PIB Summary- 12th July, 2021 | PIB (Press Information Bureau) Summary - UPSC PDF Download

Ashadhi Bij

About Ashadhi Bij

• Ashadhi Bij is an auspicious day for the farming communities in northern India especially Gujarat, Uttar Pradesh and some other places.
• The festival falls on the second day of the Shukla Paksha of the Ashadha month of the Hindu calendar.
• The festival is associated with the beginning of rains in the Kutch region of Gujarat and is celebrated as the Kutchi New Year.
• On this festival, farmers, astrologers and others predict the monsoon to assess which crop would be best in the coming season.

Rath Yatra

About Puri Rath Yatra

• The Rath Yatra festival at the Jagannath Temple at Puri, Odisha was on 12th July this year.
• Because of the covid-19 pandemic, the festival was celebrated without devotees.
• Only officials and temple authorities, apart from police personnel were present.

What’s in News?
The Managing Committee of Shree Jagannath Temple, Puri, has recommended the construction of chariots used in the annual Rath Yatra, but uncertainty continues to prevail over holding the mega festival scheduled for June 24, 2020.

• As per tradition, construction of three majestic chariots for deities — Lord Jagannath, Lord Balabhadra and Devi Subhadra — begins from the auspicious day of Akshaya Tritiya.
• Since the nation was under COVID-19 lockdown, the chariot construction was not allowed.
• Rath Yatra is a Hindu festival associated with Lord Jagannath held at Puri in Odisha.
• The festival commemorates Jagannath’s annual visit to Gundicha Temple via Mausi Maa Temple near Balagandi Chaka, Puri.

National Bank For Agriculture And Rural Development (NABARD)

What is NABARD?

In the year 1982, CRAFICARD or the Committee to Review Arrangements of Institutional Credit for Agriculture and Rural Development recommended the establishment of a developmental bank and accordingly, NABARD was set up.
It was formed by a special parliamentary act. The chief focus of the organisation was the advancement of rural India by enhancing the flow of credit for the upliftment of agriculture as well as the rural non-agricultural sector. 

Functions of NABARD

• In order to build an empowered and financially inclusive rural India, NABARD has specific departments that work towards the desired goals. These departments can be collectively categorized into three majors units:
  • Financial
  • Developmental
  • Supervision
• The financial support necessary to build rural infrastructure is provided by NABARD.
• Preparation of district-level credit plans by NABARD are used to guide and motivate the banking industry to achieve required targets. 
• NABARD also supervises the Regional Rural Banks (RRBs) and Cooperative Banks along with developing their banking practices and integrating them to the Core Banking Solution (CBS) platform.

What is the CBS platform?
Core Banking Solution (CBS) is a networking of branches, which enables customers to operate their accounts, and avail banking services from any branch of the Bank on the CBS network, regardless of where he maintains his account. The customer is no longer the customer of a Branch. He becomes the Bank’s Customer.

• NABARD also helps handicraft artisans sell their products by training and providing a marketing platform for them.
• NABARD has partnered with various leading global organisations and institutions affiliated with the World Bank that have played a role in transforming agriculture.

It offers advisory services and financial assistance provided by these international partners to help in consultation with rural development and other agricultural practices.

Important Contributions of NABARD

International Financial Services Centres Authority (IFSCA)

Details

• The IFSCA has issued a framework for setting up and operating International Trade Finance Services Platform for providing Trade Finance Services at International Financial Services Centres.
• The framework will enable Exporters and Importers to avail various types of trade finance facilities at competitive terms, for their international trade transactions through a dedicated electronic platform viz, ITFS.
• This will help in their ability to convert their trade receivables into liquid funds and to obtain short term funding.
• This framework will provide an opportunity to the participants to avail trade finance facilities for trade transactions such as Export Invoice Trade Financing, Reverse Trade Financing, Bill discounting under Letter of Credit, Supply Chain Finance for Exporters, Export Credit (Packing Credit), Insurance/Credit Guarantee, Factoring and any other eligible product, on the ITFS platform.

What is the International Financial Services Centres Authority (IFSCA)?

The IFSCA was established in April 2020 under the International Financial Services Centres Authority Act, 2019. It is a statutory authority established by the Indian Government.

• It is an authority to develop and regulate financial services, financial products and financial institutions in the International Financial Services Centre (IFSC) in India. 
  • Currently, there is only one IFSC being developed in India, Gift City, in Gandhinagar, Gujarat.
• Before the IFSCA was established, the financial services and institutions were regulated by the domestic financial regulators such as SEBI, RBI, IRDAI, PFRDA, etc.
• The main goal of the IFSCA is to promote ease of doing business in IFSC and provide a world class regulatory environment. 
• The IFSCA will not only regulate the nature of business which will be transacted in the IFSC but will also be regulating the functioning of the entities involved with transacting business in IFSC.
• IFSCA is headquartered in Gandhinagar. Its current chairman is Injeti Srinivas.

IFSCA Members
The IFSCA consists of nine members appointed by GOI. The members are:

• Chairperson 
• 1 member from RBI
• 1 member from SEBI
• 1 member from PFRDA
• 1 member from IRDAI
• 2 members from the Finance Ministry
• 2 members appointed on recommendation of a Selection Committee

The term of each member is three years subject to reappointment.

What is an International Financial Services Centre?

An International Financial Services Centre (IFSC) is a financial centre that caters to customers outside the jurisdiction of the domestic economy. It is also known as an offshore financial centre since it deals with flow of finance, financial products and services across borders.
An IFSC is, thus, a jurisdiction that provides world class financial services to non-residents and residents, to the extent permissible under the current regulations, in a currency other than the domestic currency of the location where the IFSC is located. 

• Examples of existing international or global financial centres can be London, Singapore and New York.
• Shanghai and Dubai are budding IFSCs.

Why IFSCs? (Advantages of IFSCs)

• They seek to attract overseas investors by bringing financial services that are currently being carried outside India by overseas financial institutions.
• In this age of globalization, IFSCs serve many purposes including fundraising, global tax management and corporate treasury management.
• An IFSC facilitates the rerouting of financial services and transactions that are currently carried out in offshore financial centres by Indian corporate entities and overseas branches/subsidiaries of financial institutions (such as banks, insurance companies, etc.) to India.
• The business and regulatory environment offered by an IFSC in India would be comparable to that of London, New  York, etc. attracting investors.
• It can also provide enhanced access to global financial markets for Indian corporates.
• There are also many tax benefits for entities set up in the IFSC.
• IFSCs help in the creation of fintech hubs. With a large number of Indians outside India working in fintechs, India can be positioned as a fintech hub.

Services an IFSC can provide

1. Fundraising services for corporations, individuals and governments.
2. Wealth management.
3. Asset management and global portfolio diversification undertaken by pension/mutual funds and insurance firms.
4. Global tax management and cross-border tax liability optimisation, providing a business opportunity for financial intermediaries, law firms and accountants.
5. Risk management operations (insurance and reinsurance).
6. Global and regional corporate treasury management operations.
7. Mergers and acquisitions between trans-national corporations.

What does an IFSC require?
IFSCs have six major building blocks as seen in the Shanghai International Financial Centre and the Dubai International Financial Centre, both of which are located within Special Economic Zones (SEZs).

Legal Provision for IFSC in India

The Special Economic Zone Act, 2005 provides for the establishment of an IFSC in India. It would be prudent to set up an IFSC within an SEZ since there are several restrictions on the financial sector in India. An SEZ can serve as a testing ground for financial sector reforms before they are rolled out in the entire nation. As per the SEZ Act, the government approved GIFT City as a Multi Services Special Economic Zone (“GIFT SEZ”) in Gandhinagar.

Additional Information about IFSCs
There are three models of IFSCs currently seen.
Model 1: Full-service finance centres like Tokyo and New York with their own large domestic economies along with a good regulatory and legal backup.
Model 2: Offshore financial centres such as Mauritius which do not have a robust domestic economy but have international access and acceptance.
Model 3: A hybrid model like Singapore which can boast of both domestic and international business.
India has opted to go for the third hybrid model.