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  • What is a Narco Test?

    narco test

    A court in Saket, New Delhi, has allowed Delhi Police to conduct a narco test on a psychopath accused of raping and killing his live-in partner.

    What is a Narco Test?

    • In a ‘narco’ or narcoanalysis test, a drug called sodium pentothal is injected into the body of the accused.
    • This transports the accused to a hypnotic or sedated state, in which their imagination is neutralised.
    • In this hypnotic state, the accused is understood as being incapable of lying, and is expected to divulge information that is true.
    • Sodium pentothal or sodium thiopental is a fast-acting, short duration anaesthetic, which is used in larger doses to sedate patients during surgery.
    • It belongs to the barbiturate class of drugs that act on the central nervous system as depressants.

    History of its use

    • Because the drug is believed to weaken the subject’s resolve to lie, it is sometimes referred to as a “truth serum”.
    • It is said to have been used by intelligence operatives during World War II.

    Reasons to use such tests

    • In recent decades, investigating agencies have sought to employ these tests in investigation, which are sometimes seen as being a “softer alternative” to torture or “third degree” to extract the truth from suspects.
    • However, neither method has been proven scientifically to have a 100% success rate, and remain contentious in the medical field as well.

    Restrictions on these tests

    • No self-incrimination: The Bench took into consideration international norms on human rights, the right to a fair trial, and the right against self-incrimination under Article 20(3) of the Constitution.
    • Consent of the accused: In ‘Selvi & Ors vs. State of Karnataka & Anr’ (2010), a Supreme Court Bench comprising then CJI ruled that no lie detector tests should be administered “except on the basis of consent of the accused”. The subject’s consent should be recorded before a judicial magistrate, the court said.
    • Legal assistance to such convicts: Those who volunteer must have access to a lawyer, and have the physical, emotional, and legal implications of the test explained to them by police and the lawyer.
    • Guidelines at place: It said that the ‘Guidelines for the Administration of Polygraph Test on an Accused’ published by the National Human Rights Commission in 2000, must be strictly followed.

    Can the results of these tests be considered as “confessions”?

    • Not a confession: Because those in a drugged-induced state cannot exercise a choice in answering questions that are put to them.
    • Assumed as evidence: However, any information or material subsequently discovered with the help of such a voluntarily-taken test can be admitted as evidence.
    • Supports investigation: It reveals the location of, say, a physical piece of evidence (which is often something like a murder weapon) in the course of the test.

     

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  • National Investment and Infrastructure Fund (NIIF)

    Finance Minister has urged the National Investment and Infrastructure Fund (NIIF) to expand its operations and explore ways to crowd in private capital for projects under the National Infrastructure Pipeline, PM Gati Shakti and National Infrastructure Corridor.

    What is NIIF?

    • National Investment and Infrastructure Fund (NIIF) is India’s first infrastructure specific investment fund or a sovereign wealth fund that was set up in February 2015.
    • The objective behind creating this fund was to maximize economic impact mainly through infrastructure investment in commercially viable projects, both Greenfield and Brownfield.
    • It was proposed to be established as an Alternative Investment Fund to provide long tenor capital for infrastructure projects with an inflow of ₹20,000 crore from the GoI.
    • It was registered with SEBI as Category II Alternative Investment Fund.

    Types of funds in NIIF

    • NIIF manages three funds: Master Fund, Fund of Funds and Strategic Fund.
    • The funds were set up to make investments in India by raising capital from domestic and international institutional investors.
    1. Master Fund: It is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.
    2. Fund of Funds: The Fund of Funds anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors.
    3. Strategic Opportunities Fund: It is registered as an Alternative Investment Fund II under SEBI in India. Its objective is to invest largely in equity and equity-linked instruments. It has been established to provide long-term capital to strategic and growth oriented sectors in the country with the aim to build domestic leaders.

    Functions of NIIF

    The functions of NIIF are as follows:

    1. Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
    2. Servicing of the investors of NIIF.
    3. Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
    4. Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
    5. Preparing a shelf of infrastructure projects and providing advisory service

     

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  • What is the Koronivia Joint Work on Agriculture (KJWA)?

    India has expressed its concern over the draft decision text to implement the Koronivia Joint Work on Agriculture.

    What is the news?

    • India said developed countries are blocking a pro-poor and pro-farmer decision by insisting on expanding the scope for mitigation to agriculture.
    • Developed countries are thereby compromising the very foundation of food security in the world.

    What is the Koronivia Joint Work?

    • The KJWA is a decision under the United Nations Framework Convention on Climate Change (UNFCCC).
    • It seeks to recognize the unique potential of agriculture in tackling climate change.
    • It emphasizes reducing emissions of greenhouse gases due to the agriculture sector.
    • The Koronivia decision addresses six interrelated topics on soils, nutrient use, water, livestock, methods for assessing adaptation, and the socio-economic and food security dimensions of climate change across the agricultural sectors.

    India’s arguments against Koronivia joint work

    • India said that agricultural emissions are not “luxury” emissions but “survival” emissions of the poor.
    • The world is facing a climate crisis today because of the excessive historic cumulative emissions by the developed nations.
    • These nations are unable to reduce their emissions domestically by any worthwhile change in their lifestyles.
    • Rather, they are searching for cheaper solutions abroad.
    • In most developing countries across the world, agriculture is done by small and marginal farmers who toil hard and brave the vagaries of extreme weather and climate variability to ensure food security.

    Back2Basics: Agricultural Emissions

    koronivia

    • Farms emitted 6 billion tonnes of GHGs in 2011, or about 13 percent of total global emissions.
    • That makes the agricultural sector the world’s second-largest emitter, after the energy sector (which includes emissions from power generation and transport).
    • Most farm-related emissions come in the form of methane (CH4) and nitrous oxide (N2O).
    • Cattle belching (CH4) and the addition of natural or synthetic fertilizers and wastes to soils (N2O) represent the largest sources, making up 65 percent of agricultural emissions globally.
    • Smaller sources include manure management, rice cultivation, field burning of crop residues, and fuel use on farms.

     

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  • Uda Devi: A Dalit freedom fighter

    uda devi

    On November 16, events to commemorate the martyrdom of Uda Devi, a freedom fighter from the Pasi community, were held at various places in Uttar Pradesh.

    Who was Uda Devi?

    • Uda Devi is remembered not only for her stories of valour but also for her skill as a leader who managed to mobilise people — especially Dalit women — to take up arms against the British.
    • Born in Ujirao, Lucknow, she was part of the royal guard of Begum Hazrat Mahal of Awadh.
    • Her husband, Makka Pasi, worked as a foot soldier in the army of Awadh’s Nawab, Wajid Ali Shah.
    • Hazrat Mahal’s palace had several women belonging to marginalised communities, and their occupation was mostly to take care of the needs of the royalty.
    • Some of them, who showed promise, were also trained as warriors. Uda Devi was one of them.

    Her legend

    • Amid the revolt of 1857, on June 10, at Chinhat near Ismailganj, a battle was fought between the army of Lucknow and the British troops led by Henry Lawrence, in which Makka Pasi lost his life.
    • The death of her husband spurred Uda Devi on to take up a more active role in the mutiny.
    • On November 16, 1857, Uda Devi was among the soldiers who clashed with the British regiment stationed near the Gomti River.
    • Although not much of the fight has been documented in history, it is said that Uda Devi killed at least three dozen British soldiers from atop a tree before she could be spotted.

    Can you recall the Eka Movement of 1921 from your modern history references? If not, take your time to revise. Read about the contribution of Madari Pasi in this movement.

     

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  • Festival in news: Cuttack Baliyatra

    baliyatra

    In his address to the Indian diaspora in Bali on the sidelines of the G20 summit, PM Modi mentioned the annual Baliyatra on the banks of the Mahanadi in Cuttack, which celebrates the ancient trade relations between India and Indonesia.

    Baliyatra

    • Baliyatra/ Balijatra, literally ‘voyage to Bali’, is one of India’s largest open-air fairs.
    • It is organised every year to commemorate the 2,000-year-old maritime and cultural links between ancient Kalinga (today’s Odisha) and Bali and other South and Southeast Asian regions.

    Origins of the festival

    • The origins of the festival, which begins on Kartik Purnima (full moon night in the month of Kartik) can be traced back more than 1,000 years.
    • The Bay of Bengal region had several ports, and sadhavas (traders) traditionally began their voyage across the sea on this auspicious day, when the winds were favourable for the boats, known as boita, to sail.
    • The traders would set sail to distant lands of Bali, as well as Java (at the time of the voyage known as “Yawadvipa”), Sumatra, Borneo (all in Indonesia), and Sri Lanka (formerly Ceylon) for trade and cultural expansion.
    • According to historians, popular items of trade between Kalinga and Southeast Asia included pepper, cinnamon, cardamom, silk, camphor, gold, and jewellery.
    • Even today, thousands of people across Odisha sail decorative miniature boats made of banana stems, paper, or thermocol to celebrate boita bandana, or the worshipping of the boats.

     

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  • BASIC nations oppose ‘Carbon Border Tax’

    carbon

    BASIC countries that includes India has jointly stated that carbon border taxes, that could result in market distortion and aggravate the trust deficit amongst parties, must be avoided.

    EU proposes, BASIC opposes

    • The European Union has proposed a policy — called the Carbon Border Adjustment Mechanism– to tax products such as cement and steel that are extremely carbon intensive, with effect from 2026.
    • BASIC, a group constituting Brazil, India, South Africa and China have opposed this move.
    • These are large economies that are significantly dependent on coal, has for several years voiced common concerns and reiterated their right to use fossil fuel.

    What is Carbon Pricing?

    • Carbon pricing is an approach to reducing carbon emissions that uses market mechanisms to pass the cost of emitting to emitters.
    • Its goal is to discourage the use of fossil fuels, address the causes of the climate crisis and meet national and international agreements.
    • Well-designed carbon pricing can change the behavior of consumers, businesses and investors while encouraging technological innovation and generating revenue that can be used productively.
    • There are a few carbon pricing instruments, such as a carbon tax and cap-and-trade programmes.

    What is Carbon Border Tax?

    • A carbon border tax (CBT) is a tax on carbon emissions attributed to imported goods that have not been carbon-taxed at source.
    • The carbon border tax proposal is part of the European Commission’s European Green Deal that endeavours to make Europe the first climate-neutral continent by 2050.

    Objective:

    • To ‘incentivize’ greener manufacturing around the world and create parity with European manufacturers who are already subjected to substantial carbon levies.

    A move to benefit local EU manufacturers

    The carbon border tax has wide appeal in Europe. It is supported by the new president of the European Commission.

    • A carbon border tax is able to protect a country’s local manufacturers, motivating them to adhere to green regulations.
    • Many EU companies are at a cost disadvantage as they have been paying a carbon border tax and for carbon emissions since 2005 under the EU’s Emissions Trading System.
    • The new carbon border tax can therefore lead to a more level playing field against importers, especially those from nations with more lax environmental standards.

    What could the new proposal mean politically?

    • Notably, China’s continuing reliance on non-renewable energy to power its economy leaves it particularly vulnerable in this matter.
    • For example, given that China produces steel with blast furnaces that release a large amount of carbon, it will have to pay an additional layer of carbon border tax, which will increase its costs and its market price.
    • This will consequently reduce the competitiveness of steel produced in China, compared to steel from other countries that is made in more carbon-efficient mills that do not have to pay this additional tax.

    This suggests that the carbon border tax is also politically preferable to Europe as it slows down the gradually rising economy in China, and would therefore preserve the European countries’ competitiveness.

    How does this impact India?

    • As India’s third largest trading partner, the EU accounted for €62.8 billion ($74.5 billion) worth of trade in goods in 2020, or 11.1% of India’s total global trade.
    • India’s exports to the EU were worth $41.36 billion in 2020-21, as per data from the commerce ministry.
    • The CBT would cover energy-intensive sectors such as cement, steel, aluminium, oil refinery, paper, glass, chemicals as well as the power sector.
    • By increasing the prices of Indian-made goods in the EU, this tax would make Indian goods less attractive for buyers and could shrink demand.
    • Sadly, India’s many ‘self-reliance’ tariffs are also a contributor to this.

    Issues with CBT

    • Impact on trade: The degree of impact on industrial sectors would be largely influenced by two factors: carbon intensity and trade intensity.
    • Altering competitiveness: For companies, it will raise the administrative burden of crossing borders and increase trade frictions, especially for small businesses. That will inevitably reduce choice and raise costs for consumers.
    • Promoting protectionism: The carbon tax may end up being protectionist, and will hit emerging economies like India hard.
    • Unfair practices under WTO: Depending on their design they could fall foul of WTO measures designed to prevent importing countries from discriminating against particular exporting countries.
    • A violation of Paris Accord: CBT compels developing countries to pay the same price as the developed countries to climate change. The EU is essentially bypassing the principle of ‘common but differentiated responsibilities’ that should guide international climate action.

    Way forward

    • Carbon taxing is just one way of holding large emitters accountable for their role in harming the environment.
    • However, fundamental changes can’t be forced by tariffs.
    • If the planet is to have any hope of meeting the Paris Agreement goals, drastic measures that consider both the economic and social wellbeing of nations’ inhabitants must be taken.
    • This should take all nations into confidence than imposing such overnight tariffs.
    • It is no doubt that India must be in the forefront in climate politics. But it must also be cautious about the negotiations in global laws to protect domestic interests.

     

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  • Supreme Court asks government to grant pension to 32 women IAF officers

    women

    The Supreme Court has ordered the government to grant pension to women officers who fought for 12 years to get reinstatement and permanent commission in the Indian Air Force (IAF).

    Women in IAF: A case for Permanent commission

    • History is replete with examples where women have been denied their just entitlements under law and the right to fair and equal treatment in the workplace.
    • The women had been fighting for 12 years for a chance to be considered for permanent commission.
    • The women pointed out to the court’s judgment in Babita Puniya Case.
    • It upheld the right of women short service commission officers to be considered for permanent commission on a par with their men colleagues.

    Why males have ever dominated the armed forces?

    • Militaries across the world help entrench hegemonic masculine notions of aggressiveness, strength and heterosexual prowess in and outside their barracks.
    • The military training focuses on creating new bonds of brotherhood and camaraderie between them based on militarized masculinity.
    • This temperament is considered in order to enable conscripts to survive the tough conditions of military life and to be able to kill without guilt.
    • To create these new bonds, militaries construct a racial, sexual, gendered “other”, attributes of whom the soldier must routinely and emphatically reject.

    Dimensions of the Issue

    • Gender is not a hindrance: As long as an applicant is qualified for a position, one’s gender is arbitrary. It is easy to recruit and deploy women who are in better shape than many men sent into combat.
    • Combat Readiness: Allowing a mixed-gender force keeps the military strong. The armed forces are severely troubled by falling retention and recruitment rates. This can be addressed by allowing women in the combat role.
    • Effectiveness: The blanket restriction for women limits the ability of commanders in theatre to pick the most capable person for the job.
    • Tradition: Training will be required to facilitate the integration of women into combat units. Cultures change over time and the masculine subculture can evolve too.
    • Cultural Differences & Demographics: Women are more effective in some circumstances than men. Allowing women to serve doubles the talent pool for delicate and sensitive jobs that require interpersonal skills, not every soldier has.

    Hurdles for Women

    • Capabilities of women: Although women are equally capable, if not more capable than men, there might be situations that could affect the capabilities of women such as absence during pregnancy and catering to the responsibilities of motherhood, etc.
    • Adjusting with the masculine setup: To then simply add women to this existing patriarchal setup, without challenging the notions of masculinity, can hardly be seen as “gender advancement”.
    • Fear of sexual harassment: Sexual harassment faced by women military officers is a global phenomenon that remains largely unaddressed, and women often face retaliation when they do complain.
    • Gender progressiveness could be an illusion: Women’s inclusion is criticized as just another manoeuvre to camouflage women’s subjugation and service as women’s liberation.
    • Battle of ‘Acceptance’: Acceptance of women in the military has not been smooth in any country. Every army has to mould the attitude of its society at large and male soldiers in particular to enhance acceptability of women in the military.
    • Job Satisfaction: Most women feel that their competence is not given due recognition. Seniors tend to be over-indulgent without valuing their views. They are generally marginalised and not involved in any major decision-making.
    • Doubts about Role Definition: The profession of arms is all about violence and brutality. To kill another human is not moral but soldiers are trained to kill.
    • Physical and Physiological Issues: The natural physical differences in stature, strength, and body composition between the sexes make women more vulnerable to certain types of injuries and medical problems. The natural processes of menstruation and pregnancy make women particularly vulnerable in combat situations.
    • Comfort Level: Most women accepted the fact that their presence amongst males tends to make the environment ‘formal and stiff’. The mutual comfort level between men and women colleagues is often very low.

    Conclusion

    • Concern for equality of sexes or political expediency should not influence defence policies.
    • Armed forces have been constituted with the sole purpose of ensuring defence of the country and all policy decisions should be guided by this overriding factor.
    • All matters concerning defence of the country have to be considered in a dispassionate manner.
    • No decision should be taken which even remotely affects the cohesiveness and efficiency of the military.

    Way ahead

    • Induction of women into armed forces should be on the basis of their abilities and not on the basis of their gender.
    • The training for both women and men should be standardized to eliminate differentiation based on physical capabilities.
    • The career aspects and opportunities for women need to be viewed holistically keeping the final aim in focus.

     

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  • Old Pension Scheme and related issues

    Some political parties are promising to switch to the Old Pension Scheme in the opposition-ruled states.

    Old Pension Scheme

    • Pension to government employees at the Centre as well as states was fixed at 50 per cent of the last drawn basic pay.
    • The attraction of the Old Pension Scheme or ‘OPS’ — called so since it existed before a new pension system came into effect for those joining government service from January 1, 2004.
    • It was hence described as a ‘Defined Benefit Scheme’.
    • To illustrate, if a government employee’s basic monthly salary at the time of retirement was Rs 10,000, she would be assured of a pension of Rs 5,000.
    • Also, like the salaries of government employees, the monthly pay-outs of pensioners also increased with hikes in dearness allowance or DA.

    What were the concerns with the OPS?

    • Liability remained unfunded: There was no corpus specifically for pension, which would grow continuously and could be dipped into for payments.
    • Usual budgetary allocation: The Union budgetary allocations (Rs 3,86,001 crore in 2020-21) provided for pensions every year; there was no clear plan on how to pay year after year in the future.
    • Burden on working class: The ‘pay-as-you-go’ scheme created inter-generational equity issues — meaning the present generation had to bear the continuously rising burden of pensioners.
    • Far extended pay-outs: Better health facilities would increase life expectancy, and increased longevity would mean extended payouts.

    What was planned to address this situation?

    Ans. Oasis Project

    • In 1998, the Union Ministry of Social Justice and Empowerment commissioned a report for an Old Age Social and Income Security (OASIS) project.
    • Its primary objective was targeted at unorganised sector workers who had no old age income security.
    • The OASIS report recommended individuals could invest in three types of funds to be floated by six fund managers:
    1. Safe (allowing up to 10 per cent investment in equity),
    2. Balanced (up to 30 per cent in equity), and
    3. Growth (up to 50 per cent in equity)
    • The balance would be invested in corporate bonds or government securities.
    • Individuals would have unique retirement accounts, and would be required to invest at least Rs 500 a year.

    Alternative to OPS: New Pension Scheme

    • The New Pension System was proposed by the Project OASIS report; it became the basis for pension reforms.
    • It was originally conceived for unorganised sector workers, was adopted by the government for its own employees.
    • The NPS for Central government employees was notified on December 22, 2003.
    • Unlike some other countries, the NPS was for prospective employees — it was made mandatory for all new recruits joining government service from January 1, 2004.
    • The defined contribution comprised 10 per cent of the basic salary and DA by the employee and a matching contribution by the government — this was Tier 1, with contributions being mandatory.
    • In January 2019, the government increased its contribution to 14 per cent of the basic salary and dearness allowance.
    • Schemes under the NPS are offered by nine pension fund managers — sponsored by SBI, LIC, UTI, HDFC, ICICI, Kotak Mahindra, Aditya Birla, Tata, and Max.

    Risk profiles under NPS

    • NPS is now regulated under the Pension Fund Regulatory & Development Authority (PFRDA) Act, 2013.
    • The risk profiles of various schemes offered by these players vary from ‘low’ to ‘very high’.
    • The 10-year return for the NPS Scheme-Central Government floated by SBI, LIC, and UTI stood at 9.22 per cent; the 5-year return at 7.99 per cent, and the 1-year return at 2.34 per cent.
    • Returns on high-risk schemes could be as high as 15 per cent.

    Issues with OPS

    • Burden on exchequer: In 30 years, the cumulative pension bill of states has jumped to Rs 3,86,001 crore in 2020-21 from Rs 3,131 crore in 1990-91.
    • Huge share of tax receipts: Overall, pension payments by states eat away a quarter of their own tax revenues. If wages and salaries of state government employees are added to this bill, states are left with hardly anything from their own tax receipts.
    • Issue of inter-generational equity: Today’s taxpayers are paying for the ever-increasing pensions of retirees, with Pay Commission awards almost taking the pension of old retirees to current levels. It means the pension of someone who retired in 1995 may well be the same as that for someone who retires in 2025.

    Why states are reverting back to OPS?

    OPS brings state governments some short-term gains:

    • Deferment to contribution: They save money since they will not have to put the 10 per cent matching contribution towards employee pension funds.
    • Low curtailment in salaries: For employees too, it will result in higher take-home salaries, since they too will not set aside 10 per cent of their basic pay and dearness allowance towards pension funds.
    • Old age security: Some government employees are concerned that their pension may not be the same as 50 per cent of their last salary drawn (as in the OPS).

    Why need pensions at all?

    • Pension helps you accumulate a part of your income, over a long period, so that this money can be used post-retirement.
    • They provide a steady source of income when one needs the most.
    • It helps inculcate fiscal discipline.

    Conclusion

    • NPS vs. OPS will play out in the Himachal Assembly elections with freebie trending parties considering following the same trend as Rajasthan, Chhattisgarh and Jharkhand.
    • The fiscal risks involved in the transition of NPS-borne employees to OPS regime are substantive and to a great extent unsustainable keeping in view the existing share of pensionary liability in government expenditure.
    • It is estimated that the cost incurred by the government on pension is more than double the cost of NPS contribution in the long run.

     

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  • Tackling the menace of Terror Financing

    Terror Financing

    Context

    • The spectre of terrorist violence looms large over the world. With the technological advancement terrorists, criminals, weapons and funds are also able to move across national boundaries easily. India is increasingly playing a leading role in curbing the terror financing.

    What is Terror Financing?

    • Terrorist financing encompasses the means and methods used by terrorist organizations to finance their activities.
    • This money can come from legitimate sources, for example from profits from businesses and charitable organizations.
    • However, terrorist groups can also get their funds from illegal activities such as trafficking in weapons, drugs or people, or kidnapping for ransom.
    • Nations like Pakistan has stated policy of supporting cross-border terrorism in India through global funding.

    What are the channels of free flow of funds?

    • The global flow of funds has three traditional channels:
    1. Direct smuggling of cash: First, direct smuggling of cash through international borders.
    2. Use of Hawala: Second, the use of hawala networks.
    3. Banking Networks: Third, banking networks including SWIFT and other international channels.
    • Use of new technologies: But now swift technological developments in areas of blockchain or cryptocurrencies which transcend national boundaries and international currency systems have emerged as a new channel for financing terrorist and other illegal activities.

    Terror Financing

    What are the identified sources of funds used by Terrorist organizations?

    • Legal financial activities: Terrorist organizations raise money through several sources like travel agencies, money changers, real estate, retail outlets, NGOs, charitable trusts and even from state sponsors.
    • Sourced form Criminal activities: Terrorists also derive funding from a variety of criminal activities ranging in scale and sophistication from low-level crime to organized fraud or narcotics smuggling or illegal activities in failed states and other safe havens.
    • For instance: Declassified files seized during the raid on Osama bin Laden’s Abbottabad hideout also revealed terror financing related documents.

    What steps could be taken to uproot terror financing methods?

    • Identifying the funding requirements: The first step in identifying and forestalling the flow of funds to terrorists is to understand the funding requirements of modern terrorist groups.
    • Understanding the ideology: The costs associated not only with conducting terrorist attacks, but also with developing and maintaining a terrorist organisation and its ideology are significant. Funds are required to promote a militant ideology, pay operatives and their families, arrange for their travel, train new members, forge documents, pay bribes, acquire weapons and stage attacks.
    • Tracing the methods of fund flow: Terrorists use a wide variety of methods to move money within and between organisations, including the financial sector, physical movement of cash by couriers, and movement of goods through the trade system. Charities and alternative remittance systems have also been used to disguise terrorist movement of funds.
    • Monitoring the ambiguous financial intelligence: Only accurate and well linked financial intelligence can reveal the structure of terrorist groups and also the activities of individual terrorists. Of late, such financial intelligence from the private sector has also given significant clues to foil terrorist acts.

    Terror Financing

    How India is leading the battle against terror financing?

    • India’s continues efforts: Prime Minister Narendra Modi has in all his international speeches spoken at length on this. India’s efforts in taking this momentum forward need to be appreciated.
    • India actively providing platform for various assemblies: Recently, the 90th Interpol General Assembly held in New Delhi, followed by a special session of UN Security Council’s Counter Terrorism in late October. In the third week of November, India will host another global conference focussed only on Countering Financing of Terrorism (CFT).
    • CTC adopted Delhi Declaration: The Counter-Terrorism Committee (CTC) unanimously adopted the Delhi Declaration on countering the use of new and emerging technologies for terrorist purposes. The declaration aims to cover the main concerns surrounding the abuse of drones, social media platforms, and crowdfunding, and create guidelines that will help to tackle the growing issue.
    • India will host ‘No Money for Terror’ Conference: The Ministry of Home Affairs will organise the Third Ministerial ‘No Money for Terror’ Conference. where participants from 75 countries expected to attend the conference. The conference that was first held In Paris in 2018, followed by Melbourne in 2019.

    Terror Financing

    What are the international efforts to tackle the menace of terror financing?

    • Foundation of FATF: Financial Action Task Force (FATF) was formed in 1989 as a means of bringing order and implementing standards to the monetary system in the world with regard to terror finance and money laundering.
    • Adopting the resolutions with time: It was the 2001 terrorist attacks that changed the way security agencies looked at terror financing. The UNSCR resolution 1267 in 1999 and UNSCR resolution 1373 in 2001 formed the bedrock of the financial sanctions’ regime for terrorist organisations and individuals.
    • FATF’s Grey listing: One of the key reasons for Pakistan being placed on the FATF Grey List from 2018 to 2022 was its open defiance of those designations. Only after the FATF’s grey listing open terrorist activities stop and the terrorist infrastructure in Pakistan declined to some extent.
    • UNSC sanctions and designations: It is pertinent to understand that the FATF has developed its entire paradigm around the word risk. It used the United Nations Security Council sanctions against terrorists and terrorist organizations to begin to evolve a complex body of documentation in order to assess technical compliance and effectiveness of countries in implementing those UN designations. Eight of the nine UN designated terrorists were arrested and convicted in a major testimony to the success of the UN sanctions regime.

    Conclusion

    • The UN Security Council has sought to increase efforts against terror financing. It is only through inclusive efforts that this complex issue can be addressed. India’s hosting of the “No money for terror” conference later this month should go a long way in focusing on the issue of state sponsored terror financing.

    Mains Question

    Q. With the technological advancement terrorists, criminals, weapons and funds are also able to move across national boundaries easily. Discuss what steps can be taken at national and international level to curb the menace of terror financing?

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  • In news: Vostro Accounts

    vostro

    Russian banks have been permitted by the RBI to open special Vostro accounts to pave the way for rupee-based export-import transactions.

    Why such move?

    • Logged out of SWIFT -the messaging service to facilitate and confirm cross-border payments – most Russian banks are looking for alternative ways.
    • India and several other countries too want a way out so that trade can continue.
    • India and Russia are now exploring to directly trade in rupee-ruble.

    And this is where Nostro and Vostro may come into play.

    What is a Vostro Account?

    • A Vostro account is defined as an account that a correspondent bank holds on behalf of another bank.
    • Vostro is a Latin word that means “your”, therefore, a vostro account implies that it is “your account”.
    • An example of such an account would be HSBC vostro account is held by SBI in India.

    Understanding a Vostro Account

    • The banks are acting in a fiduciary relationship and they share a principal-agent relationship.
    • The correspondent foreign bank is a financial intermediary in the transactions that they are involved in.
    • The foreign bank acts as an agent that provides services such as executing wire transfers, performing foreign exchange, enabling deposits, enabling withdrawals, expediting international trade on behalf of the domestic bank.
    • It is most used in settlement of foreign exchanges or foreign trade.
    • No interest will be paid on the vostro account maintained, as per the directives that have been issued by the RBI in India.
    • An overdraft facility can only be availed if it is specifically sanctioned.

    Other related terms: Nostro and Loro Accounts

    • Vostro and Nostro accounts are often confused to be the same.
    • While in essence, it is the same account that is being spoken about, the perspective from which it is being seen matters.
    • In a vostro account, it is the correspondent foreign bank point of view, whereas in a nostro account, it is the point of view of the domestic bank.
    • Vostro accounts are maintained in the domestic currency whereas, nostro accounts in foreign currency.
    • A Loro account is a current account that is maintained by one domestic bank for another domestic bank in the form of a third party account, unlike nostro and vostro which is bilateral correspondence.

    Why is it used?

    • This account serves as an economic way for small domestic banks to access the financial resources and services of a larger foreign bank.
    • Enables one to offer international banking solutions to a customer without opening a bank branch in a foreign nation.
    • It minimizes the time for transfer of funds.
    • Closely monitored nostro accounts can be used for better reconciliation of statements.

     

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