News Summary · 5 minutes read
Stay ahead in your UPSC CSE preparation with our daily News Summary. Designed to save time, it highlights key national and international events from leading newspapers and government websites.
Contents
hide
RBI proposes caps on banks’ exposure to capital markets and acquisition finance
- RBI has issued a draft circular that proposes:
- Banks’ total direct exposure to capital markets + acquisition financing: capped at 20% of their Tier-1 capital.
- Banks’ aggregate capital-market exposure (direct + indirect via funds, guarantees, etc.): capped at 40% of their Tier-1 capital.
- Banks’ acquisition-finance exposure: capped at 10% of their Tier-1 capital.
- Proposals include allowing domestic banks to lend for acquisitions by Indian corporates, a segment so far cornered by foreign lenders and credit funds.
- Banks may finance up to 70% of the acquisition deal value.
- Banks can offer acquisition finance only to listed entities with a satisfactory net worth and that have been profitable for at least the last three years → loan should be fully secured by the shares of the target company.
Tier 1 and Tier 2 capital
- Tier 1 Capital is the highest-quality capital of a bank, helping maintain its financial stability during a crisis. It mainly includes:
- Common Equity Tier 1 (CET 1): Pure equity and reserves
- Additional Tier 1 (AT 1): Perpetual bonds and similar instruments
- Tier 2 Capital is supplementary capital that provides a second layer of protection, absorbing losses in the event of an extreme financial stress of the bank.
Table: Minimum capital ratio (of Risk-Weighted Assets) requirements stipulated by Basel III framework and its adaptation in India by RBI
| Component | Basel III requirement | RBI’s requirement under Basel III (2023 update) |
|---|---|---|
| Common Equity Tier 1 (CET1) | 4.5 % | 5.5 % |
| Additional Tier 1 (AT1) | 1.5 % | 1.5 % |
| Total Tier 1 (CET1 + AT1) | 6.0 % | 7.0 % |
| Tier 2 Capital | 2.0 % | 2.0 % |
| Total Regulatory Capital (Tier 1 + Tier 2) | 8.0 % | 9.0 % |
| Capital Conservation Buffer (CCB) | 2.5 % | 2.5 % |
| Total Required Capital (incl. CCB) | 8.0 + 2.5 = 10.5 % | 9.0 + 2.5 = 11.5 % |
Applicability of RBI’s capital requirements under Basel III framework
- RBI issued the Basel III Capital Regulations in 2012 (came into effect in 2013) and updated many times since then → prescribes minimum capital and risk-management standards for banks.
- RBI’s capital requirements under the Basel III framework apply to all Scheduled Commercial Banks (SCBs), excluding Small Finance Banks, Payments Banks and Regional Rural Banks.
Table: Applicability of Basel III framework for Banks/ Financial Institutions operating in India
| Category | Applicability |
|---|---|
| Public Sector Banks (PSBs) | ✅ Yes |
| Private Sector Banks | ✅ Yes |
| Foreign Banks (operating in India) | ✅ Yes |
| Regional Rural Banks (RRBs) | ❌ No |
| Small Finance Banks (SFBs) | ❌ No |
| Payments Banks | ❌ No |
| Local Area Banks (LABs) | ❌ No |
| Co‑operative Banks | ❌ No |
| Development Financial Institutions / All India Financial Institutions (AIFIs) Examples: NABARD, SIDBI. | ✅ Yes |
| Non‑Scheduled Banks | ❌ No |
Gyan Bharatam Mission (GBM) to ink pact with institutes
- GBM is set to sign MoUs with several institutes for the conservation, maintenance, and digitisation of manuscripts → Some of these institutes are Asiatic Society Kolkata, University of Kashmir, Srinagar, Hindi Sahitya Sammelan, Prayagraj, and Government Oriental Manuscript Library, Chennai.
- The institutions set to sign MoUs have been categorised into cluster centres and independent centres.
- Cluster Centre: institution will execute all manuscript-related activities of its own centre, as well as those of its designated cluster partner centres (max 20).
- Independent centre: institution will execute all manuscript-related activities pertaining solely to its own collection.
- GBM shall provide the overarching framework, guidance, monitoring, and funding for the execution of activities under this partnership.
- Activities: survey and cataloguing, conservation and capacity building, technology and digitisation, linguistics and translation, research, publication, and outreach.
- Centres will constitute a dedicated Gyan Bharatam Cell, with experience in each vertical.
Gyan Bharatam Mission (GBM)
- A Central Sector Scheme by the Ministry of Culture with Rs. 482.85 crore outlay approved for 2024–31 → was announced in the Union Budget 2025–26, and formally launched at the first Gyan Bharatam International Conference (11-13 September 2025, New Delhi).
- Aims to preserve, digitize, and disseminate India’s manuscript heritage → intends to cover more than one crore manuscripts.
- Replaces National Manuscripts Mission (launched in 2003).
- Gyan-Setu: a National AI Innovation Challenge for India’s Manuscript Heritage, launched by the Ministry of Culture under GBM.
Quick Picks
- Swarnamukhi River: an east-flowing river in the Rayalaseema region of Andhra Pradesh → originates in the Eastern Ghats and drains into the Bay of Bengal (does not join any other river system) → Its basin encompasses Tirumala (famed for Sri Venkateswara Swami Temple) and Srikalahasti (famed for Srikalahasteeswara temple).
- 1983 Nellie massacre: occurred during the anti-foreigners Assam Agitation → a panel led by Justice Tribhuvan Prasad Tiwari probed the causes, but the report was never made public → Now, the Assam Cabinet has decided to table the report in the State Assembly.
- A judicial panel led by Justice B.S. Chauhan will investigate the Leh violence → constituted by the MHA.
- Khyber Pakhtunkhwa: a province of Pakistan, formerly known as the North-West Frontier Province (NWFP) → shares border with Afghanistan and India (Ladakh, J & K).
- Sanae Takaichi: New Prime Minister of Japan → first woman Prime Minister of Japan.
- Knesset: legislature of Israel → unicameral.
- India formally recognised the State of Palestine in 1988 → opened a Representative Office in Gaza in 1996, and moved to Ramallah in 2003.
- Booker Prize Foundation has announced to launch the Children’s Booker Prize → will be launched in 2026 and be awarded annually from 2027 → foundation’s existing awards: The Booker Prize (for English fiction published in UK/Ireland) and The International Booker Prize (for fiction translated into English and published in UK/Ireland).
- Storm Benjamin (October 2025): a powerful Atlantic extratropical storm that swept across Western and Central Europe.
Practice: Daily Current Affairs Quiz ↗️
Read: News Summary ↗️
Subscribe: Telegram Channel ↗️
Join: Telegram Group ↗️