News: China has decided to bring changes in the Basic Law. The Basic Law is the mini constitution that defines ties between Hong Kong and China.
- Background: Hong Kong was a British colony from 1841 until it was returned to China in 1997.
- Basic Law:
- It is a product of the 1984 Sino-British Joint Declaration
- It affirms the principle of “one country, two systems”.
- It gives Hong Kong judicial independence, its own legislature, its economic system and the Hong Kong dollar.
- China retains control of foreign and defense affairs, and visas or permits are required for travel between Hong Kong and the Chinese mainland.
- Proposed Changes to Basic Law: China seeks to insert a legislation in the Basic Law to ban “treason, secession, sedition and subversion”
News: The USA has announced that it will exit from the Open Skies Treaty
- Open Skies Treaty permits each state-party to conduct unarmed, reconnaissance flights over the others’ entire territories to collect data on military forces and activities.
- It was signed in 1992 and entered into force in 2002
- It has 35 member states.
Intermediate-Range Nuclear Forces (INF) treaty:
- It was signed by United States and the Soviet Union in 1987. USA exited from the treaty in 2019.
- The countries agreed to eliminate their stocks of intermediate-range and shorter-range land-based missiles (which could carry nuclear warheads).
New START (Strategic Arms Reduction Treaty): It is a nuclear arms reduction treaty between the United States and the Russian Federation.It was signed in 2010.
News: On the occasion of the International Day for Biological Diversity 2020, the Union Minister of Environment has launched key initiatives towards conservation of biodiversity.
Biodiversity Samrakshan Internship Programme:
- It was launched by the National Biodiversity Authority(NBA) and United Nations Development Programme (UNDP).
- Aim: To engage 20 students with postgraduate degrees for a period of one year to support the projects of NBA in various State/UTs and to technically assist the State Biodiversity Boards Biodiversity Council in discharge of their mandates.
Not all Animals Migrate by Choice Campaign:
- It was launched by the Wildlife Crime Control Bureau along with the United Nations Environment Programme(UNEP) against Illegal Trafficking of Endangered Species.
- Aim: To create awareness and garner public support for the protection and conservation of wildlife, prevention of smuggling and reduction in demand for wildlife products.
- Wildlife Crime Control Bureau: It is a statutory multi disciplinary body established by Government of India under the Ministry of Environment, Forests and Climate Change to combat organized wildlife crime in the country.
- National Biodiversity Authority(NBA): It was established in 2003 as a statutory autonomous body under the Ministry of Environment, Forests and climate change to implement the provisions under the Biological Diversity Act, 2002.
News: Reserve Bank of India(RBI) has announced several measures for strengthening the Economy in the uncertain times ushered in by the COVID-19 pandemic.
- Repo Rate: It is the rate at which the RBI lends money to the banks for a short term.It has been reduced by 40 basis points from 4.4% to 4.0%.
- Reverse Repo Rate: It is the short term borrowing rate at which RBI borrows money from banks.It has been reduced from 3.75% to 3.35%.
- Marginal Standing facility: It is a window for banks to borrow from the Reserve Bank of India in an emergency situation when interbank liquidity dries up completely.It has been reduced from 4.65% to 4.25%.
- Consolidated Sinking Fund: States have been allowed to borrow more from Consolidated Sinking Fund which is being maintained by state governments as a buffer for repayment of their liabilities.
- Extension of Moratorium on Loan Repayments: The lending institutions have been permitted to extend the moratorium (suspension) on term loan instalments by another three months till 31st August, 2020.
- A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and either a fixed or floating interest rate.
- Voluntary Retention Route(VRR): Rules have been relaxed under VRR which is an investment window provided by RBI to Foreign Portfolio Investors to provide easier rules in return for a commitment to make higher investments.
- Special Refinance Facility: RBI had announced a special refinance facility of ₹15,000 crore to SIDBI at RBI’s policy repo rate for a period of 90 days.This facility has now been extended by another 90 days.
- Export Credit: The maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks to exporters has been increased from the existing one year to 15 months for disbursements made up to July 31,2020.
- Line of Credit: A line of credit of ₹15,000 crore will be given to the EXIM Bank, for financing India’s foreign trade.The loan facility has been given for a period of 90 days, with a provision to extend it by one year.
- Import Payments: The time period for import payments against normal imports into India has been extended from six months to twelve months from the date of shipment.
- Maximum Credit: The maximum credit which banks can extend to a particular corporate group has been increased from 25% to 30% of the bank’s eligible capital base.
News: A Sonic boom (a loud sound) which was heard in Bengaluru was probably heard while the IAF aircraft was decelerating from supersonic to subsonic speed.
- Sonic Boom: It is the sound associated with the shock waves created whenever an object travels through the air faster than the speed of sound.
- It generates enormous amounts of sound energy, sounding similar to an explosion or a thunderclap to the human ear.
- Example: When an aircraft or other type of aerospace vehicle flies overhead faster than the speed of sound or supersonic.
News: The Central Government has released the Ninth Edition of the Status Paper on the Government Debt which provides a detailed analysis of the Overall Debt Position of the Government of India.
- The Central Government has been bringing-out a Status Paper on Government Debt since 2010-11.
- Central Government’s Debt as a percentage of Gross Domestic Product (GDP) has dropped marginally by 0.1% from 45.8% in fiscal 2017-18 to 45.7% in fiscal 2018-19.
- General government Debt to GDP ratio which includes the combined debt of the Centre and states declined by 0.1% from 68.7% in March 2018 to 68.6% in March,2019.
- Government’s finances were largely protected from currency risks as external debt stood at 2.7% of GDP or Rs 5.12 lakh crore in FY19
- Domestic Debt is around 94.1% of the Centre’s liabilities in FY19.Out of this, 84.4% of the domestic debt was made up of marketable securities.
- The tenure of the longest security was 37 years.
News: Union Cabinet has approved a Special Liquidity Scheme for Non-Banking Financial Companies(NBFCs) and Housing Finance Companies(HFCs) to improve liquidity position of the NBFCs/HFCs.
- The Scheme will be administered by the Department of Financial Services.
- Under the Scheme, a large public sector bank would set up a Special Purpose Vehicle(SPV) to manage a Stressed Asset Fund(SAF) whose securities would be guaranteed by the Government of India.
- The SPV would issue securities as per requirement subject to the total amount of securities not exceeding Rs. 30,000 crore.
- The securities issued by the SPV would be purchased by RBI only and proceeds thereof would be used by the SPV to acquire the debt of at least investment grade of short duration (residual maturity of upto 3 months) of eligible NBFCs / HFCs.
- Non-Banking Financial Company (NBFC): It is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares issued by Government or local authority or other marketable securities.
- However,it does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services of immovable property.
- Further, NBFCs lend and make investments just like banks.But there are a few differences as:
- NBFC cannot accept demand deposits;
- NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
- Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
- Housing Finance Company(HFC): It is a company registered under the Companies Act, 1956 which primarily transacts business of providing finance for housing whether directly or indirectly.