Weekly Current Affairs (15th August to 21st August 2023) | Current Affairs: Daily, Weekly & Monthly - CLAT PDF Download

ISRO's Inaugural Solar Mission - Aditya-L1

India is gearing up to launch its maiden solar mission, Aditya-L1, anticipated to occur in either late August or early September. This mission holds great significance as it marks India's pioneering endeavor to study the Sun from a space-based observatory.

Key Highlights of Aditya-L1

• First-of-its-Kind Solar Observatory: Aditya-L1 is poised to become India's inaugural space-based observatory dedicated to studying the Sun. This landmark mission will enable scientists to gather unprecedented insights into the solar activities and phenomena.
• Strategic Orbital Positioning: The spacecraft will be strategically positioned approximately 1.5 million kilometers away from Earth in a halo orbit around the L1 point. This specific orbital location provides a distinct advantage for observing solar activities and their intricate connections with space weather in real-time.
• Multifaceted Payloads: Aditya-L1 is equipped with an array of seven sophisticated payloads designed for comprehensive solar exploration. These payloads are meticulously tailored to study various layers of the Sun, including the photosphere, chromosphere, and the enigmatic outer corona. This ambitious scientific mission leverages electromagnetic, particle, and magnetic field detectors to capture a holistic understanding of the Sun's behavior.
• Direct Solar Observation: Among the seven payloads, four are dedicated to directly observing the Sun. These instruments are instrumental in capturing intricate details and behaviors exhibited by the Sun's surface and outer layers, providing critical data for solar research.
• In-situ Studies at L1: Three additional payloads onboard Aditya-L1 are primed for conducting in-situ studies of particles and fields at the L1 position. This position, characterized by its vantage point between the Earth and the Sun, offers a unique opportunity to analyze the solar environment and gain insights into its complex dynamics.

Inaugural WHO Traditional Medicine Global Summit

The inaugural WHO Traditional Medicine Global Summit is scheduled to take place in Gandhinagar, Gujarat, reflecting the growing global recognition of traditional medicine's role in healthcare. This summit represents a significant milestone in promoting traditional medicine and its integration into modern healthcare practices.

Key Highlights of the WHO Traditional Medicine Global Summit

• Global Centre for Traditional Medicine: In 2022, in collaboration with the Government of India, the World Health Organization (WHO) established the Global Centre for Traditional Medicine in Jamnagar, Gujarat. This pioneering center assumes a leadership role in addressing global health issues pertaining to traditional medicine. It extends crucial support to member countries in shaping policies concerning traditional medicine research, practices, and public health initiatives.
• Global Hub for Traditional Medicine: The Global Centre for Traditional Medicine in Jamnagar, Gujarat, stands as the world's first and only global outpost dedicated to traditional medicine. This distinction underscores its critical role in advancing the cause of traditional medicine on the international stage.
• Convergence of Stakeholders: One of the primary objectives of the WHO Traditional Medicine Global Summit is to bring together a diverse spectrum of stakeholders. This includes traditional medicine practitioners, policymakers, academics, and various experts in the field. By providing a common platform, the summit aims to facilitate the sharing of best practices, evidence-based research, and innovative approaches related to how traditional medicine contributes to health and sustainable development.
• Historical Significance of Traditional Medicine: Traditional and complementary medicine has played an integral role in community health for centuries. It has significantly influenced modern medical knowledge. In fact, approximately 40% of today's medicines have their origins in natural sources, including well-known drugs such as aspirin and artemisinin.
• Global Interest in Traditional Medicine: Currently, 170 countries have informed the WHO about their utilization of traditional medicine. These nations seek evidence-based data and guidance to formulate safe, cost-effective, and equitable policies and regulations related to traditional medicine. This global interest underscores the relevance and importance of traditional medicine in contemporary healthcare.

Empowering Indigenous Peoples and Local Communities through the Inclusive Conservation Initiative (ICI)

A report has been released, shedding light on the initial phase of the Inclusive Conservation Initiative (ICI). This initiative carries the promise of enhancing the efforts of Indigenous Peoples and Local Communities (IPs and LCs) in safeguarding our land, waters, and natural resources, thereby contributing to global environmental benefits.

Key Highlights of the Inclusive Conservation Initiative (ICI)

• Funding Challenges Persists: The report underscores that while funding commitments have increased for Indigenous Peoples and local communities, their overall funding situation hasn't significantly improved. Despite rising awareness and commitments to support conservation efforts led by IPs and LCs, the financial backing they receive remains limited.
• Inadequate Support for Climate Change Adaptation: A concerning statistic highlighted in the report is that donors have allocated less than 1% of funds for addressing climate change impacts and adaptations to Indigenous Peoples and local communities. This disparity underscores the need for equitable funding to enable these communities to adapt to climate challenges effectively.
• Endorsement by Global Environment Facility (GEF): The Inclusive Conservation Initiative (ICI) gained formal endorsement from the Global Environment Facility (GEF) in 2022. This recognition signifies a global commitment to support and amplify the conservation efforts led by IPs and LCs.
• Scope of the Initiative: ICI is designed to bolster the endeavors of Indigenous Peoples and Local Communities in safeguarding approximately 7.5 million hectares of landscapes, seascapes, and territories characterized by high biodiversity and invaluable ecosystems. The initiative recognizes the critical role played by IPs and LCs in maintaining these pristine environments.
• Technical Support and Supervision: ICI benefits from the technical support and supervision of renowned organizations, including Conservation International and the International Union for Conservation of Nature (IUCN). This collaboration ensures the effective implementation and management of the initiative.
• Guardians of Earth's Resources: Indigenous Peoples and local communities, comprising just 5% of the global population, shoulder the responsibility of stewarding 25% of the world's land and safeguarding 40% of intact ecosystems on our planet. This statistic underscores their indispensable role in preserving our natural heritage.
• Financial Support for Sustainability: The primary objective of ICI is to provide vital financial support to Indigenous and locally-led initiatives. These funds will empower these communities to enhance and expand their sustainable management practices for their territories, ensuring the preservation of invaluable ecosystems and biodiversity.

Empowering Artisans and Craftspersons through PM Vishwakarma Scheme

The Cabinet Committee on Economic Affairs has granted approval for the implementation of the "PM Vishwakarma" Scheme, signifying a significant initiative to support artisans and craftspeople across India. This Central Sector Scheme is aimed at preserving and nurturing traditional skills, focusing on the Guru-Shishya parampara (teacher-student tradition) and family-based practices.

Key Highlights of the PM Vishwakarma Scheme

• Preserving Traditional Skills: PM Vishwakarma aims to strengthen and nurture the age-old Guru-Shishya parampara, which represents the transfer of traditional skills from one generation to the next. It specifically focuses on artisans and craftspeople who work with their hands and tools.
• Enhancing Product Quality and Reach: The scheme's core objective is to elevate the quality and expand the reach of products and services created by artisans and craftspeople. It seeks to integrate these skilled individuals into domestic and global value chains, enabling them to participate more effectively in the economy.
• Pan-India Coverage: PM Vishwakarma will extend its support to artisans and craftspeople in both rural and urban areas across India. This comprehensive approach ensures that the benefits of the scheme reach diverse communities.
• Coverage of 18 Traditional Trades: The scheme encompasses 18 traditional trades, encompassing a wide range of skills. These trades include carpentry, boat-making, blacksmithing, pottery, sculpting, masonry, and various others. This inclusivity ensures that a diverse spectrum of artisans can benefit from the scheme.
• Recognition and Support: Artisans and craftspeople enrolled in PM Vishwakarma will receive formal recognition through a certificate and an ID card bearing the scheme's name. This recognition not only honors their craftsmanship but also facilitates access to various benefits.
• Credit Support with Concessional Interest: The scheme includes provisions for credit support, offering up to ₹1 lakh (first tranche) and ₹2 lakh (second tranche) at a concessional interest rate of 5%. This financial support empowers artisans to expand their businesses.
• Skill Upgradation and Marketing Support: PM Vishwakarma emphasizes skill development by providing training programs, incentives for toolkits, support for digital transactions, and assistance in marketing their products. This comprehensive approach ensures holistic development.
• Stipends and Modern Tools: Participants in skilling programs, which include both basic and advanced training, will receive a stipend of ₹500 per day during their training period. Additionally, beneficiaries can receive up to ₹15,000 to purchase modern tools, enhancing their efficiency and productivity.

Enhancing Urban Mobility and Promoting Green Transport with PM-eBus Sewa Scheme

The Union Cabinet has granted approval for the implementation of the PM-eBus Sewa Scheme, signaling a significant step towards improving urban mobility and transitioning to eco-friendly public transport in cities across India. This scheme focuses on the deployment of electric buses (e-buses) as a sustainable and zero-emission mode of urban transportation.

Key Highlights of the PM-eBus Sewa Scheme

• Promoting Zero-Emission Urban Transport: The PM-eBus Sewa Scheme centers on the deployment of e-buses, which exclusively rely on zero-emissions electric power for propulsion and accessory systems. This approach aligns with the objective of reducing carbon emissions and promoting green mobility in urban areas.
• City Coverage: The scheme will encompass cities with a population of three lakhs and above, as per the 2011 census. It will include all capital cities of Union Territories, cities in the North Eastern Region, and hilly states. Priority will be given to cities that lack organized bus services.
• Public-Private Partnership (PPP) Model: In a total of 169 cities, the scheme plans to deploy 10,000 e-buses using a public-private partnership (PPP) model. This collaboration ensures efficient implementation and management of the e-bus services.
• Infrastructure Development: The scheme includes infrastructure development or upgrades to support the deployment of e-buses. This encompasses the creation of essential infrastructure, such as substations, to facilitate behind-the-meter power supply for e-buses.
• Green Urban Mobility Initiatives: In an additional 181 cities, the scheme focuses on infrastructure upgrades as part of green urban mobility initiatives. This includes enhancing bus priority lanes, creating multimodal interchange facilities, implementing automated fare collection systems, and establishing charging infrastructure.
• Responsibility and Subsidies: States or cities will be responsible for operating the e-bus services and making payments to the bus operators. The Central government will provide subsidies as specified in the scheme to support these bus operations.
• Job Creation: The scheme is anticipated to generate approximately 45,000 to 55,000 direct jobs, thereby contributing to employment opportunities and economic development.
• Environmental Benefits: The adoption of electric mobility services, such as e-buses, is expected to reduce noise and air pollution in Indian cities. Additionally, it will play a crucial role in curbing carbon emissions, contributing to a cleaner and healthier urban environment.
• Economies of Scale: The scheme's approach of aggregating procurement is expected to bring economies of scale to the purchase of electric buses, making them more affordable and accessible for cities.

Enhancing Ocean Safety and Marine Services with the 'SAMUDRA' Mobile App

The Indian National Centre for Ocean Information Services (INCOIS) has launched a groundbreaking mobile application named 'SAMUDRA,' short for Smart Access to Marine Users for Ocean Data Resources and Advisories. This app is designed to provide comprehensive ocean-related services, catering to the needs of seafarers and the fishing community.

Key Highlights of the 'SAMUDRA' Mobile App

• Comprehensive Ocean Information: The 'SAMUDRA' mobile app serves as a comprehensive source of ocean-related information and services. It offers a wide array of data and advisories crucial for individuals and communities engaged in marine activities.
• Empowering Users with Real-Time Updates: 'SAMUDRA' provides users with real-time updates and critical alerts regarding oceanic disasters. This includes information on tsunamis, storm surges, high waves, and swell surge alerts. These alerts empower individuals and communities to stay informed and take necessary precautions to safeguard lives and property.
• Benefitting the Fishing Community: The app is particularly beneficial to the fishing community, as it disseminates Potential Fishing Zone (PFZ) advisories. These advisories guide fishermen to probable fish aggregation locations, enhancing their efficiency and safety during fishing expeditions.
• Promoting Ocean Safety: By offering timely alerts and ocean-related information, 'SAMUDRA' contributes significantly to ocean safety. It enables seafarers and the fishing community to make informed decisions and take proactive measures to mitigate risks associated with adverse oceanic conditions.

India and WHO Join Hands for Global Initiative on Digital Health

In a collaborative effort, India and the World Health Organization (WHO) are set to launch the Global Initiative on Digital Health, signifying a significant step towards harnessing digital technologies for the advancement of global healthcare. This initiative aims to promote data convergence, enhance the interoperability of health platforms, and foster investments in the digital health sector worldwide.

Key Highlights of the Global Initiative on Digital Health

• India-WHO Collaboration: The Global Initiative on Digital Health represents a collaborative endeavor between India and the World Health Organization (WHO). This partnership underscores the commitment to leveraging digital technologies to transform healthcare on a global scale.
• Facilitating Data Convergence: One of the primary objectives of this initiative is to promote data convergence in the field of healthcare. It seeks to integrate and harmonize health data from various sources and platforms, fostering a holistic understanding of global health challenges.
• Enhancing Health Platform Interoperability: The initiative places a strong emphasis on enhancing the interoperability of health platforms. This facilitates the seamless exchange of health information and ensures that different digital health solutions can work together effectively.

Digital Platform Components

The Global Initiative on Digital Health will include a digital platform with several key components:

• Investment Tracker: This tracker will monitor and record investments in the digital health space globally, providing valuable insights into funding trends and priorities.
• Ask Tracker: It will serve as a tool to understand the specific needs of different stakeholders in the digital health ecosystem, helping match demand with appropriate products and services.
• Library of Digital Health Platforms: This digital repository will house information on existing digital health platforms, fostering knowledge-sharing and collaboration.
• Universal Health Convergence: By facilitating data sharing, interoperability, and informed investments, this initiative aims to contribute to universal health convergence. It seeks to improve the delivery of healthcare services, making them more accessible and effective worldwide.

Enhancing Flood Preparedness with the 'Floodwatch' App

In a bid to bolster flood preparedness and provide timely forecasts, the Central Water Commission (CWC) has introduced the 'Floodwatch' mobile application. This innovative app utilizes cutting-edge technologies such as satellite data analysis, mathematical modeling, and real-time monitoring to deliver accurate and timely flood forecasts, helping communities stay vigilant and prepared.

Key Highlights of the 'Floodwatch' App

• Advanced Flood Forecasting: The primary purpose of the 'Floodwatch' app is to provide advance forecasts of flood risks, enabling communities to prepare a day in advance. This proactive approach is crucial in mitigating flood-related risks and damages.
• Seven-Day Flood Advisory: 'Floodwatch' offers a seven-day advisory on the likelihood of floods at various monitoring stations across the country where the CWC maintains measurement gauges. This extended forecast period ensures that communities have ample time to take necessary precautions.
• Utilization of Advanced Technologies: The app harnesses advanced technologies, including satellite data analysis, mathematical modeling, and real-time monitoring, to ensure the accuracy of its flood forecasts. These technologies contribute to more reliable and data-driven predictions.
• Interactive Map Interface: 'Floodwatch' features an interactive map of India with colored circles representing water stations across the country. These circles indicate the current risk level of flooding. A 'green' circle signifies 'normal,' 'yellow' represents 'above normal,' 'orange' indicates 'severe,' and 'red' signifies 'extreme' flood risk.
• Station-Specific Information: Users can click on the circle corresponding to a monitoring station to access detailed information, including the current water level, danger level, and warning level. The warnings are available in both English and Hindi, with the option for voice-enabled prompts.
• State-wise and Basin-wide Forecast: The app also offers State-wise and basin-wide flood forecasts up to 24 hours in advance or flood advisories covering a span of seven days. Users can select specific stations to access this crucial information.
• Empowering Communities: The 'Floodwatch' app represents a significant leap in utilizing smartphones to provide the public with up-to-date flood situation data and accurate forecasts. It empowers communities to take proactive measures to protect lives and property.

RBI's 'UDGAM' Portal: Unlocking Unclaimed Deposits with Ease

The Reserve Bank of India (RBI) has unveiled the 'UDGAM' web portal, which stands for 'Unclaimed Deposits – Gateway to Access information.' This innovative portal serves as a user-friendly platform designed to assist individuals in locating their unclaimed deposits or dormant accounts and taking the necessary steps to claim their funds or reactivate their accounts. Developed in collaboration with Reserve Bank Information Technology Pvt Ltd (ReBIT), Indian Financial Technology & Allied Services (IFTAS), and participating banks, the UDGAM portal aims to provide greater financial inclusivity and convenience.

Key Highlights of the UDGAM Portal

• Unclaimed Deposits Made Accessible: The primary objective of the UDGAM portal is to facilitate easy access to information regarding unclaimed deposits or dormant accounts. This empowers users to identify their unclaimed funds held with banks and take appropriate action.
• Empowering Users: The UDGAM portal is designed to empower individuals to either claim the deposit amount or reactivate their dormant deposit accounts with their respective banks. This initiative ensures that individuals have control over their financial assets, promoting financial literacy and inclusivity.
• Collaborative Development: The UDGAM portal is the result of collaborative efforts between the Reserve Bank of India, Reserve Bank Information Technology Pvt Ltd (ReBIT), Indian Financial Technology & Allied Services (IFTAS), and participating banks. This partnership ensures the effectiveness and reliability of the platform.
• Phase-wise Implementation: Initially, the UDGAM portal allows users to access details of their unclaimed deposits in relation to seven banks that are currently available on the platform. However, to expand its reach and include more banks, the search facility for remaining banks will be gradually introduced in a phased manner. This phased approach ensures the systematic rollout of the portal's services.

Pradhan Mantri Jan Dhan Yojana (PMJDY): Bridging Financial Inclusion for All

The Pradhan Mantri Jan Dhan Yojana (PMJDY), a flagship initiative under the National Mission on Financial Inclusion, has achieved a significant milestone by surpassing 50 crore Jan Dhan accounts. Launched in 2014, PMJDY has played a transformative role in the Indian financial landscape over nearly nine years. This scheme extends numerous benefits to account holders, including zero minimum balance requirements, free RuPay debit cards with accident insurance, and overdraft facilities, thus fostering financial inclusivity and empowerment.

Key Highlights of PMJDY

• Comprehensive Financial Inclusion Mission: PMJDY, commonly known as the National Mission on Financial Inclusion, was introduced to ensure that every Indian has access to formal banking services. Its success is attributed to its holistic approach in connecting the last mile with the formal banking system through technology, collaboration, and innovation.
• Zero Balance Accounts: One of the key features of PMJDY is its provision of bank accounts without the obligation of maintaining a minimum balance. This removes a significant barrier for individuals to access banking services.
• RuPay Debit Cards with Insurance: PMJDY account holders receive free RuPay debit cards, which come with built-in accident insurance coverage of Rs. 2 lakh. This not only encourages account usage but also provides a safety net for individuals and their families.
• Overdraft Facility: PMJDY also offers an overdraft facility of up to Rs. 10,000, providing individuals with access to credit when needed. This feature promotes financial resilience among account holders.
• Changing the Financial Landscape: PMJDY has brought about a transformative change in India's financial landscape, driving near saturation of bank accounts among adults. It has empowered individuals across the nation to become a part of the formal financial system.
• Gender Inclusivity: Of the total PMJDY accounts, 56% are held by women, emphasizing the scheme's focus on gender inclusivity and financial empowerment for women.
• Rural and Semi-urban Reach: Approximately 67% of PMJDY accounts have been opened in rural and semi-urban areas, making banking services more accessible to individuals residing in these regions.
• Substantial Deposits and DBT Benefits: PMJDY accounts have amassed deposits exceeding Rs. 2.03 lakh crore. More than 5.5 crore PMJDY accounts are beneficiaries of Direct Benefit Transfer (DBT) benefits, making government subsidies and financial assistance more efficient and transparent.
• Average Balance and RuPay Cards: The average balance in PMJDY accounts stands at Rs. 4,076, showcasing active account usage. Additionally, about 34 crore RuPay debit cards have been issued to PMJDY account holders free of cost.

RBI's Revised Guidelines on Penal Charges for Loan Borrowers: Ensuring Fair Practices

The Reserve Bank of India (RBI) has introduced a fresh set of guidelines aimed at regulating the imposition of penal charges on loan borrowers by banks and other regulated entities (REs). These guidelines have been introduced in response to reports highlighting instances where banks applied penal rates of interest over and above the prescribed rates in cases of borrower defaults or non-compliance with loan terms. The RBI's revised guidelines aim to ensure fairness and transparency in penal charges levied on borrowers.

Key Highlights of RBI's Guidelines

• Introduction of 'Penal Charges': According to the new RBI guidelines, penalties previously categorized as 'penal interest' due to borrower defaults or non-compliance with loan terms will now be referred to as 'penal charges.' This change reflects a shift from an interest-based approach to a charge-based one.
• Elimination of Ad-Hoc Penal Rates: Lending entities are no longer permitted to impose ad-hoc additional penal rates of interest over and above the applicable interest rate. This ensures that penal charges are applied in a standardized and non-arbitrary manner.
• Illustration of Penal Interest: To illustrate the previous practice, consider a borrower with a monthly EMI payment of Rs. 1,000 at a 10% interest rate. If they fail to make a timely EMI payment, they might be subject to an additional interest payment of 24% per annum (or 2% per month) over and above the interest component (at 10% of the principal amount) payable for that month.
• Transition to 'Penal Charges': RBI's guidelines mandate that the term 'penal interest' (e.g., 2% per annum in the illustration) be replaced with 'penal charge,' with no additional component to the interest rate. This change ensures a transparent and standardized approach to penal charges.
• Separate Levying of Penal Charges: Penal charges must be levied separately and not added to the principal outstanding amount. This separation prevents the capitalization of penal charges, ensuring that they remain distinct from the principal loan amount.
• Proportional Penal Charges: Lending entities are required to determine the quantum of penal charges in a manner that is proportional to the defaults or non-compliance with material terms and conditions of a loan contract. However, these charges must not exceed a specified threshold.
• Non-Discriminatory Approach: Importantly, the guidelines stress that penal charges should not be discriminatory within a particular loan or product category. This requirement ensures that borrowers are treated fairly and equitably.

3D Printing: Shaping the Future of Manufacturing

India marked a significant milestone in the realm of technology and innovation with the inauguration of its first 3D printed Post Office in Bengaluru's Cambridge Layout. 3D printing, a revolutionary manufacturing process, has been gaining momentum globally, offering a plethora of possibilities for creating three-dimensional objects with precision and efficiency.

Understanding 3D Printing

• Additive Manufacturing: 3D printing, also known as additive manufacturing, is a process that utilizes computer-generated designs to create three-dimensional objects layer by layer. Unlike traditional manufacturing methods, which often involve cutting or subtracting material, 3D printing adds material in successive layers to build up the final object.
• Inventor and History: The concept of 3D printing was conceived by Charles W. Hull in the 1980s. His invention paved the way for a groundbreaking technology that is now transforming industries worldwide.
• The 3D Printing Process: To carry out 3D printing, a computer connected to a 3D printer is required. First, a 3D model of the desired object is created using computer-aided design (CAD) software. Then, by simply clicking 'print,' the 3D printer begins the construction process.
• Layer-by-Layer Construction: 3D printers operate by constructing objects layer by layer, a process that stands in stark contrast to traditional subtractive manufacturing. They build from the bottom up, adding one layer atop another until the object takes shape as envisioned in the digital model.
• Inkjet Printer Comparison: In a direct 3D printing process, the 3D printer functions somewhat like a traditional inkjet printer. A nozzle moves back and forth while dispensing a material, typically a wax or plastic-like polymer, layer by layer. Each layer is allowed to dry or solidify before the next layer is added.

Applications and Potential

The capabilities of 3D printing extend across various industries and sectors:

• Manufacturing: 3D printing is revolutionizing manufacturing by enabling the production of complex, customized, and intricate parts and products. It reduces waste and allows for rapid prototyping.
• Medicine: Medical professionals are utilizing 3D printing to create patient-specific implants, prosthetics, and even organs. It has the potential to revolutionize healthcare.
• Aerospace: The aerospace industry leverages 3D printing for lightweight, high-strength components, reducing aircraft weight and improving fuel efficiency.
• Art and Design: Artists and designers use 3D printing to bring their creative visions to life, creating unique sculptures, jewelry, and fashion pieces.
• Education: 3D printing is becoming a vital tool in education, allowing students to grasp complex concepts and engage in hands-on learning.

Empowering Borrowers: RBI's Move from Floating to Fixed Rate Regime

The Reserve Bank of India (RBI) has introduced a significant policy change that empowers borrowers by allowing them to switch from a floating rate to a fixed rate regime at the time of resetting interest rates. This move aims to enhance transparency, protect borrowers' interests, and improve monetary transmission in the lending industry.

Understanding the Transition

• Clear Communication: Regulated entities (REs), including banks and NBFCs, will be required to clearly communicate to borrowers, at the time of sanction, the potential impact of a change in benchmark interest rates on their loans. This includes explaining how such changes could affect Equated Monthly Installments (EMIs) and the loan's tenor.
• Immediate Notification: In the event of an increase in EMIs, tenor, or both, borrowers will receive immediate notification through appropriate channels.
• Switching to Fixed Rate: At the time of interest rate reset, borrowers will have the option to switch to a fixed rate, following the RE's board-approved policy. This policy will also specify the number of times a borrower can switch during the loan's tenor.
• Disclosure of Charges: REs must transparently disclose all applicable charges for switching loans from floating to fixed rates, along with any other service fees or administrative costs. This information will be included in the sanction letter and updated as necessary.
• Flexible Options: Borrowers will also have the choice to opt for an increase in EMI, an extension of the loan tenor, or a combination of both. Additionally, borrowers can prepay partially or in full at any point during the loan's tenor, albeit with foreclosure charges.

Addressing Unreasonable Practices

• Elongation of Tenor: RBI's supervisory reviews and public feedback have exposed instances of lenders unreasonably extending the tenor of floating rate loans without proper consent or communication to borrowers.
• Interest Rate Changes: Banks have the flexibility to alter interest rates by adjusting internal benchmark rates and spreads during the loan term, which can disadvantage borrowers and hinder monetary transmission.
• Lack of Refinancing Options: While borrowers theoretically have the option to refinance floating rate loans with other banks, practical challenges arise. Different banks may have varying internal benchmarks and reset mechanisms, limiting borrowers' ability to switch.

Empowering Borrowers and Enhancing Transparency

RBI's transition from floating to fixed rate regimes underscores its commitment to promoting fairness and transparency in lending practices. Borrowers are now equipped with greater control over their loans, allowing them to make informed decisions and protect their financial interests. As this policy change takes root, it is expected to foster a more equitable lending landscape and empower borrowers to make choices that align with their financial goals.