(PRELIMS + MAINS FOCUS)
BANK INVESTMENT COMPANY (BIC)
Recently, the Ministry of Finance has given the idea of setting up Bank Investment Company (BIC) with the RBI raising concerns over the issuance of zero-coupon bonds for recapitalisation of public sector banks (PSBs).
- The P.J. Nayak Committee in its report on ‘Governance of Boards of Banks in India’ has recommended the setting up a BIC as a holding company or a core investment company
- The report recommended transferring shares of the government in the banks to the BIC which would become the parent holding company of all these banks and all the PSBs would become ‘limited’ banks.
- The idea of BIC was also discussed at the first Gyan Sangam bankers’ retreat organised in 2014.
- It was proposed that the holding company would look into the capital needs of banks and arrange funds for them without government support.
Recommendation of PJ Nayak Committee on Bank Investment Company (BIC)
- The Government should set up a Bank Investment Company (BIC) to hold equity stakes in banks which are presently held by the Government.
- BIC should be incorporated under the Companies Act, necessitating the repeal of statutes under which these banks are constituted.
- It will necessitate the transfer of powers from the Government to BIC through a suitable shareholder agreement and relevant memorandum and articles of association.
- The Bank Investment Company (BIC) would be constituted as a core investment company under RBI registration and regulation.
- It is also vital that the CEO of BIC is a professional banker or a private equity investment professional who has substantial experience of working in financial environments.
Benefits of Bank Investment Company (BIC)
- The BIC will be autonomous and it will have the power to appoint the board of directors and make other policy decisions about subsidiaries.
- The BIC will independently control all banks without government’s intervention.
- The BIC will help to ensure that government’s stake in these banks is strategically reduced to upto 51%.
- The BIC will also address the NPA problem of banks and help enhance functional autonomy of the banks.
- It will borrow funds from market to raise capital, which will then be infused into individual banks as per need.
Challenges in setting up Bank Investment Company (BIC)
- The establishment of BIC will take time due to slow moving government machinery and requirement to amend existing legal acts.
- The very nature of government, which results in banking operations getting interfered regularly by politicians, makes it tough for banks to conduct their businesses properly.
- It is still tough to gauge how successful government will be in ‘not interfering’ with the banks.
Source: The Hindu
Recently, the Department of Telecommunications (DoT) has sought inputs from telecom companies and other industry experts on the sale and use of radio frequency spectrum over the next 10 years, including the 5G (Fifth Generation) bands.
Features of 5G Technology:
- Millimeter wave spectrum: The 5G networks will operate in the millimeter wave spectrum (30-300 GHz) which have the advantage of sending large amounts of data at very high speeds because the frequency is so high, it experiences little interference from surrounding signals.
- Upgraded LTE: 5G is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
- Internet speed: In the high-band spectrum of 5G, internet speeds have been tested to be as high as 20 Gbps (gigabits per second) as compared to the maximum internet data speed in 4G recorded at 1 Gbps.
- Bands in 5G: 5G mainly work in 3 bands, namely low, mid and high frequency spectrum — all of which have their own uses as well as limitations.
- Low band spectrum: It has shown great promise in terms of coverage and speed of internet and data exchange however the maximum speed is limited to 100 Mbps (Megabits per second).
- Mid-band spectrum: It offers higher speeds compared to the low band, but has limitations in terms of coverage area and penetration of signals.
- High-band spectrum: It has the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
Hurdles in Rolling Out 5G Technology:
- Enabling critical infrastructures: 5G will require a fundamental change to the core architecture of the communication system. The major flaw of data transfer using 5G is that it can’t carry data over longer distances. Hence, even 5G technology needs to be augmented to enable infrastructure.
- Financial liability on consumers: For transition from 4G to 5G technology, one has to upgrade to the latest cellular technology, thereby creating financial liability on consumers.
- Capital Inadequacy: Lack of flow of cash and adequate capital with the suitable telecom companies (like Bharti Airtel and Vodafone Idea) is delaying the 5G spectrum allocation.
Utility of 5G Applications: Combined with IoT, cloud, big data, AI, and edge computing, 5G could be a critical enabler of the fourth industrial revolution.
- For India: 5G networks could improve the accessibility of services such as mobile banking and healthcare, and enable exponential growth in opportunities for unemployed or underemployed people to engage in fulfilling and productive work. For this Government has rolled out enabling policies.
5G Enabling Policy:
- India’s National Digital Communications Policy 2018 highlights the importance of 5G when it states that the convergence of a cluster of revolutionary technologies including 5G, the cloud, Internet of Things (IoT) and data analytics, along with a growing start-up community, promise to accelerate and deepen its digital engagement, opening up a new horizon of opportunities.
- It aims to reach 100% teledensity, high-speed internet highways and delivery of citizen-centric services electronically.
Global Progress on 5G:
- Global telecom companies have already started building 5G networks and rolling it out to their customers in many countries:
- 5G had been deployed in 50 cities in the United States.
- South Korea has rolled out 5G to 85 cities.
- Japan and China have too started 5G mobile service on a trial basis.
Source : IE
Prime Minister Narendra Modi flagged off eight trains from different parts of the country to Kevadia in Narmada district. Out of these eight trains, the Janshatabdi Express from Ahmedabad-Kevadia has a Vistadome coach.
- The Vistadome coach is a state-of-the-art coach made by Indian Railways, designed to provide passengers with travel comfort as well as an enhanced viewing experience of their surroundings.
- The Vistadome coach in the Janshatabdi Express has been manufactured at the Integral Coach Factory in Chennai, Tamil Nadu.
- It is for the first time that the Vistadome coach has been made on the Linke Hofmann Busch (LHB) platform, made for passenger coaches for trains in India.
- Some of the features of the Vistadome coach are an observation lounge with a large window for passengers to experience the scenic route to Kevadia.
- The 44 recliner-180 degree rotatable seats ensure people can enjoy the view from both windows to their right and left, there are automatic sliding doors at both gates of the coach, glass rooftops offer a panoramic view, while there are five large windows on each side.
Source : Indian Express
Recently, the winter migratory water birds using the Central Asian Flyway have started making a beeline to Punjab’s Harike wetland.
- The birds such as the Eurasian coot, Greylag goose, Bar-headed goose, Gadwall and the northern shoveler are the prominent ones that could be sighted at Harike.
- In 2020, the count at Harike was recorded at 91,025 which is a drop of around 32,000 birds compared to 2019.
- The number of species such as Northern Lapwing, Pacific Golden Plover, Black-bellied Tern and Cotton Pygmy Goose species has been reducing over the years.
About Harike Wetland
- The Harike wetland, one of the largest in northern India, is situated in Tarn Taran district of Punjab.
- It came into existence in 1952 after the construction of barrage near the confluence of rivers Sutlej and Beas.
- It stands on the confluence of the Beas and the Sutlej.
- It is home to birds visiting from as far as the Arctic and Siberia.
- Harike is one of the largest man-made wetlands of northern India.
- It was accorded the wetland status in 1990 by the Ramsar Convention.
Source: The Hindu
RUSSIA PULLS OUT OF OPEN SKIES TREATY
Recently, Russia pulled out of the Open Skies Treaty (OST) citing earlier withdrawal of the USA from the treaty.
- According to Russia, provisions of the pact that allows unarmed surveillance flights over member countries had been seriously compromised by the withdrawal of the United States.
- This move was made after the USA pulled out of the Open Skies Treaty in November 2020, arguing that Russian violations made it untenable for the United States to remain a party.
Reasons for USA Withdrawal:
- Russia’s continuous non compliance: The USA had for over a decade accused Russia of non-compliance with OST protocols, blaming Moscow of obstructing surveillance flights on its territory, while misusing its own missions for gathering key tactical data.
- OST misused to claim Ukrainian region: The USA also accused Russia of designating an airfield in the annexed Crimean Peninsula as an Open Skies refueling base as an illegal attempt by Russia to cement its claim to the Ukrainian region.
- Risk to critical infrastructures: Russia misused its flights over the USA and Europe to identify critical infrastructure for potential attack in a time of war.
Reasons for Russia Withdrawal:
- USA limiting OST: Russia defends its non-compliance with the OST to allow flights over Kaliningrad (Russian exclave in Eastern Europe that lies between NATO allies Lithuania and Poland) citing the example of the US imposing similar limits on flights over Alaska.
- No assurance from NATO members: After USA withdrawal from OST, Russia did not get the sought assurance from North Atlantic Treaty Organization (NATO) allies who continued to remain on the treaty that they would not transfer data collected by their flights over Russia to Washington (USA).
- For European NATO members:
- Russia’s departure could adversely impact Washington’s European allies, which rely on OST data to track Russian troop movements in the Baltic region.
- Departure from Arms control treaties:
- The failure of the Open Skies Treaty follows the demise of another significant arms control accord, the Intermediate-Range Nuclear Forces (INF) Treaty, after both the US and Russia left it in 2019. This treaty aimed at eliminating their stocks of intermediate-range and shorter-range (or “medium-range”) land-based missiles which could carry nuclear warheads.
- Withdrawal of the USA and Russia from OST has further deepened doubts on extension of the New START treaty, which expires in February, 2021.
- For India:
- Growing mistrust between global powers could make it difficult for India to maintain good mutual relationships with both the countries if the hostility escalates in future.
FLINT WATER CRISIS
Nine former officials who served the state of Michigan in the US, including the state’s former governor Rick Snyder, were charged in connection with a criminal investigation into the Flint water crisis.
- The Flint water crisis is an ongoing public health crisis that began in 2014 when the City of Flint in Michigan changed its water supply from Lake Huron to the Flint river.
- This switch caused the water distribution pipes to corrode, as a result of which lead and other contaminants were leached into the municipal drinking water.
- This led to an outbreak of Legionnaires’ disease, a serious type of pneumonia caused by the Legionella bacteria and other health complications in thousands of its residents.
- According to the US Centers for Disease Control and Prevention (CDC), people can get sick from this if they breathe in mist or accidentally swallow bacteria-containing water into the lungs.
- While the water supply was switched back in 2015, the damage was long-lasting and many residents of the city continued to suffer.
Source : Indian Express