Polity & Governance
- Banking Regulation (Amendment) Bill, 2017 passed
- 360-Degree Rating of Civil Servants open to bias: Parliamentary Committee
- Panel moots defence procurement fund
- Financial Data Management Centre (FDMC)
Environment, Ecology & Disaster Management
- 10th August: World Bio Fuel Day
Science & Technology
- CubeSat: New mini satellite can be propelled with water
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Polity & Governance
Banking Regulation (Amendment) Bill, 2017 passed
Parliament has passed the Banking Regulation (Amendment) Bill, 2017.
- The bill will replace the Banking Regulation (Amendment) Ordinance, 2017 promulgated by President in May 2017.
- The bill seeks to amend the Banking Regulation Act, 1949 to insert provisions for handling cases related to stressed assets or non-performing assets (NPAs) of banks.
- Stressed assets (NPAs) are loans defaulted by borrower in repayment or the loan which has been restructured by changing the repayment schedule.
Key features of the bill:
Initiating insolvency proceedings:
- It will enable the Central government to authorize the RBI to direct banking companies to resolve specific stressed assets by initiating insolvency resolution proceedings under the Insolvency and Bankruptcy Code, 2016.
Issuing directions on stressed assets:
- It empowers RBI to issue directions to banks for resolution of stressed assets from time to time.
Committee to Advise banks:
- It enables RBI to specify committees or authorities to advise banks on resolution of stressed assets. RBI will appoint or approve members on such committees.
Applicability to State Bank of India (SBI):
- It inserts provision to make above provisions applicable to the SBI and its subsidiaries and also Regional Rural Banks (RRBs).
Need for Amendment:
NPAs in the banks stand at Rs. 6.41 lakh crore in the public sector banks while total stressed assets are at Rs. 8.02 lakh crore. It has resulted in choking the banking system.
- So, it had become necessary for the RBI to intervene in order to take urgent measures for their speedy resolution.
- Government is also expanding infrastructures in Debt Recovery Tribunal, National Company Law Tribunal to deal with stressed assets.
360-Degree Rating of Civil Servants open to bias: Parliamentary Committee
A parliamentary standing committee has raised objections over its feasibility and functioning of the government’s 360-degree rating approach for the civil servants.
What is 360-degree rating approach?
- 360 Degree Appraisal, alternatively called Multi Source Feedback (MSF), is widely used in the Corporate Sector for developmental purposes of the personnel, and is prevalent in the UK and EU countries.
- In India, it was started by the current government for performance appraisal of bureaucrats for future postings.
- The system seeks to look beyond the ratings received in appraisal reports written by their bosses. It relies on feedback of juniors and other colleagues for an all-round view.
- Earlier the bureaucrats’ promotion depended largely on the ACRs (Annual Confidential Reports) for the performance reviews.
- The Annual Confidential Report (ACR) which was in existence till 2007 has been replaced by Annual Performance Appraisal Report (APAR). It is the basic tool devised to assess performance and personality traits of the personnel.
- Three-sixty-degree appraisal is also being used as supplemental tool to the APAR for empanelment and elevation to the level of Joint Secretary and above in the Government of India under the Central Staffing Scheme, since 2015.
Arguments against 360-degree rating approach:
- The present 360-degree appraisal system is opaque, non-transparent, and subjective. Feedback in this process is obtained informally, making the process susceptible to being manipulated.
Lack of objectivity:
- Most central posts of joint-secretary level and upwards go to IAS officers. Since the new 360-degree system hinges on feedback about officers received from people who have worked with them — juniors and peers included— the committee noted that such feedback could lack objectivity.
Possibility of biasness:
- Feedback received from subordinates and stakeholders could be biased or lack objectivity, particularly if the officer had to discipline his subordinates or he was unable to meet the unjustified demands of stakeholders.
- Acting on such feedback behind the back of the officer may not be legally tenable particularly if it adversely affects the empanelment prospects of the officer.
No statutory status:
- Also, the 360-degree approach does not have any statutory backing, or supported by any Act. It is based on executive instructions only.
Arguments in favour of 360-degree rating approach:
Prior to introduction of 360 Degree Appraisal, several problems were noticed in ACRs/APARs.
- Most officers were graded ten or near about, because the ACRs/APARs have to be conveyed to the officer concerned.
- Then there were also instances where different gradings were given by the Reporting, Reviewing and Accepting authorities, making it difficult to take a final view.
- There were situations where officers who were known to be of doubtful integrity could get empanelled because the ACR/APARs were all outstanding.
- On the other hand, there was a possibility that officers who did not have the requisite gradings but were otherwise outstanding in their work, got left out. It became difficult to distinguish between the best and the others.
- The earlier system of empanelment did not fully capture the qualities of officers in terms of integrity and capability and there was a felt need to improve the mechanism.
Panel moots defence procurement fund
The Ministry of Defence (MoD) has gone back on its demand for a non-lapsable capital fund for defence procurements, even as the Parliamentary Standing Committee (PSC) on Defence asked the Ministry of Finance to work out the modalities for the creation of such a fund in consultation with the MoD.
- MoD was earlier keen on such a fund to prevent the unspent amount in a financial year from being returned to the Finance Ministry as defence purchases generally tend to have long procurement cycles.
- On February 2 this year, the MoD had sent a proposal for obtaining an ‘in-principle’ approval of the Finance Ministry on the creation of the account.
- The reasons cited by the MoD for no longer seeking the fund are:the limited utility of such a fund, rules governing its creation that state the Government should have surplus funds (which is not so in the prevailing fiscal situation), and assurance from the Finance Ministry for additional funds, if required.
Financial Data Management Centre (FDMC)
The Law Ministry has approved a revised Cabinet proposal on the creation of the Financial Data Management Centre (FDMC) that would subsequently collect raw data directly.
Key facts about the FDMC:
- FDMC will collect data in electronic format from the (financial) regulators.
- Over time, it will gradually build capacity to collect data from the regulated entities i.e. Financial Service Providers.
- FDMC and the regulators can also “enter into agreement” for flow of data, “stringent confidentiality norms”. This ensures the same level of protection as provided by various acts applicable to the regulators and guarantees that the “data centre is at all times kept secure and effectively protected”.
- In order to facilitate FDMC functioning, “consequential amendments” have been sought in the RBI Act, Banking Regulation Act and the Payment and Settlement Systems Act as their confidentiality clauses do not allow access to raw data.
Need for statutory status:
FDMC will be set up through an Act. Initially, FDMC was to be a non-statutory body to collect data from financial sector regulators, standardise and analyse them on issues relating to financial stability for onward decisions by the Financial Stability and Development Council (FSDC). It was also to provide regular access to the data.
- However, the Department of Legal Affairs turned down the initial Cabinet proposal saying that a non-statutory FMDC would find it difficult to acquire data from the regulators, majority of which were statutory.
- Moreover, it said that any levy of penalty through a gazette notification for violation of data management scheme would neither be legally tenable nor withstand judicial scrutiny.
- Besides, courts may not take cognizance of any such offence and compounding of the same under the Code of Criminal Procedure is also not feasible.
Opposition from RBI:
The Reserve Bank of India (RBI) would now no longer be the sole collector and custodian of financial data.
- The RBI is also against sharing raw data that it gets from banks and other market sources with FDMC as it is not obliged to share confidential client information of banks with anybody.
- The only exception is when a law enforcement agency has to get specifics on an individual company for investigation purpose. But it has to then approach the courts first to get an order to request the data from the regulators.
Environment, Ecology & Disaster Management
10th August: World Bio Fuel Day
Ministry of Petroleum and Natural Gas celebrated the World Biofuel Day 2017 on 10th August.
- It aims is to sensitize youths (school and college going students), farmers and other stakeholders about the benefits of biofuel and seek their involvement in Biofuel programme run by the Government.
About World Bio Fuel Day:
- Every year 10th August is observed as World Bio-Fuel Day in a bid to create awareness about non fossil-fuels (Green Fuels).
- On this day in 1893, Sir Rudolph Diesel (inventor of the diesel engine) for the first time successfully ran mechanical engine with Peanut Oil. His research experiment had predicted that vegetable oil is going to replace the fossil fuels in the next century to fuel different mechanical engines. Thus, to mark this extraordinary achievement, World Biofuel Day is observed every year on 10th August.
- The government will also be coming out with the BioFuel Policy soon. The policy will taken into consideration various facets like Role of Government, Return on investment, Minimum Assurance etc.
- Recently Ministry of Petroleum and Natural Gas has been made responsible for BioFuel Policy.
- Both the Ministry of New and Renewable Energy and Ministry of Petroleum and Natural Gas will be working towards more utilisation of biofuels.
What is Biofuel?
Science & Technology
CubeSat: New mini satellite can be propelled with water
Scientists from US have developed a new type of miniature satellite called CubeSat that can be manoeuvred in space with tiny bursts of water vapour.
What is CubeSat?
- A CubeSat is a type of miniaturized satellite for space research that usually has a volume of exactly one liter (10 cm cube), has a mass of no more than 1.33 kilograms, and typically uses commercial off-the-shelf components for its electronics.
- While conventional satellites require specialised electronics that can withstand the harsh conditions of space, CubeSats can be built with low-cost, off-the-shelf components.
Potential use of CubeSat:
- Low-cost micro satellites and nano satellites – far smaller than conventional spacecraft – have become increasingly prevalent.
- Thousands of these miniature satellites might be launched to perform a variety of tasks, from high-resolution imaging and internet services, to disaster response, environmental monitoring and military surveillance.
- They offer an opportunity for new missions, such as constellation flying and exploration that their larger counterparts cannot economically achieve.
- To achieve their full potential, CubeSats require micropropulsion devices to deliver precise low-thrust “impulse bits” for scientific, commercial and military space applications.
- The new micropropulsion system uses ultra-purified water. The new system, called a Film-Evaporation MEMS Tunable Array (FEMTA) thruster, uses capillaries small enough to harness the microscopic properties of water.
- The technology is similar to an inkjet printer, which uses heaters to push out droplets of ink.
Water as propellant:
- Water is thought to be abundant on the Martian moon Phobos, making it potentially a huge gas station in space.
- Water is also a very clean propellant, reducing risk of contamination of sensitive instruments by the backflow from thruster plumes.