as a preserver of wealth – both for investors and countries. They also provide analysis of the industry, offering insights into the drivers of gold demand. They have also launched various products such as SPDR GLD and gold accumulation plans in India and China.
The World Gold Council is an association whose members comprise the world’s leading gold mining companies. It helps to support its members to mine in a responsible way and developed the Conflict Free Gold Standard. Headquartered in London, United Kingdom, they have offices in India, China, Singapore and the United States. David Harquail became new president.
- The Siachen Glacier
It lies immediately south of the great drainage divide that separates the Eurasian Plate from the Indian subcontinent in the extensively glaciated portion of the Karakoram sometimes called the “Third Pole”. The glacier lies between the Saltoro Ridge immediately to the west and the main Karakoram range to the east. The Saltoro Ridge originates in the north from the Sia Kangri peak on the China border in the Karakoram range.
The major passes on this ridge are, from north to south, Sia La, Bilafond La , and Gyong La . The glacier’s melting waters are the main source of the Nubra River in the Indian region of Ladakh, which drains into the Shyok River. The Shyok in turn joins the long Indus River which flows through Pakistan. Thus, the glacier is a major source of the Indus and feeds the largest irrigation system in the world
Prelims Questions
- Consider the following statement with regard to Yamuna
- It is the first -largest tributary river of the Ganga
- Betwa, its longest tributary which has its own large basin
Select the correct statement using code given below.
(a). 1only (b) 2 only
(c).Both (d). None of above
Answer: D
It is the second-largest tributary river of the Ganga and the longest tributary in India. Originating from the Yamunotri Glacier on the southwestern slopes of Banderpooch peaks of the Lower Himalaya in Uttarakhand, drains 40.2% of the entire Ganga Basin. It merges with the Ganga at Triveni Sangam, Allahabad, which is a site of the KumbhaMela, a Hindu festival held every 12 years
It crosses several states: Haryana and Uttar Pradesh, Uttarakhand and later Delhi, and meeting its tributaries on the way, including Tons, Chambal, its longest tributary which has its own large basin, followed by Sindh, the Betwa, and Ken. From Uttarakhand, the river flows into the state of Himachal Pradesh. After passing Paonta Sahib, Yamuna flows along the boundary of Haryana and Uttar Pradesh and after exiting Haryana it continues to flow till it merges with the river Ganga at Sangam or Prayag in Allahbad (Uttar Pradesh). It helps create the highly fertile alluvial Yamuna-Ganga Doab region between itself and the Ganga in the Indo-Gangetic plain
- Consider the following statement with regard to The Siachen Glacier
- The glacier’s melting waters are the main source of the shyok River
- The glacier lies between the Saltoro Ridge and the main Karakoram range
Select the correct statement using code given below.
(a). 1only (b) 2 only
(c).Both (d). None of above
Answer: B
It lies immediately south of the great drainage divide that separates the Eurasian Plate from the Indian subcontinent in the extensively glaciated portion of the Karakoram sometimes called the “Third Pole”. The glacier lies between the Saltoro Ridge immediately to the west and the main Karakoram range to the east. The Saltoro Ridge originates in the north from the Sia Kangri peak on the China border in the Karakoram range.
The major passes on this ridge are, from north to south, Sia La, Bilafond La , and Gyong La . The glacier’s melting waters are the main source of the Nubra River in the Indian region of Ladakh, which drains into the Shyok River. The Shyok in turn joins the long Indus River which flows through Pakistan. Thus, the glacier is a major source of the Indus and feeds the largest irrigation system in the world