General Awareness with Kapil Kathpal pinned «11th June 2019- Daily Current Affairs : The Hindu Analysis- Banking Exams 2019»
Descriptive/GD/PI Question: 11-06-2019
Discuss in detail the crisis being faced by NBFCs in India? Suggest what measures need to be taken to resolve the same?
The article highlights the ripple effect of the NBFCs crisis on the Indian economy. Non-banking financial companies (NBFCs) are facing a crisis , it brings out the urgency with which RBI needs to urgently address the liquidity issues plaguing the NBFC sector.
The answer must explain what are NBFCs, their role and activities in the economy, what are the issues currently they are facing and what needs to be done to resolve it.
The answer to the question is direct, one must explain in detail the issues being faced by NBFCs and what measures are needed to tackle the same.
The article captures both the dimensions, the students must take hints and structure the answer in detail.
Conclusion:
Conclude with what should be the way ahead.
Model Answer to this question will be given by 5 PM today..!!
Discuss in detail the crisis being faced by NBFCs in India? Suggest what measures need to be taken to resolve the same?
The article highlights the ripple effect of the NBFCs crisis on the Indian economy. Non-banking financial companies (NBFCs) are facing a crisis , it brings out the urgency with which RBI needs to urgently address the liquidity issues plaguing the NBFC sector.
The answer must explain what are NBFCs, their role and activities in the economy, what are the issues currently they are facing and what needs to be done to resolve it.
The answer to the question is direct, one must explain in detail the issues being faced by NBFCs and what measures are needed to tackle the same.
The article captures both the dimensions, the students must take hints and structure the answer in detail.
Conclusion:
Conclude with what should be the way ahead.
Model Answer to this question will be given by 5 PM today..!!
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The most important course for SBI PO and Clerk Exam...
General Awareness with Kapil Kathpal pinned «Complete Banking/Financial/Economic Awareness Course...Follow it for all upcoming Banking Exams... The most important course for SBI PO and Clerk Exam...»
General Awareness with Kapil Kathpal
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General Awareness with Kapil Kathpal
Descriptive/GD/PI Question: 11-06-2019 Discuss in detail the crisis being faced by NBFCs in India? Suggest what measures need to be taken to resolve the same? The article highlights the ripple effect of the NBFCs crisis on the Indian economy. Non-banking…
Model Answer to the question:
Introduction:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business. 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 and sale/purchase/construction of immovable property.
Body:
NBFC crisis:
NBFC is passing through a turbulent period following a series of defaults by Infrastructure Leasing and Financial Services (IL&FS) and the subsequent liquidity crunch.
Several corporates, mutual funds and insurance companies had invested in short-term instruments such as commercial papers (CPs) and non-convertible debentures (NCDs) of the IL&FS group that has been defaulting on payments since August.
This has stoked fears that many of them could have funds stuck in IL&FS debt instruments which, in turn could lead to a liquidity crunch in their own backyard.
There are rising fears that the funding cost for NBFCs will zoom and result in a sharp decline in their margins.
Higher borrowing costs and narrowing options to raise funds will pose challenges for retail non banking finance companies (NBFCs) in the fiscal year ending March 2019.
The bond yields have gone up sharply to around the 8% mark. That is making borrowing costlier even at the short end of the yield curve.
NBFCs are likely to witness higher pricing pressure as competition in the retail segment intensifies going forward this is expected to be accentuated by narrowing funding avenues and higher systemic rates.
Higher fuel prices, weaker dollar and the trade war could hit the SME sector badly. This would mean defaults by SMES, which have been a traditional market for NBFC lending.
Investors are worried about a credit downgrade backlash on NBFCs. That could mean huge write-offs for investors.
Mutual funds who have invested in market instruments of NBFCs have faced increased redemption pressures.
A kind of contagion then spread to other financial stocks, and the benchmark indices crashed, creating wider impacts.
Following the credit crunch after IL&FS crisis, RBI provided special incentives to banks to enable the flow of funds to NBFCs.
Way forward:
Given the growing size and dominance of the NBFC sector, it is important that the threshold capital levels for entry be substantially increased. It may be prudent for RBI to evaluate the need to shore up minimum capital requirements for various NBFCs.
While RBI has identified systemically important NBFCs, it needs to step up the monitoring of NBFCs which belong to large, diversified groups. Checks and balances are needed to ensure that risks do not build up in the sector due to structures which are too-complex-to-manage.
RBI could consider re-visiting some of the unimplemented recommendations of the Working Group on Issues and Concerns in the NBFC Sector chaired by Usha Thorat in 2011.
One such recommendation was the introduction of a liquidity coverage ratio for NBFCs. The objective was to ensure that NBFCs have cash balances and holdings of government securities which may fully cover gaps between cumulative outflows and cumulative inflows for the first 30 days. This would be the buffer in times of stress.
Introduction:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business. 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 and sale/purchase/construction of immovable property.
Body:
NBFC crisis:
NBFC is passing through a turbulent period following a series of defaults by Infrastructure Leasing and Financial Services (IL&FS) and the subsequent liquidity crunch.
Several corporates, mutual funds and insurance companies had invested in short-term instruments such as commercial papers (CPs) and non-convertible debentures (NCDs) of the IL&FS group that has been defaulting on payments since August.
This has stoked fears that many of them could have funds stuck in IL&FS debt instruments which, in turn could lead to a liquidity crunch in their own backyard.
There are rising fears that the funding cost for NBFCs will zoom and result in a sharp decline in their margins.
Higher borrowing costs and narrowing options to raise funds will pose challenges for retail non banking finance companies (NBFCs) in the fiscal year ending March 2019.
The bond yields have gone up sharply to around the 8% mark. That is making borrowing costlier even at the short end of the yield curve.
NBFCs are likely to witness higher pricing pressure as competition in the retail segment intensifies going forward this is expected to be accentuated by narrowing funding avenues and higher systemic rates.
Higher fuel prices, weaker dollar and the trade war could hit the SME sector badly. This would mean defaults by SMES, which have been a traditional market for NBFC lending.
Investors are worried about a credit downgrade backlash on NBFCs. That could mean huge write-offs for investors.
Mutual funds who have invested in market instruments of NBFCs have faced increased redemption pressures.
A kind of contagion then spread to other financial stocks, and the benchmark indices crashed, creating wider impacts.
Following the credit crunch after IL&FS crisis, RBI provided special incentives to banks to enable the flow of funds to NBFCs.
Way forward:
Given the growing size and dominance of the NBFC sector, it is important that the threshold capital levels for entry be substantially increased. It may be prudent for RBI to evaluate the need to shore up minimum capital requirements for various NBFCs.
While RBI has identified systemically important NBFCs, it needs to step up the monitoring of NBFCs which belong to large, diversified groups. Checks and balances are needed to ensure that risks do not build up in the sector due to structures which are too-complex-to-manage.
RBI could consider re-visiting some of the unimplemented recommendations of the Working Group on Issues and Concerns in the NBFC Sector chaired by Usha Thorat in 2011.
One such recommendation was the introduction of a liquidity coverage ratio for NBFCs. The objective was to ensure that NBFCs have cash balances and holdings of government securities which may fully cover gaps between cumulative outflows and cumulative inflows for the first 30 days. This would be the buffer in times of stress.
"अकड़ तोड़नी है उन मंजिलों की,
जिनको अपनी ऊंचाई पर गुरुर है।"
जिनको अपनी ऊंचाई पर गुरुर है।"
12th June - Daily Current Affairs : The Hindu Analysis- Banking Exams 2019
General Awareness with Kapil Kathpal pinned «12th June - Daily Current Affairs : The Hindu Analysis- Banking Exams 2019»
Descriptive/GD/PI Question: 12-06-2019:
Do you agree there is a dire need for revolutionary changes in the India’s education system? analyse the education agenda for a new and changing India.
The question is straightforward and is about discussing the education agenda of the country.
The answer must explain the issues currently facing the education system in India and why there is a need for overhaul in the system and what needs to be done to overcome it.
The answer to the question is direct, one must explain the issues concerning the education system, explain why it requires a revolutionary change? What are the issues that need urgent attention? What should be the new education agenda? Discuss and analyse the failures of policies in the past , explain how these issues can be explained with a robust education agenda which is reformative and addresses the loopholes of the current education system.
Conclusion:
Conclude with what should be the way ahead.
Answer to the question will be posted here at 5 PM
Do you agree there is a dire need for revolutionary changes in the India’s education system? analyse the education agenda for a new and changing India.
The question is straightforward and is about discussing the education agenda of the country.
The answer must explain the issues currently facing the education system in India and why there is a need for overhaul in the system and what needs to be done to overcome it.
The answer to the question is direct, one must explain the issues concerning the education system, explain why it requires a revolutionary change? What are the issues that need urgent attention? What should be the new education agenda? Discuss and analyse the failures of policies in the past , explain how these issues can be explained with a robust education agenda which is reformative and addresses the loopholes of the current education system.
Conclusion:
Conclude with what should be the way ahead.
Answer to the question will be posted here at 5 PM
Introduction:
There is a dire need for revolutionary changes in India’s education system, there is no doubt about that. The cut-offs at some of the top universities is over 99% if not 100%. Students are pushed to the brink to try and further their educational ambitions. Several aspects need to be addressed if we have to achieve the desired results and head in the right direction. India has one of the youngest populations in an aging world. By 2020, the median age in India will be just 28, compared to 37 in China and the US, 45 in Western Europe, and 49 in Japan. But for us to reap the benefit of this demographic dividend we need to ensure that we see an overhaul in our education system.
Body:
Issues in Indian Education system:
The Indian education and social arrangements are very inflexible on kids and completely ignore their feelings, thoughts and ambitions. Kids are pressed to study from the age of 3. Non-performers are treated as dunces and detested by parents and society.
As per UNESCO data, India has one of the lowest public expenditure rates on education per student, especially compared to other Asian countries like China.
Education in most schools is one dimensional, with an obsessive focus on marks. Added to this is the lack of availability of trained teachers at all levels. Quality teachers are the missing link in the Indian education system. Although pockets of excellence exist, the quality of teaching, especially in government schools, does not meet the standards.
With a literacy rate of 77 percent, India lags behind other BRICS nations, which have literacy rates above 90 percent. All these countries have better student-teacher ratios. So not only does India grapple with poor quality teachers, it also has fewer total teachers in comparison with other countries that do a better job at education.
Data from the Ministry of Human Resource Development show that only half of all students who enter primary school make it to the upper primary level and less than half that get into the 9-12 class cycle.
Only 58 percent of children enrolled in classes three to five could read a class one text.
Less than half (47 percent) were able to do simple two-digit subtraction.
Only half of the children in classes five to eight could use a calendar.
They were not found proficient in even basic skills; about two-thirds of the students in class four could not master the measurement of the length of the pencil with a ruler.
Study after study has shown that the true indicator of economic development in a country is the education and wellbeing of its people. Although, India has made rapid economic progress over the last three decades, one area that has not received enough attention is the quality of primary education.
Lack of good secondary and higher secondary schools: The number of secondary schools is less than 150,000 for a country of 1.3 billion, and even this comes down to just 100,000 at the higher secondary level. While there are around five million primary school teachers, at the secondary level the number is just 1.5 million. India has persisted with a schooling system that has long failed its young.
The inevitable shift to private school education along with the Right to Education Act represents a failure of the public-school system.
Education agenda for a New and Changing India:
Technology has to be a primary part of the process. Technology allows us to adapt to teaching and assessment of entirely new skills that are very significant for the present century and that you cannot progress in a kind of traditional setting.
This necessitates refined public policy, a long-term commitment, and a systematic approach.
Our education must be all round developer. It must be based on creative rather than memorizing. Practical or Visualize education must be promoted.
It is time that India began viewing school education as a critical strategic investment and gave it the status of a vital infrastructure project. As all in-country efforts have failed, we should go in for a radical overhaul of our educational infrastructure w
There is a dire need for revolutionary changes in India’s education system, there is no doubt about that. The cut-offs at some of the top universities is over 99% if not 100%. Students are pushed to the brink to try and further their educational ambitions. Several aspects need to be addressed if we have to achieve the desired results and head in the right direction. India has one of the youngest populations in an aging world. By 2020, the median age in India will be just 28, compared to 37 in China and the US, 45 in Western Europe, and 49 in Japan. But for us to reap the benefit of this demographic dividend we need to ensure that we see an overhaul in our education system.
Body:
Issues in Indian Education system:
The Indian education and social arrangements are very inflexible on kids and completely ignore their feelings, thoughts and ambitions. Kids are pressed to study from the age of 3. Non-performers are treated as dunces and detested by parents and society.
As per UNESCO data, India has one of the lowest public expenditure rates on education per student, especially compared to other Asian countries like China.
Education in most schools is one dimensional, with an obsessive focus on marks. Added to this is the lack of availability of trained teachers at all levels. Quality teachers are the missing link in the Indian education system. Although pockets of excellence exist, the quality of teaching, especially in government schools, does not meet the standards.
With a literacy rate of 77 percent, India lags behind other BRICS nations, which have literacy rates above 90 percent. All these countries have better student-teacher ratios. So not only does India grapple with poor quality teachers, it also has fewer total teachers in comparison with other countries that do a better job at education.
Data from the Ministry of Human Resource Development show that only half of all students who enter primary school make it to the upper primary level and less than half that get into the 9-12 class cycle.
Only 58 percent of children enrolled in classes three to five could read a class one text.
Less than half (47 percent) were able to do simple two-digit subtraction.
Only half of the children in classes five to eight could use a calendar.
They were not found proficient in even basic skills; about two-thirds of the students in class four could not master the measurement of the length of the pencil with a ruler.
Study after study has shown that the true indicator of economic development in a country is the education and wellbeing of its people. Although, India has made rapid economic progress over the last three decades, one area that has not received enough attention is the quality of primary education.
Lack of good secondary and higher secondary schools: The number of secondary schools is less than 150,000 for a country of 1.3 billion, and even this comes down to just 100,000 at the higher secondary level. While there are around five million primary school teachers, at the secondary level the number is just 1.5 million. India has persisted with a schooling system that has long failed its young.
The inevitable shift to private school education along with the Right to Education Act represents a failure of the public-school system.
Education agenda for a New and Changing India:
Technology has to be a primary part of the process. Technology allows us to adapt to teaching and assessment of entirely new skills that are very significant for the present century and that you cannot progress in a kind of traditional setting.
This necessitates refined public policy, a long-term commitment, and a systematic approach.
Our education must be all round developer. It must be based on creative rather than memorizing. Practical or Visualize education must be promoted.
It is time that India began viewing school education as a critical strategic investment and gave it the status of a vital infrastructure project. As all in-country efforts have failed, we should go in for a radical overhaul of our educational infrastructure w
ith the help of countries that have an amazing record in providing quality school education — Finland, for instance. We can surely afford to pay for that.
Providing universal quality education depends not on the performance of teachers alone but is the shared responsibility of several stakeholders: governments, schools, teachers, parents, the media and civil society, international organisations, and the private sector.
A complete paradigm shift is needed as far as our education system is concerned. However, one has reason to believe that there are some positive signs too. For example, in schools itself, we are talking about Programme for International Students Assessment (PISA)- these are definitely encouraging signs.
Skilling has to improve across higher education sectors and it has to be diverse. Let’s not forget that only about 5% of the Indian workforce is trained in any sort of skills today; we are staring in the face of a demographic disaster if skill development is not undertaken.
Conclusion:
India continues to have the largest number of young people anywhere. By ensuring they get a world-class education over the next few decades, India will be well on its way towards becoming a developed nation sooner than expected.
Providing universal quality education depends not on the performance of teachers alone but is the shared responsibility of several stakeholders: governments, schools, teachers, parents, the media and civil society, international organisations, and the private sector.
A complete paradigm shift is needed as far as our education system is concerned. However, one has reason to believe that there are some positive signs too. For example, in schools itself, we are talking about Programme for International Students Assessment (PISA)- these are definitely encouraging signs.
Skilling has to improve across higher education sectors and it has to be diverse. Let’s not forget that only about 5% of the Indian workforce is trained in any sort of skills today; we are staring in the face of a demographic disaster if skill development is not undertaken.
Conclusion:
India continues to have the largest number of young people anywhere. By ensuring they get a world-class education over the next few decades, India will be well on its way towards becoming a developed nation sooner than expected.
Banking and Economic Awareness- January to June 2019