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UPSC Online News Analysis


Context: ‘Raise private bank promoter cap to 26%’ – RBI panel moots allowing large corporates to start private banks after amending bank regulation law.

Topic in the syllabus: Prelims – Economy | Mains – Indian economy (GS-3)

About Internal Working Group of the Reserve Bank of India:

  • RBI has constituted an Internal Working Group (IWG) to review the extant guidelines on ownership and corporate structure for Indian private sector banks.
  • What was the necessity? – As macroeconomic, financial market and technological developments continue to influence the future of banking and transform how the entire banking industry operates, it is felt necessary to align regulations to meet the requirements of a dynamic banking landscape.
  • The Terms of Reference of the Committee are given below:
    • To review the extant licensing guidelines and regulations relating to ownership and control in Indian private sector banks and suggest appropriate norms, keeping in mind the issue of excessive concentration of ownership and control, and having regard to international practices as well as domestic requirements;
    • To examine and review the eligibility criteria for individuals/ entities to apply for banking license and make recommendations on all related issues;
    • To study the current regulations on holding of financial subsidiaries through non-operative financial holding company (NOFHC) and suggest the manner of migrating all banks to a uniform regulation in the matter, including providing a transition path;
    • To examine and review the norms for promoter shareholding at the initial/licensing stage and subsequently, along with the timelines for dilution of the shareholding; and,
    • To identify any other issue germane to the subject matter and make recommendations thereon.

Recent recommendations by IWG:

  • It has recommended raising the cap on promoters’ stake in private sector banks to 26% in the long run (15 years). The holding is currently mandated at 15% of the paid-up voting equity share capital of the bank.
  • Large corporate or industrial houses be allowed as promoters of banks only after necessary amendments to the Banking Regulation Act, 1949 (to prevent connected lending and exposures between the banks and other financial and non­financial group entities).
  • Strengthening of the supervisory mechanism for large conglomerates, including consolidated supervision.
  • Well-run non­banking financial companies (NBFCs), with an asset size of ₹50,000 crores and above, including those owned by a corporate house, may be considered for conversion into banks subject to completion of 10 years of operations.
  • As regards non promoter shareholding, it has suggested a uniform cap of 15% of the paid up voting equity share capital of the bank for all types of shareholders.
  • The panel also recommended that for Payments Banks intending to convert to a Small Finance Bank (SFB), their track record of three years should be considered sufficient.
  • Small Finance Banks and Payments Banks may be listed within ‘6 years from the date of reaching net worth equivalent to prevalent entry capital requirement prescribed for universal banks’ or ‘10 years from the date of commencement of operations’, whichever is earlier.
  • The minimum initial capital requirement for licensing new banks be enhanced from ₹500 crore to ₹1,000 crore for universal banks, and be raised to ₹300 crore from ₹200 crore for SFBs.


Context: Digital health mission ready for nationwide roll-out soon

Topic in the syllabus: Prelims – Schemes

About The National digital health mission:

  • The Ministry of Health and Family Welfare, Government of India has formulated the National Digital Health Mission (NDHM) with the aim to provide the necessary support for integration of digital health infrastructure in the country.
  • Its vision is to create a national digital health ecosystem that supports universal health coverage in an efficient, accessible, inclusive, affordable, timely and safe manner and a seamless online platform.
  • Components:
  • Health ID: Health ID will be used to uniquely identify persons, authenticate them, and threading their health records (only with the informed consent of the patient) across multiple systems and stakeholders. Health ID is created by using basic details and mobile number or Aadhaar number and it will be unique to a person. Health ID can be obtained with the support of healthcare provider who is in the national health infrastructure registry or it can be obtained by self-registration from a mobile or a web application.
  • Digi-Doctor: It is a comprehensive repository of all doctors practicing or teaching modern/ traditional systems of medicine. Enrolling on Digi-Doctor is completely voluntary and enables doctors to get connected to India’s digital health ecosystem.
  • Health Facility Registry (HFR): It is a comprehensive repository of health facilities of the country across different systems of medicine. It includes both public and private health facilities including hospitals, clinics, diagnostic laboratories and imaging centers, pharmacies, etc.
  • Personal Health Records (PHR): PHR is an electronic record of health-related information of an individual that conforms to nationally recognized interoperability standards and that can be drawn from multiple sources while being managed, shared, and controlled by the individual.
  • Electronic Medical Records: EMR is a digital version of a patient’s treatment history from a single facility. The health information recorded in a facility is stored locally at the facility where the patient was registered. The patient’s clinical information will be linked to their Health ID. The clinical information can further be shared with other healthcare facilities after the patient provides consent.


Context: The Comptroller and Auditor General of India, Girish Chandra Murmu, has been elected External Auditor of Inter Parliamentary Union, Geneva, for a three-year term.

Topic in the syllabus: Prelims – Polity, International organisation.

About CAG:

  • The Comptroller and Auditor General (CAG) of India is the Constitutional Authority in India , established under Article 148 of the Constitution of India.
  • He is empowered to Audit all receipts and expenditure of the Government of India and the State Governments, including those of autonomous bodies and corporations substantially financed by the Government.
  • The CAG is also the statutory auditor of Government-owned corporations and conducts supplementary audit of government companies in which the Government has an equity share of at least 51 per cent or subsidiary companies of existing government companies.
  • The reports of the CAG are laid before the Parliament/Legislatures and are being taken up for discussion by the Public Accounts Committees (PACs) and Committees on Public Undertakings (COPUs), which are special committees in the Parliament of India and the state legislatures.
  • Article 148 – 151 of the Constitution of India deal with the institution of the CAG of India.
  • The CAG is ranked 9th and enjoys the same status as a sitting judge of Supreme Court of India in order of precedence.
  • The CAG can be removed only on an address from both houses of parliament on the ground of proved misbehaviour or incapacity. The CAG vacates the office on attaining the age of 65 years or 6 year term, whichever is earlier or by impeachment process.
  • Duties of the CAG: the audit of the following
  • Receipts and expenditure from the Consolidated Fund of India and of the State and Union Territory having legislative assembly.
  • Trading, manufacturing, profit and loss accounts and balance sheets, and other subsidiary accounts kept in any Government department; Accounts of stores and stock kept in Government offices or departments.
  • Government companies as per the provisions of the Companies Act, 2013.
  • Corporations established by or under laws made by Parliament in accordance with the provisions of the respective legislation.
  • Authorities and bodies substantially financed from the Consolidated Funds of the Union and State Governments. Anybody or authority even though not substantially financed from the Consolidated Fund, the audit of which may be entrusted to the C&AG.
  • Grants and loans given by Government to bodies and authorities for specific purposes.
  • Entrusted audits e.g. those of Panchayati Raj Institutions and Urban Local Bodies under Technical Guidance & Support (TGS).

About IPU:

  • The Inter-Parliamentary Union is an international organization of national parliaments.
  • Its primary purpose is to promote democratic governance, accountability, and cooperation among its members; other initiatives include advancing gender parity among legislatures, empowering youth participation in politics, and sustainable development.
  • The organization was established in 1889 as the Inter-Parliamentary Congress.
  • Initially, IPU membership was reserved for individual parliamentarians, but has since transformed to include the legislatures of sovereign states.
  • Its Headquarter is in Geneva, Switzerland.

Examples for Ethics (GS-4):

  • A minor girl was shot at by her elder brother for chatting with her friend on WhatsApp in New Delhi. (Role of family society and educational institutions in inculcating values.)

Important one liners:

  • India has told the United Nations Security Council (UNSC) that it calls for an “immediate comprehensive ceasefire” in Afghanistan, while welcoming all opportunities to bring peace to the country.
  • Facebook received 35,560 requests from the Government of India for user data during the first half (January-June) of 2020 — the second highest globally, according to the latest Transparency Report published by the firm. (An example of breach of right to privacy)
  • As part of steps to deepen cooperation in civil space activities, the space agencies of India and Australia were working together to position temporarily Indian tracking facilities in Australia, Australian Minister for Industry, Science and Technology Karen Andrews said. This would support India’s planned human space flight programme. (An example to be used in India-Australia relation)

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