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Curtain Raiser – HADR Exercise TIGER TRIUMPH to Commence at Visakhapatnam


  • In consonance with the growing partnership between India and the US, the maiden India US joint Tri services Humanitarian Assistance and Disaster Relief (HADR) Exercise named ‘TIGER TRIUMPH’ is scheduled on the Eastern seaboard from 13 to 21 Nov 19. Indian Naval ships JalashwaAiravatand Sandhayak, Indian Army troops from 19 Madras and 7 Guards, and Indian Air Force MI-17 helicopters and Rapid Action Medical Team (RAMT) would be participating in the exercise. The US would be represented by US Navy Ship Germantown with troops from US Third Marine Division. The Exercise is aimed to developing interoperability for conducting HADR operations.
  • The Harbour Phase is scheduled at Visakhapatnam from 13 to 16 Nov 19. The Opening Ceremony along with a Joint Flag Parade and Media Interaction will be held onboard INS Jalashwaon 14 Nov 19. Personnel from both navies would also participate in Training Visits, Subject Matter Expert Exchanges, Sports Events and social interactions.  On completion of theHarbour Phase, the ships, with troops embarked, would sail for the Sea Phase and undertake Maritime, Amphibious and HADR operations.  On reaching the HADR areaat Kakinada, the landing of Relief Forces would be undertaken to the Exercise scenario.



India will emerge as the torchbearer of banking reforms, says Dr. Jitendra Singh


Key challenges to the banking system


  • Low financial depth
  • A high share of non-performing assets (NPAs) and
  • A high concentration of public sector banks (PSBs).

These issues constrain industrial credit and banks’ ability to meet international capital requirements. Existing measures have not been enough to tackle these challenges.


The focus areas to stimulate the banking sector


  • improving governance of banks,
  • enhancing competition in the sector and
  • developing corporate bond markets to relieve pressure from banks as lending sources.


History of bank reforms of India


  • Before 1991, India had been nationalizing a large share of its banking sector.
  • In 1969, the government nationalized banks with deposits greater than Rs. 50 crore. It controlled more than 80 percent of bank branches.
  • In 1980, the government brought an additional number of banks under its control, nationalizing banks with country-wide deposits more than Rs. 200 crore. About 90 per cent of all banks were controlled by the government and this share remained fairly steady during this period.
  • Between 1969 and 1991, the geographical penetration, density of coverage and number of bank branches grew significantly. Banks also witnessed large deposit and credit growth. Priority sector lending grew from 14 to 41 percent.
  • However, by 1991, banks’ efficiency and productivity had declined, customer service quality was poor and profitability was low. In 1991, when the government liberalized the economy, it also undertook a number of banking reforms.
  • The Committee on Financial Systems, chaired by Mr. M.Narashimham in 1991, recommended
    • reducing the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) to free up bank resources,
    • relying on market forces to determine interest rates, making it easier for private and foreign banks to enter to enhance competition and
    • reducing substantially the number of public sector banks (PSBs).

Many of the committee’s recommendations were implemented, including the reduction in SLR and CRR, having a market determined interest rate and opening of new private sector and foreign banks.

  • In 1998, the Committee on Banking Sector Reforms, also chaired by Mr. Narsimham, recommended a further set of measures to strengthen the banking sector. It reviewed progress in existing measures and proposed further measures related to legislation, capital adequacy and bank mergers.
  • Beyond these, the 1998 Committee also recommended steps relating to greater technology use, skills training and professional management of banks. Many of these reforms put in place since 1991 improved the performance and strength of India’s banking sector.

The government has infused funds to address the challenge. The measures for recapitalization under the Indradhanush Plan in 2015-16 acknowledge the government’s recognition of high NPA ratios and their adverse effects on the economy.

  • The negative effects include further declines in bank credit, low bank profitability and declining capital adequacy ratios. To counter these, the Ministry of Finance announced a Rs. 2.1 lakh crore plan to recapitalize banks on October 24. These funds will not only help PSBs meet their minimum capital requirements but they will also help banks clean up their balance sheets and cover bad loans going forward.
  • Beyond recapitalization, the Indradhanush Plan also includes wider banking reforms needed to strengthen institutional governance and align incentives in the banking system.
  • Its seven points include creating a framework of Accountability, separating the roles of CFO and Chairman in PSBs, creating a Bank Board Bureau (BBB) for appointments and governance Reforms. However, its implementation remains incomplete.

Further, the Insolvency and Bankruptcy Code (IBC) also provides a channel for addressing NPAs. It requires banks and promoters to agree on a resolution plan within 270 days or face asset Liquidation.


Global Competition


  • India’s banks lag behind global counterparts in terms of financial depth or the size of banks, other financial institutions and markets relative to economic output. A study using state-level data from India highlights that financial deepening has contributed to poverty alleviation in rural areas.
  • India also has low levels of private credit to GDP and credit to deposit ratio, relative to other emerging economies.
  • In 2015, India’s private credit to GDP ratio was 50.2 per cent relative to 140 per cent in China and 71 per cent in Brazil.
  • Bank credit as a ratio of bank deposits was 77 per cent in India compared to 119 per cent in Brazil and 312 per cent in China in 2015.
  • Large banks dominate the banking system with few new entrants. As of March 2016, the top 10 banks (ranked by assets) owned 58 per cent of the total assets in the system. Since 1991, only 14 licenses have been granted for universal banks. In contrast, in the United States, over 130 new banks were chartered annually on average between 1976 and 2009.
  • The number of foreign banks in India remains small. As of March 2016, foreign banks accounted for 6 per cent of total banking assets.


Way forward


  • India should strive to have a more robust and well-capitalized banking system, with enhanced capacity to extend credit and an incentive structure suitable for productive allocation of resources.
  • To build a robust banking system, recapitalization will have to be complemented by a host of other measures including corporate governance reforms, lower entry barriers, improved financial supervision, development of a dynamic corporate debt market and efficient debt recovery mechanisms.


Three particular areas to be prioritized


  1. Improving governance and strengthening institutions, particularly in PSBs.
  • In terms of sequencing, these reforms are as important as recapitalization and will also need to be pursued in parallel.
  • Global examples highlight the importance of undertaking banking sector reforms in tackling NPAs. For example, in China, besides recapitalization, banking sector reforms focused explicitly on strengthening financial regulation and supervision, improving corporate governance and enhancing transparency. Similarly, South Korea created a Financial Supervisory Service (FSS) to ensure supervision in their banks following the East Asian Financial Crisis of the late 1990s. To some extent, the government has already acknowledged the need for better governance of banks.
  • The Indradhanush Plan had suggested the creation of an independent Bank Board Bureau to oversee the employment of bank officials. If a truly independent Bureau is created, this can have a profound effect on PSB governance. Greater accountability can ensure that banks’ lending practices are in line with the productive allocation of credit. We need to ensure that implementation takes places in a timely manner.
  1. Other area for reform is the development of corporate bond markets.
  • Bond markets need to complement banks as important sources of finance Liquid and deep bond markets will enable firms to raise debt at low costs.
  • Over time, ideally, the share of bond markets as the source of corporate debt will increase and the share of banks in lending will decline.
  1. The third area for banking sector reform is continuing to make the banking sector more competitive.
  • India should continue to encourage the entry of private and foreign players to foster greater competition and innovation in the sector.
  • The new policy of “on-tap” licensing of banks is a positive step in this direction. However the entry requirements could be relaxed further to reduce barriers to entry. Advocating a subsidiary structure will not only encourage foreign banks to enter the Indian banking sector but it will also help limit exposure to global shocks.
  • In the long run, greater competition will raise the efficiency and profitability of the sector.
  • Historically, India’s banking sector reforms — especially in the 199O — have also focused on enhancing competition, strengthening governance and regulation. Future reforms should also build upon these areas and draw lessons from past experiences.



“Creation of UT of J&K and Ladakh historic, opened the flood gates of development and progress in the region”: Dr. Jitendra Singh



  • he two new UTs, Ladakh and J&K, officially came into existence on the144th birth anniversary of Sardar Vallabhbhai Patel (31st October 2019), who is credited for the merger of over 560 princely states into the Union of India.
    • With this, President’s rule imposed in undivided Jammu and Kashmir in June 2018 stands revoked.
    • The flag and constitution of Jammu and Kashmir, as well as the Ranbir Penal Code (RPC), cease to exist, with the Indian Penal Code (IPC) now extending to both UTs.
  • The Union Territory of J&K will have a 114-member elected Assembly and a Chief Minister whereas the Union territory of Ladakh will be controlled directly by the L-G (i.e. without an Assembly).

Administration of UTs



  • Articles 239 to 241 in Part VIIIof the Constitution deal with the union territories.
  • Every union territory is administered by the Presidentacting through an administrator appointed by him.
    • The President can specify the designation of an administrator; it may be Lieutenant Governor or Chief Commissioner or Administrator.
  • The Parliament can make laws on any subject of the three lists(i.e. Union, State and Concurrent) for the union territories.


Department of Rural Development decides to institutionalize social audits in major schemes



Social audit is a process by which a government accounts for its social performance to its stakeholders and seeks to improve its performance in future. It allows us to measure , report on and to improve the social performance of any government effort or organisation.


a) payment of a fair and regular dividend to shareholders.

  1. b) reduction of price to consumers.
  2. c) prioritising interest of rural poor ,examining various policy decisions
  3. d) extension, development and improvement of company’s business and building up of its financial independence.

e)assist in promoting the amenities in locality.




  1. a) provide a recognised method of bringing social issues to the management concern.
  2. b) It encourages greater concern for social performance throughout the organisation.
  3. c) It provides data for comparing effectiveness of various social welfare programmes.
  4. d) social audits made to the company and not to the public. Hence the auditor can give a frank opinion about the social welfare scheme of the company.

Mere undertaking of social audit is not sufficient but what is needed is a frank and full disclosure of its working. Its activity can create much impact on society. as such its impact on society cannot be ignored or taken lightly. Thus, social audit has become the need of the day. It is a matter not of ambition, but of necessity.