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  • “I was casual about my preparation but still, I cleared the exam…twice”

    “I was casual about my preparation but still, I cleared the exam…twice”

    Click here to fill the Samanvaya form for IAS 2020-21, tell us about your preparation. 

    UPSC

    “I was never serious but I cleared the exam”.

    “Truth be told, I didn’t study Laxmikant and still got through”.

    “UPSC is just like university exams. All the hype is unnecessary”.

    Every once in a while, we have been forwarded topper talks where casual claims like the above are made. Though unintentional, they end up harming the aspirants preparing for the exam right now.

    Year Number of candidates who applied Number of candidates who took prelims Number of candidates who qualified for mains Number of candidates who took mains exam Number of candidates who appeared for interview Final number of candidates who got selected for posts
    2018 10,65,552 4,93,972 10,468 1994 759
    2017 9,57,590 4,56,625 13,366 2568 990
    2016 11,35,943 4,59,659 15445 2961 1,099
    2015 9,45,908 4,65,882 15008 15,008 2797 1078
    2014 9,47,428 4,46,623 16706 16286 3308 1236
    2013 7,76,604 3,24,279 14800 14178 3001 1122
    2012 5,50,080 2,71,442 12795 12190 2674 998
    2011 4,99,120 2,43,236 11837 11237 2415 999
    2010 5,47,698 2,69,036 12271 11865 2589 965
    2009 4,09,110 1,93,091 11894 11516 2431 989
    2008 3,25,433 1,67,035 11669 11330 2136 881
    2007 3,33,680 1,61,469 9158 8886 1883 734

    Click here to fill the Samanvaya form for IAS 2020-21, tell us about your preparation. 

    There are 2 factors at play – the level of competition and the format of the exam.

    1. As you can see from 2012 to 2014, approx 4L new aspirants ( close to 80%) were added. This increased the competition substantially.

    2. 2015 saw changes in the exam format. CSAT became a qualifying paper. Meaning its marks were no longer added to the final prelims score. CSAT paper certainly gave an edge to engineering, MBA students who were used to solving such questions with more accuracy and speed.

    But with this paper gone, students from all backgrounds stood at an equal footing. No one having an inherent advantage over the other. The GS focused prelims paper made the mains competition very intense.  

    3. 2017 saw fundamental changes in the way the questions for the prelims paper were designed.

    • The number of direct, straightforward questions came down. These questions used to be directly lifted from the base books.
    • Many questions were unpredictable and not for conventional materials that you would read.

    As a result, a lot of students who were reaching the interview stage started struggling with prelims.

    And this format has been continuing till now – 2018, 2019, and will most certainly continue in 2020.

    More often than not, our students suggest strategies that they’ve discussed with a distant friend or cousin who cleared the exam before 2015 (at times their uncles who cleared the exam in the 90s).

    Very simply put, the competition is intense leaving lesser scope for errors. 

    From the above analysis, it is clear that aspirants from a different era had altogether different concerns and challenges.

    Someone who prepared/cleared the exam before 2015 might not appreciate how difficult and tricky prelims have become. Students who didnt focus their prelims attempt

    And they might not have a nuanced understanding of what the exam requires today, the importance of making notes, etc.

    We always recommend students to consult people who have appeared for the recent 2-3 prelims. Because they are well aware of the most recent trends.

    Our team has the largest repository of best practices and knowledge that has been accumulated over the years. Our programs provide the best support that will give you a fighting chance to clear the exams.

    Click here to fill the Samanvaya form for IAS 2020-21, tell us about your preparation. 

  • Plasma therapy is no silver bullet

    The article discusses the issues with convalescent plasma therapy. The therapy has been in the news as a cure to Covid-19. The lack of conclusive evidence is a major issue. There are certain risks involved in large scale adoption. All such issues are dealt with in detail here.

    Importance of scientific research in dealing with Covid-19

    • The COVID-19 pandemic has posed unprecedented challenges to governments, health professionals and the general public at large, around the world.
    • Every response, administrative, social, economic or medical is being subjected to intense public scrutiny, as it rightly should be in the spirit of mature democracy.
    • Scientific research in medicine is the only means to overcome novel and complex diseases such as COVID-19 and that too thrives on the same spirit of debate and criticism.
    • Difficulty in establishing protocols: The difference is that the standards of evidence required, to generate consensus and arrive at the most optimal protocols, are far more rigorous and time-taking than in most other walks of life.

    Issues with plasma therapy

    • The convalescent plasma therapy, that is being currently studied by the Indian Council of Medical Research, through open-label, randomised controlled trial to evaluate it for both safety and efficacy.
    • The problem with the therapy is of the lack of established protocols.
    • What is involved in therapy? The therapy involves infusing patients suffering from COVID-19 with plasma from recovered patients.
    • In theory, the antibodies of the recovered person may help that patient’s immune system fight the virus.
    • While showing great promise, it is a line of treatment that is yet to be validated for efficacy and safety and cannot be deployed widely without caution.
    • The current evidence to conclude anything about the true benefits of this therapy is very thin.
    • Till date, there have been only three published case series for convalescent plasma in COVID-19 with a cumulative of 19 patients.
    • Given the very small number of patients involved in these studies and a publication bias in medicine, we cannot conclude the therapy will work on all patients all the time or even believe that the convalescent plasma was the only reason for their improvement.
    • The most important principle in medical ethics is “do no harm”.
    • The transfusion of convalescent plasma is also not without risks, which range from mild reactions like fever, itching, to life-threatening allergic reactions and lung injury.
    • To recommend a therapy without studying it thoroughly with robust scientific methods may cause more harm than good.
    • Further, convalescent plasma therapy requires intensive resources, healthy COVID-19 survivors to donate, a blood bank with proper machinery and trained personnel to remove plasma, equipment to store it and testing facilities to make sure it has an adequate amount of antibodies.

    Need for the Randomised Controlled Trials (RCT)

    • To say with certainty whether a drug is truly effective or not, the gold standard in medicine is to conduct a randomised controlled trial.
    • In RCT half the patients get the experimental drug and the other half do not.
    • Only if patients in the first half show substantial improvement over those in the second half, it indicates the drug is beneficial.

    Exploring other options and focusing on health infrastructure

    • Too much focus on one approach can take away the focus from other important therapeutic modalities like the use of oxygen therapy, antivirals, and antibiotics for complicated hospital courses.
    • To overcome the pandemic comprehensively, we should focus on strengthening health systems at all levels, including referral systems, supply chain, logistics and inventory management.
    • We need to work on protecting our healthcare workers, improving prevention methods, promoting cough etiquettes, effective quarantining and accurate testing.

    A direct question based on the therapy like- “What is convalescent plasma therapy and what are the issues involved in its adoption?” can be asked by the UPSC.

    Conclusion

    Even these times of collective uncertainty are no reason to lower scientific temper. Science should be driven by reason and evidence with hope as a catalyst but not by either fear or populism. Pushing one or the other therapy without evidence or caution can only set back our larger fight against COVID-19.

  • Get ready for upcoming 5th Full Length Prelims Test (Full Syllabus) on 2nd May – sample questions highlighting our methodology

    Click here to enrol for the Prime Prelims TS

    Dear students,

    31st May 2020 is the D-day for all civil service aspirants.

    “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

    This quote by Abraham Lincoln sums up how one should prepare for that day. So before entering the battlefield alone should have enough practice. Our Prime Prelims Test series which shall enrich you to acquaint yourself with the pattern of CSE-2020, assess your abilities, rectify your mistakes and make you confident to appear on the examination day.

    Our Prime Prelims Test Series follows the same approach as that adopted by UPSC. Our team of experts is quite enriched with the UPSC pattern and focal point of the questions and hence creates more chances for the aspirants to crack civil service examination by appearing our Test Series.

    This is the time where you must have done most of your revision and are ready to face the UPSC CSP with all the josh. Thus, what better exercise would you need than the full syllabus Mock Test. This is the 1st among the four Full-Length Tests covering the whole syllabus and we have curated it as per the trend of previous 5 years of UPSC CSP.  You see, since 2015, this has been the general weightage of various subjects in UPSC CSP:

     

    Subjects Question Distribution in the year 2019 Question Distribution in the year 2018 Question Distribution in the year 2017 Question Distribution in the year 2016 Question Distribution in the year 2015
    Economy 14 16 8   8 13
    Current Affair

    (including IR)

    		 22 28 34   27 29
    History, Modern India, Indian National Movements, Art and Culture 17 15 14   15 14
    Geography 14 8 7   7 14
    Polity 15 13 22   7 13
    Science & Technology 7 7   4   8 7
    Environment 11 13   11   18 10

    This is reflected in our mock test as well. (Current affairs has been amalgamated in the various subject list)

    History, Art & Culture: 20

    Polity and Governance: 19

    Economics: 16

    Geography: 18

    Environment: 17

    Science and Tech: 10

    The key philosophy of our prelims TS is Evidence-based question making: The 3600 questions you face in our mocks have their relevance established in UPSC’s trend analysis. We focus on themes that are important as per UPSC so that we maximize your chances of questions overlap with the actual UPSC Prelims.

    Nothing speaks more than the facts itself rather than a mere jargon. Here is a list of 5 sample questions from the upcoming test which will help you in identifying the standards and approach we follow. (you can skip this if you want to attempt these directly in the test). 

    Noone but only you can assess how it will help you in being the top percentile of aspirants. You have to practice ruthlessly and civils Daily provides you with a platform to hone your skills.

    Q1. In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.?

    1. Ad Hoc Committees set up by the Parliament

    2. Parliamentary Department Related Standing Committees

    3. Finance Commission

    4. Financial Sector Legislative Reforms Commission

    5. NITI Aayog

    Select the correct answer using the code given below:

    a. 1 and 2 only

    b. 1,3 and 5 only

    c. 2, 4 and 5 only

    d. 3, 4 and 5 only

     

    Q2. Consider the following factors:

    1. Differences in Density

    2. The Earth’s Rotation

    3. The Planetary Winds

    The origin and the nature of ocean currents depend on which of the above?

    a. 1 and 2 only

    b. 2 and 3 only

    c. 1 and 3 only

    d. All of them

     

    Q3. Which of the following statements are correct regarding the Phylum Porifera?

    1. Members of this phylum are commonly known as sponges.

    2. They are generally marine and symmetrical in nature.

    Select the correct answer from the codes given below:

    a. 1 only

    b. 2 only

    c. Both of them

    d. Neither of them

     

    Q4. Consider the following statements regarding the Minars built during medieval India:

    1. The primary use of Minars was for Azaan, but its great height symbolised the might and power of the ruler.

    2. The Chand Minar was built at Delhi and is one of the most striking Minars of the medieval times.

    Which of the statements given above is/ are correct?

    a. 1 only

    b. 2 only

    c. Both of them

    d. Neither of them

     

    Q5. Consider the following statements:

    1. W.C. Bonnerjea was the first Indian to become a member of the British Parliament.

    2. Satyendra Prasad Sinha was the first Indian to become a member of Viceroy’s Council.

    3. G.V. Mavalankar was the first Speaker of the Central Legislative Assembly.

    Which of the statements given above is/are correct?

    a. 1 and 2 only

    b. 2 and 3 only

    c. 1 and 3 only

    d. All of them

  • Study on China dams brings the Brahmaputra into focus

    A new study highlighting the impact of China’s dams on the Mekong River has raised fresh questions on whether dams being built on other rivers that originate in China, such as the Brahmaputra, may similarly impact countries downstream.

    Make a note of:

    1) Tributaries of R. Brahmaputra

    2) Countries swept by R. Mekong

    3) Mekong-Ganga Cooperation (reminds us seeing R. Mekong)

    China’s dams on the Mekong River

    • The Mekong flows from China to Myanmar, Laos, Thailand, Cambodia and Vietnam.
    • The Mekong River Commission, which comprises Cambodia, Laos, Thailand, and Vietnam, has said more scientific evidence was needed to establish whether dams caused a 2019 drought.
    • While China’s southwestern Yunnan province which usually has above-average rainfall, there was “severe lack of water in the lower Mekong.

    Mekong dams raise some questions

    • The Mekong study was not conclusive on the question of how China’s dams had affected the quantity of flows.
    • To state that the basin had less water because of activities in China alone is misleading, mainly because that only considers the water flowing into the lower basin at one station in Thailand.
    • The study did not consider other dams and water-use along the course of the river.
    • The lower basin isn’t entirely dependent on flows from China but also receives water from tributaries in all four countries, which the study did not account for.

    Concerns for India

    • India does not have a water-sharing agreement with China, but both sides share hydrological data.
    • India has long expressed concerns over dam-building on the Brahmaptura.
    • In 2015, China operationalised its first hydropower project at Zangmu, while three other dams at Dagu, Jiexu and Jiacha are being developed.
    • India need to raise the issue of river waters in the Brahmaputra with China, as that appears to be the only methodology to ensure what happened on Mekong does not happen on Brahmaputra.

    A management problem

    • The dams are not likely to impact the quantity of the Brahmaputra’s flows because they are only storing water for power generation.
    • Moreover, the Brahmaputra is not entirely dependent on upstream flows and an estimated 35% of its basin is in India.
    • However, India concerns more about activity in China affecting quality, ecological balance, and flood management.

  • India’s Permanent Mission to the United Nations

    Syed Akbaruddin, a fiery spokesperson, who is credited with effectively presenting India’s position on a range of crucial issues at the UN headquarters in New York for the last several years, has retired. A 1985-batch IFS officer T S Tirumurti, currently serving as Secretary in the Ministry of External Affairs will succeed him.

    Permanent Missions to the United Nations

    • The Permanent Mission is the diplomatic mission that every member state deputies to the UN, and is headed by a Permanent Representative, who is also referred to as the “UN ambassador”.
    • Article 1 (7) of the Vienna Convention on the Representation of States provides for a permanent mission.
    • UN Permanent Representatives are assigned to the UN headquarters in New York City, and can also be appointed to other UN offices in Geneva, Vienna, and Nairobi.
    • The Mission in New York is housed in a 27-story building designed by the noted architect Charles Correa in 1993 and is decorated with MF Hussain paintings.

    The Indian Permanent Mission at the UN

    • According to the website of the Permanent Mission of India in New York, there are currently eight Indians in senior leadership positions at the UN at the levels of Under-Secretary-General and Assistant Secretary-General.
    • The first Indian delegates at the UN included statesman Arcot Ramasamy Mudaliar, and freedom fighters Hansa Mehta, Vijayalakshmi Pandit, and Lakshmi Menon.
    • Mehta and Pandit were among the 15 women members of the Indian Constituent Assembly.
    • India was among the select members of the United Nations that signed the United Nations Declaration at Washington on January 1, 1942.
    • India also participated in the historic UN Conference of International Organization at San Francisco from April 25 to June 26, 1945.

  • Why May 1 is observed as Labour Day?

    Today (May 1) is May Day, also known as International Workers’ Day and as Labour Day in different parts of the world. It is an occasion that commemorates the contributions of workers and the historic labour movement.

    Personality based history question in the UPSC CSE prelims is on the way to become the new normal. Kindly note all such phenomena in the news which tend to invoke some aspects of the modern Indian history. You can find all such news here.

    The Haymarket incident

    • While observed as an ancient northern hemisphere spring festival, May 1 became associated with the labour movement in the late 19th century, after trade unions and socialist groups designated it as a day in support of workers.
    • It was decided to do so in memory of the Haymarket affair of 1886, in Chicago in the United States, in which a peaceful rally in support of workers led to a violent clash with the police, leading to the deaths of 4 civilians and 7 police officers.
    • Many of the agitationists, who were protesting workers’ rights violations, straining work hours, poor working conditions, low wages and child labour, were arrested and served terms of life imprisonment, death sentences, etc., and those who died were hailed as “Haymarket Martyrs”.
    • The incident is believed to have given the workers’ movement a great impetus.

    Linked to the Russian Revolution

    • In 1889, The Second Communist International, an organisation created by socialist and labour parties, declared that May 1 would be commemorated as International Workers’ Day from then on.
    • Finally, in 1916, the US began to recognise eight-hour work timings after years of protests and uprisings.
    • In 1904, the International Socialist Congress at Amsterdam called on to demonstrate energetically on the First of May for the legal establishment of the 8-hour day.
    • After the Russian Revolution in 1917, the celebration was embraced by the Soviet Union and the Eastern bloc nations during the Cold War– becoming a national holiday in many of them.
    • Parades were a part of the celebration– the one at Moscow’s Red Square was attended by top Communists leaders and displayed Soviet military might.

    Indian Case

    • In India, May Day was first celebrated on May 1, 1923, after the Labour Kisan Party of Hindustan initiated and Comrade Singaravelar (Singaravelu Chettiar) helmed the celebrations.
    • Chettiar was known for being one of the leaders of Self Respect Movement in the Madras Presidency and for his fight for the rights of backward classes.
    • In one of his meetings, Chettiar passed a resolution stating the government should allow everybody a national holiday on Labour Day.

  • [pib] Earth’s Magnetosphere and its dynamics

    Scientists at the Indian Institute of Geomagnetism (IIG) have developed a generalized one-dimensional fluid simulation code capable of studying a wide spectrum of coherent electric field structures of earth’s magnetosphere which can be useful in the planning of future space missions.

    The newscard talks of not so new phenomenon but a basic terminology of space sciences. Kindly make a note of what the Magnotesphere is, how it is formed, role of solar winds, Geodynamo etc.

    Earth’s Magnetosphere

    • The magnetosphere is the region of space surrounding Earth where the dominant magnetic field is the magnetic field of Earth, rather than the magnetic field of interplanetary space.
    • It is generated by the interaction of the solar wind with Earth’s magnetic field.

    Features of the Earth’s magnetosphere

    1) Bow shock,

    2) Magnetosheath,

    3) Magnetopause,

    4) Northern tail lobe,

    5) Southern tail lobe,

    6) Plasmasphere,

    7) Solar wind.

    How is it formed?

    • Sun is the major source of plasma deposition in space around the Earth. Sun forces some of its plasma towards the earth in the form of the solar wind.
    • The speed of this wind varies between 300 to 1500 km/s, which carries with it solar magnetic field, called as Interplanetary Magnetic Field (IMF).
    • The magnetic field is generated by electric currents due to the motion of convection currents of a mixture of molten iron and nickel in the Earth’s outer core.
    • These convection currents are caused by heat escaping from the core, a natural process called a geodynamo.

    Why study the magnetosphere?

    • The Earth’s magnetosphere is a vast region which has a finite number of satellites hurtling through this realm.
    • The morphology of the plasma processes around the satellite can be understood quite well.
    • However, when they leave the observational domain of one satellite to enter into another, a vast blind arena is created.
    • How the morphology of these processes changes over space and time can be ideally deciphered only through computer simulations.

    Outcome of the study

    • Almost 99% of matter in the universe is in the form of plasma, Earth’s magnetosphere, too, contains this material and the plasma.
    • They have the ability to hamper the working of a number of satellites that have been placed in orbit in the magnetospheric region.

    Significance

    • Apart from the well being of these expensive satellites, the academic understanding of this region is quite essential to comprehend the cosmos in its entirety.
    • The study will help advance the knowledge of plasma waves, instabilities, and coherent effects associated with wave-particle interactions that are useful in planning of future space missions.
    • It can also lead to precisely controlled fusion laboratory experiments for ever-expanding energy needs of humanity.

  • GI tag to Manipur black rice, Gorakhpur terracotta and Kovilpatti kadalai mittai

    Chak-Hao, the black rice of Manipur and the Gorakhpur terracotta and the Kovilpatti kadalai mittai of Tamil Nadu have bagged the Geogrphical Indication (GI) tag.

    Must read: GI Tags in news for 2020 Prelims

    Chak-Hao

    • Chak-Hao, the scented glutinous rice which has been in cultivation in Manipur over centuries.
    • It is characterized by its special aroma. It is normally eaten during community feasts and is served as Chak-Hao kheer.
    • The application for Chak-Hao was filed by the Consortium of Producers of Chak-Hao (Black Rice), Manipur and was facilitated by the Department of Agriculture.
    • Chak-Hao has also been used by traditional medical practitioners as part of traditional medicine.
    • According to the GI application filed, this rice takes the longest cooking time of 40-45 minutes due to the presence of a fibrous bran layer and higher crude fibre content.
    • At present, the traditional system of Chak-Hao cultivation is practised in some pockets of Manipur.
    • Direct sowing of pre-soaked seeds and also transplantation of rice seedlings raised in nurseries in puddled fields are widely practised in the State’s wetlands.

    Gorakhpur terracotta

    • The terracotta work of Gorakhpur is a centuries-old traditional art form, where the potters make various animal figures like, horses, elephants, camel, goat, ox, etc. with hand-applied ornamentation.
    • The application was filed by Laxmi Terracotta Murtikala Kendra in Uttar Pradesh.
    • Some of the major products of craftsmanship include the Hauda elephants, Mahawatdar horse, deer, camel, five-faced Ganesha, singled-faced Ganesha, elephant table, chandeliers, hanging bells etc.
    • The entire work is done with bare hands and artisans use natural colour, which stays fast for a long time.
    • There are more than 1,000 varieties of terracotta work designed by the local craftsmen.
    • The craftsmen are mainly spread over the villages of Aurangabad, Bharwalia, Langadi Gularia, Budhadih, Amawa, Ekla etc. in Bhathat and Padri Bazar, Belwa Raipur, Jungle Ekla No-1, Jungle Ekla No-2 in Chargawan block of Gorakhpur.

    Kovilpatti kadalai mittai

    • It is a candy made of peanuts held together with glistening syrup, and topped with wisps of grated coconut dyed pink, green and yellow.
    • It is made using all natural ingredients such as the traditional and special ‘vellam’ (jaggery) and groundnuts and water from the river Thamirabarani is used in the production, which enhances the taste naturally.
    • It is manufactured in Kovilpatti and adjacent towns and villages in Thoothukudi district.
    • It is produced by using both groundnuts and jaggery (organic jaggery), in carefully selected quantities from selected specific locations in Tamil Nadu.

    Back2Basics: Geographical Indications in India

    • A Geographical Indication is used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Such a name conveys an assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.
    • This tag is valid for a period of 10 years following which it can be renewed.
    • Recently the Union Minister of Commerce and Industry has launched the logo and tagline for the Geographical Indications (GI) of India.
    • The first product to get a GI tag in India was the Darjeeling tea in 2004.
    • The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis Act for protection of GI in India.
    • India, as a member of the WTO enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights
    • Geographical Indications protection is granted through the TRIPS Agreement

  • Festival in news: Chithirai Festival

    For the first time, in place of Madurai’s Chithirai Festival, a simple celestial union is set to take place that will be streamed online.

    Match the pair based question can be asked from festivals as such. Recently, the following festivals were in the news: Ambubachi Mela, Thrisoor Puram, Meru Jatara, Nagoba Jatara etc.

    Chithirai Festival

    • Chithirai Festival or Chithirai Thiruvizha is an annual celebration celebrated in the city of Madurai during the month of April.
    • It is celebrated during the Tamil month of Chithirai.
    • It lasts for one month of which the first 15 days mark the celebrations of the coronation of Goddess Meenakshi and the Marriage of Lord Sundareswara and Goddess Meenakshi.
    • The next 15 days mark the celebrations of the Journey of Lord Alagar from Kallazhagar temple in Alagar Koyil to Madurai.

    About Meenakshi Temple

    • The ancient city of Madurai, more than 2,500 years old, was built by the Pandyan king, Kulashekarar, in the 6th century B.C.
    • But the reign of the Nayaks marks the golden period of Madurai when art, architecture and learning flourished expansively.
    • The most beautiful buildings in the city including its most famous landmark, the Meenakshi temple, were built during the Nayak rule.
    • Located in the heart of the city, the Meenakshi-Sundareshwarar temple is dedicated to goddess Meenakshi, the consort of lord Shiva.
    • The sculpted pillars are adorned with the exquisite murals that celebrate the ethereal beauty of princess Meenakshi and the scenes of her wedding with Lord Shiva.
    • The pillars depict scenes from the wedding of Meenakshi and Sundareswarar. There are 985 richly carved pillars here and each one surpasses the other in beauty.

  • [Prelims Spotlight] Important Financial Institutions in News

    Prelims Spotlight is a part of “Nikaalo Prelims 2020” module. This open crash course for Prelims 2020 has a private telegram group where PDFs and DDS (Daily Doubt Sessions) are being held. Please click here to register.

    Important Financial Institutions in News

    01 May 2020

    Development Finance Institutions

    The Need of DFIs

    Classification of DFIs

    All India DFIs Special DFIs Investment Institutions Refinance Institutions State Level DFIs
    Industrial Finance Corporation of India

    Industrial Development Bank of India

    Small Industries Development Bank of India (SIDBI)

    ICICI

    ICICI ceased to be a DFI and converted into a Bank on 30 March 2002.

    IDBI was converted into a Bank on 11 October 2004.

    		 EXIM Bank

    IFCI Venture Capitalist Fund

    Tourism Finance Corporation of India.

    IDFC.

    		 LIC

    Union Trust of India.

    General Insurance Corporation.

    		 National Housing Board.

    NABARD.

    		 State Financial Corporation.

    State Industrial Development Corporations.

     

    All India Development Finance Institutions

    IFCI ICICI IDBI SIDBI
    IFCI was the first DFI to be setup in 1948. It was setup in January 1995. The IDBI was initially set up as a Subsidiary of the RBI. In February 1976, IDBI was made fully autonomous. SIDBI was setup as a subsidiary of IDBI in 1989.
    With Effect from 1 July 1993, IFCI has been converted into Public Limited Company. With effect from April 2002, ICICI has been converted into a Bank. The IDBI was designated as apex organisation in the field of Development Financing. However, it was converted in a bank wef Oct 2004. The SIDBI was designated as apex organisation in the field of Small Scale Finance.The Union Budget of 1998-99 proposed the delinking of SIDBI from IDBI.
    The key function of IFCI was; granting long-term loans(25 years and above); Guaranteeing rupee loans floated in open markets by industries; Underwriting of shares and debentures; Providing guarantees for industries. The key functions of ICICI were; to provide long term or medium term loans or equity participation; Guaranteeing loans from other private sources; providing consultancy services to industry. The key functions of IDBI were; it provides refinance against loans granted to industries; it subscribed to the share capital and bond issues of other DFIs; it also acted as the coordinator of DFIs at all India level. The key function of SIDBI was; to provide assistance to small scale units; initiating steps for technological up gradation and modernization of SSIs; expanding the marketing channel for the Small Scale Industries product; promotion of employment creating SSIs.
    IFCI was a public sector DFI. The ICICI differed from IFCI and IDBI with respect to ownership, management and lending operation. ICICI was a Private sector DFI. It was a Public sector DFI.

     

    Investment Institutions

    Union Trust of India Life Insurance Company General Insurance Corporation
    The UTI was setup on Nov 1963 after Parliament passed the UTI Act. LIC was set up in 1956 after the insurance business was nationalised. The GIC was formed by the central government in 1971.
    The objective of UTI was to channel the savings of people into equities and corporate debts. The flagship scheme of the UTI was called Unit Scheme 64. The objective of LIC is to provide assistance in the form of term loans; subscription of shares and debentures;resource support to financial institutions and Life insurance coverages. The GIC had four subsidiaries; National Insurance Co; New India Assurance; Oriental Insurance; and United India Insurance.
    In 2002, the Union Cabinet had decided to split UTI into UTI 1 and UTI 2 as a result of the prolonged crisis in UTI. The General Insurance Nationalisation Amendment Act, 2002, has delinked the GIC from its four subsidiaries.

     

    Commercial Banks

    • Organised under the Banking Companies Act, 1956
    • They operate on a commercial basis and its main objective is profit.
    • They have a unified structure and are owned by the government, state, or any private entity.
    • They tend to all sectors ranging from rural to urban
    • These banks do not charge concessional interest rates unless instructed by the RBI
    • Public deposits are the main source of funds for these banks

    What are cooperative banks?

    • Cooperative banks are financial entities set up on a co-operative basis and belonging to their members.
    • This means that the customers of a cooperative bank are also its owners. They are registered under the States Cooperative Societies Act and they come under the RBI regulation under two laws:
    • Banking Regulations Act, 1949
    • Banking Laws (Cooperative Societies) Act, 1955
    • They aim to promote savings and investment habits among people, especially in rural areas.
    • These banks are broadly classified under two categories – Rural and Urban.
    • The rural cooperative credit institutions can be further classified into:
    • Short-term cooperative credit institutions
    • Long-credit institutions

    The short-term credit institutions can further be sub-divided into:

    • State cooperative banks
    • District Central Cooperative banks
    • Primary Agricultural Credit Societies

    Long-term institutions can either be:

    • State Cooperative Agricultural and Rural Development Banks (SCARDBs), or
    • Primary Cooperative Agriculture and Rural Development Banks (PCARDBs)
    • Urban Cooperative Banks (UCBs) can be further classified into scheduled and non-scheduled.
    • The scheduled and unscheduled can either be operating in a single state or multi-state

    Regional Rural Banks (RRBs)

    • RRBs have Scheduled Commercial Banks operating at the regional level in different states of India. They are recognized under the Regional Rural Banks Act, 1976 Act.
    • They have been created with a view of serving primarily the rural areas of India with basic banking and financial services.
    • However, RRBs may have branches set up for urban operations and their area of operation may include urban areas too.
    • The area of operation of RRBs is limited to the area covering one or more districts in the State.

    Their functions

    RRBs also perform a variety of different functions. RRBs perform various functions in the following heads:

    • Providing banking facilities to rural and semi-urban areas
    • Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc.
    • Providing Para-Banking facilities like locker facilities, debit and credit cards, mobile banking, internet banking, UPI etc.
    • Small financial banks etc.

    About NABARD

    • NABARD is an apex development financial institution in India, headquartered at Mumbai with regional offices all over India.
    • It is India’s specialised bank in providing credit for Agriculture and Rural Development in India.
    • The Bank has been entrusted with “matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India”.
    • It was established on the recommendations of B.Sivaraman Committee on 12 July 1982 to implement the NABARD Act 1981.
    • NABARD supervises State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs) and conducts statutory inspections of these banks.

    About National Housing Bank

    • NHB is an All India Financial Institution (AIFl), set up in 1988, under the National Housing Bank Act, 1987.
    • The National Housing Policy, 1988 has envisaged the setting up of NHB as the Apex level institution for housing.
    • It is an apex agency established to operate as a principal agency to promote housing finance institutions both at local and regional levels.
    • It aims to provide financial and other support incidental to such institutions and for matters connected therewith.

    EXIM Bank

    • EXIM stands for Export-Import
    • Export-Import Bank of India is a wholly-owned Govt. of India entity
    • Established in 1982
    • HQ : New Delhi
    • Aim : financing, facilitating and promoting foreign trade of India.
    • The EXIM bank extends Line of Credit (loC) to overseas financial institutions, regional development banks, sovereign governments and other entities abroad.
    • Thus the EXIM Banks enables buyers in those countries to import developmental and infrastructure, equipment’s, goods and services from India on deferred credit terms.
    • The bank also facilitates investment by Indian companies abroad for setting up joint ventures, subsidiaries or overseas acquisitions.

    International Financial Services Centres

    • IFSCs are intended to provide Indian corporates with easier access to global financial markets, and to complement and promote further development of financial markets in India.
    • An IFSC enables bringing back the financial services and transactions that are currently carried out in offshore financial centres by Indian corporate entities and overseas branches/subsidiaries of financial institutions (FIs) to India.
    • This is done by offering business and regulatory environment that is comparable to other leading international financial centres in the world like London and Singapore.
    • The first IFSC in India has been set up at the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar.

    Banks Board Bureau

    • Banks Board Bureau is an autonomous body of Union Government of India
      It is tasked to improve the governance of Public Sector Banks, recommend the selection of chiefs of government-owned banks and financial institutions and to help banks in developing strategies and capital raising plans
    • It will have three ex-officio members and three expert members in addition to Chairman
    • Financial services secretary, deputy governor of the Reserve Bank of India and secretary- public enterprises are BBB’s ex-officio members

    Non-Banking Financial Companies

    • A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
    • A non-banking institution which is a company and has a principal business of receiving deposits under any scheme or arrangement in one lump sum or in instalments by way of contributions or in any other manner is also a non-banking financial company (Residuary non-banking company).

    NBFCs are doing functions similar to banks. What is the difference between banks & NBFCs?

    NBFCs lend and make investments, and hence their activities are akin to that of banks; however, there are a few differences as given below:

    1. NBFC cannot accept demand deposits;
    2. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
    3. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
    4. Unlike Banks which are regulated by the RBI, the NBFCs are regulated by multiple regulators; Insurance Companies- IRDA, Merchant Banks- SEBI, Micro Finance Institutions- State Government, RBI and NABARD.
    5. The norm of Public Sector Lending does not apply to NBFCs.
    6. The Cash Reserve Requirement also does not apply to NBFCs.

    Classification and Categorization of NBFCs

    Asset Finance Company AN AFC is a company which is a financial institution whose principle business is the financing of physical assets such as automobiles, tractors, machines etc.
    Investment Company AN IC is any company which is a financial institution carrying on its principle business of acquisitions of securities.
    Loan Company LC is a financial institution whose primary business is of providing finance by making loans and advances.
    Infrastructure Finance Company IFC is an NBFC which deploys 75% of its total assets in infrastructure loans and has a minimum net owned fund of Re 300 Crore.
    Systematically Important Core Investment Company CIC is an NBFC carrying on the business of acquisition of shares and securities. CIC must satisfy the following conditions:It holds not less than 90% of its Total Assets in the form of investment in equity shares, preference shares, debt or loans in group companies;

    Its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its Total Assets;

    (c) it does not trade in its investments in shares, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment;

    (d) it does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the RBI Act, 1934 except investment in bank deposits, money market instruments, government securities, loans to and investments in debt issuances of group companies or guarantees issued on behalf of group companies.

    (e) Its asset size is ₹ 100 crore or above and

    (f) It accepts public funds
    Infrastructure Debt Fund NBFC IDF NBFC primary role is to facilitate long term flow of debt into infrastructure projects. Only Infrastructure Finance Companies can sponsor IDF.
    Micro Finance NBFC MFI NBFC is a non-deposit taking NBFC having not less than 85% of its assets in the nature of qualifying assets which satisfy the following criteria:a) loan disbursed by a NBFC-MFI to a borrower with a rural household annual income not exceeding ₹ 1,00,000 or urban and semi-urban household income not exceeding ₹ 1,60,000;

    b. loan amount does not exceed 50,000 in the first cycle and 1,00,000 in subsequent cycles;

    c. total indebtedness of the borrower does not exceed 1,00,000;

    d. tenure of the loan not to be less than 24 months for the loan amount in excess of 15,000 with prepayment without penalty;

    e. loan to be extended without collateral;

    f. aggregate amount of loans, given for income generation, is not less than 50 per cent of the total loans given by the MFIs;

    g. loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrower

     

     

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