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Type: Prelims Only

  • [pib] Third United Nations Ocean Conference (UNOC3)

    Why in the News?

    At the Third United Nations Ocean Conference (UNOC3) in Nice, co-hosted by France and Costa Rica, India made a powerful case for urgent international cooperation to protect the world’s oceans.

    About United Nations Ocean Conference (UNOC)

    • What is it: The UNOC is a major international forum dedicated to supporting Sustainable Development Goal 14 (SDG 14): Life Below Water.
    • Primary Focus: It promotes the conservation and sustainable use of oceans, seas, and marine resources.
    • Multi-Stakeholder Participation: UNOC brings together governments, NGOs, academia, intergovernmental organizations, private companies, and Indigenous communities to address ocean-related challenges.
    • Key Themes: The conference tackles issues like marine pollution, overfishing, climate change, and habitat degradation, and encourages policy coordination and financial pledges.
    • Timeline of Conferences:
      • 2017: First conference in New York, co-hosted by Fiji and Sweden
      • 2022: Second in Lisbon, co-hosted by Portugal and Kenya
      • 2025: Third in Nice, co-hosted by France and Costa Rica
      • 2028: Fourth conference to be hosted by Chile and South Korea (yet to be announced officially)
    • Legal Framework: UNOC operates within the UN Convention on the Law of the Sea (UNCLOS).
    • Financial and Policy Impact: Since 2014, UNOC has mobilized over $130 billion and generated 2,160+ voluntary commitments toward protecting ocean health.

    Major Indian Initiatives Showcased at UNOC3 (2025):

    • Deep Ocean Mission: India showcased progress on the ‘Samudrayaan’ mission, a deep-sea manned submersible targeting 6,000-meter depth by 2026.
    • Plastic Pollution Action: India emphasized the national ban on single-use plastics and the ‘Swachh Sagar, Surakshit Sagar’ campaign, which has cleaned 1,000+ km of coastline and removed over 50,000 tonnes of plastic waste. A draft Marine Litter Policy has been prepared and India strongly supports a Global Plastics Treaty.
    • Blue Economy Development: Under the Sagarmala Programme, $80 billion has been invested in port-led infrastructure. An additional $2.5 billion has been deployed under PM Matsya Sampada Yojana, leading to a 10% rise in fish production and creation of 1,000+ fish farmer producer organizations.
    • Marine Biodiversity Efforts: India expanded Marine Protected Areas to 6.6% of its Exclusive Economic Zone and restored over 10,000 hectares of mangroves.
    • Marine Data Transparency: India launched the SAHAV Portal, a digital ocean governance platform for science-based and transparent decision-making.
    • International Leadership: India co-led the ‘Blue Talks’ with France and Costa Rica, participated in high-level panels, and advocated for equitable ocean data access and capacity-building in developing nations.

    Back2Basics: United Nations Convention on the Law of the Sea (UNCLOS)

    • UNCLOS is a global treaty that regulates all maritime activities and ocean space.
    • It defines maritime zones such as: Internal Waters (within the baseline), Territorial Sea (up to 12 nautical miles), Contiguous Zone (up to 24 nautical miles), Exclusive Economic Zone (EEZ) (up to 200 nautical miles), High Seas, which lie beyond national jurisdiction.
    • It came into force in 1994 and has 169 parties (as of 2024), including India, but not the U.S.
    • It established the International Seabed Authority and declared the deep seabed as the “common heritage of mankind.”
    • India ratified UNCLOS in 1995 and uses it to claim maritime rights, including its extended continental shelf.
    • It supports freedom of navigation and advocates for a rules-based maritime order under UNCLOS.

     

    [UPSC 2022] With reference to the United Nations Convention on the Law of Sea, consider the following statements:

    1. A coastal state has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baseline determined in accordance with the convention.

    2. Ships of all states, whether coastal or land-locked, enjoy the right of innocent passage through the territorial sea.

    3. The Exclusive Economic Zone shall not extend beyond 200 nautical miles from the baseline from which the breadth of the territorial sea is measured.

    Which of the statements given above are correct?

    Options: (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3*

     

  • HKU5 Bat Viruses pose potential Pandemic Risk

    Why in the News?

    A new study warns that HKU5 bat coronaviruses, closely related to Middle East Respiratory Syndrome coronavirus (MERS-CoV), are just one mutation away from infecting humans.

    Back2Basics: Middle East respiratory syndrome (MERS)

    • Middle East respiratory syndrome (MERS) is a viral respiratory disease caused by Middle East respiratory syndrome coronavirus (MERS‐CoV) that was first identified in Saudi Arabia in 2012.
    • It is a species of coronavirus which infects humans, bats, and camels.

    About HKU5 Virus and Its Characteristics:

    • Classification: HKU5 is a bat coronavirus that belongs to the merbecovirus subgenus, which also includes the MERS-CoV (Middle East Respiratory Syndrome coronavirus).
    • Origin: It was first identified in the Japanese pipistrelle bat in Hong Kong. “HKU” in the name refers to the University of Hong Kong, where the virus was identified.
    • Virology: HKU5 is an enveloped, positive-sense, single-stranded RNA virus, structurally similar to other high-risk coronaviruses.
    • Spread: The virus has been detected in bats across Asia, Europe, Africa, and the Middle East, indicating widespread natural reservoirs.
    • Cell Entry Mechanism: Like SARS-CoV-2, HKU5 uses the ACE2 receptor to infect cells, but current strains bind effectively only to bat ACE2, not human ACE2.
    • Recent Developments: In 2025, a new variant called HKU5-CoV-2 was isolated in China, and lab studies show it can infect human airway and gut cells, though less efficiently than SARS-CoV-2.
    • Genetic Similarity: HKU5 is genetically close to both MERS-CoV and SARS-CoV-2, though it has not yet been detected in humans.

    Threats and Risks Associated with HKU5 Virus:

    • Near-Human Infectivity: HKU5 is considered just one mutation away from gaining the ability to infect humans via the ACE2 receptor.
    • Cross-Species Transmission: Certain HKU5 strains have already jumped into minks, demonstrating its capacity to cross species barriers.
    • Pandemic Potential: If HKU5 acquires mutations allowing efficient use of human ACE2, it could pose a significant zoonotic pandemic threat.
    • Relation to Deadly Viruses: Its structural similarity to MERS-CoV, which has a 34% fatality rate, places HKU5 in a high-risk category if human infection occurs.
    [UPSC 2015] H1N1 virus is sometimes mentioned in the news concerning which one of the following diseases?

    Options: (a) AIDS (b) Bird flu (c) Dengue (d) Swine flu*

     

  • Kashmir Merino: India’s First Gene-Edited Sheep

    Why in the News?

    Researchers at Sher-e-Kashmir University of Agricultural Sciences and Technology (SKUAST) have successfully created India’s first gene-edited sheep—a Kashmir Merino breed.

    Kashmir Merino: India's First Gene-Edited Sheep

    About Kashmir Merino Sheep:

    • Overview: Kashmir Merino is a high-quality domestic sheep breed known for its fine wool and ability to thrive in cold climates.
    • Genetics: It was developed by crossbreeding exotic Merino rams with local sheep breeds in Jammu and Kashmir.
    • Characteristics: The breed produces soft, dense wool with high fibre quality, making it valuable for the textile industry.
    • Resilience: It is well-adapted to high-altitude Himalayan conditions, including extreme cold and low oxygen levels.
    • Significance: It plays a key role in regional livestock economies, contributing significantly to wool and mutton production in Jammu and Kashmir.

    Gene-Editing Breakthrough in Kashmir Merino:

    • Gene Targeted: Researchers used CRISPR-Cas9 technology to edit the myostatin gene, which normally inhibits muscle growth.
    • Impact: Disabling this gene led to a 30% increase in muscle mass, resulting in higher meat yield and improved economic returns for farmers.
    • Lab-to-Field Success: The edited embryo was developed in a laboratory and then successfully implanted into a surrogate mother, marking a full-cycle gene-editing achievement.
    • Biotech Significance: This success represents a major advancement in India’s livestock biotechnology, opening new paths for research in disease resistance, wool quality enhancement, and production of transgenic proteins.
    [UPSC 2017] What is the application of somatic cell nuclear transfer technology?

    Options: (a) Production of biolarvicides (b) Manufacture of biodegradable plastics (c) Reproductive cloning of animals* (d) Production of organisms free of diseases

     

  • NASA captures image of Mars’ Arsia Mons Volcano 

    Why in the News?

    NASA’s Mars Odyssey orbiter has captured a spectacular image of Arsia Mons, one of Mars’ largest volcanoes.

    mons

    About Arsia Mons Volcano:

    • Location: Arsia Mons is a massive shield volcano on Mars, located in the Tharsis region near the planet’s equator.
    • Volcanic Chain: It is part of the Tharsis Montes trio, which includes Pavonis Mons and Ascraeus Mons.
    • Size and Structure: The volcano rises about 20 km (12 miles) in height and spans 450 kilometres in diameter, making it one of the largest in the Solar System.
    • Summit Caldera: Arsia Mons has an enormous caldera, or summit crater, measuring 120 kilometres across, which is much wider than most Earth volcanoes.
    • Volcano Type: It is a shield volcano, characterised by gentle slopes formed through successive lava flows.
    • Surface Features: Signs of lava channels, landslides, and possible ancient glaciers have been observed on its flanks.
    • Cloud Activity: Known as the cloudiest volcano on Mars, Arsia Mons regularly develops water-ice clouds near its summit, especially at sunrise and during aphelion, when Mars is farthest from the Sun.

    Its Significance:

    • Recent Imaging: A new image released by NASA shows Arsia Mons piercing through morning haze, offering scientists a horizon-level view of Martian terrain.
    • Scientific Importance: Observations help researchers analyse Martian weather, seasonal climate patterns, and atmospheric behaviour.
    • Mission Relevance: Arsia Mons plays a key role in understanding Mars’ volcanic history, dust storm formation, and identifying future landing zones.
    • Exploration Support: Data from this region improve planetary weather models and assist in safe mission planning for upcoming robotic and human missions.

    Back2Basics: NASA’s Mars Odyssey Orbiter  

    • Launch: Mars Odyssey was launched in 2001, making it NASA’s longest-operating spacecraft at Mars.
    • Technology: The orbiter captured the Arsia Mons image using the THEMIS (Thermal Emission Imaging System) camera.
    • Capabilities: This instrument detects both visible and infrared light, allowing scientists to study surface temperatures, mineral compositions, and atmospheric properties.
    • Unique Technique: To photograph Arsia Mons against the Martian horizon, the orbiter rotated its camera 90 degrees, deviating from its usual ground-facing orientation.
    • Contributions: It continues to monitor climate changes, study volcanoes and dust storms, and assist with landing site selection.
    • Support Role: It also serves as a communication relay for other active Mars missions, enabling data transfer and navigation for landers and rovers.

     

    [UPSC 2016] Consider the following statements:

    The Mangalyaan launched by ISRO 1. is also called the Mars Orbiter Mission 2. made India the second country to have a spacecraft orbit the Mars after USA 3. made India the only country to be successful in making its spacecraft orbit the Mars in its very first attempt

    Which of the statements given above is/are correct?

    Options: (a) 1 only (b) 2 and 3 only (c) 1 and 3 only * (d) 1, 2 and 3

     

  • Evidence of Pre-Harappan Human Presence discovered in Rann of Kutch

    Why in the News?

    IIT Gandhinagar researchers have found evidence that humans lived in the Great Rann of Kutch 5,000 years before the Harappans, likely as coastal hunter-gatherers.

    About the Khadir Island Sites:

    • Location: Khadir Island (Khadir Beyt) is in the Great Rann of Kutch, Gujarat, near the well-known Harappan site of Dholavira.
    • Geographic Context: The island is one of 6 that were surrounded by water 5,000–6,000 years ago, due to higher sea levels.
    • Discovery Site: In 2016, researchers discovered archaeological remains near Bambhanka, about 1 km from Dholavira.
    • Site Features: Findings include house complexes, broken potsherds, marine shells, carnelian and agate flakes, and wall remnants made from random rubble masonry.
    • Shell Deposits: A 30–40 cm thick shell deposit was found on a hillock’s western edge, exposed by a pipeline trench. Similar shells were first reported in 1872 by geologist Arthur Beavor Wynne.
    • Shell Species: The Terebralia palustris shell species indicates a mangrove ecosystem once existed here.
    • Other Sites: Additional shell midden sites were discovered at Laungwali, Kunduwari, Ganeshpar, and Janan, mostly located 2–2.5 km from the coast.

    Key Findings:

    • Archaeological Significance:
      • Evidence suggests prehistoric hunter-gatherers lived here 7,000–7,500 years ago, before the Harappans.
      • Carbon dating of 15 shell samples shows they are 5,000–5,500 years older than Harappan remains.
      • A 400–500 year time lag may exist due to shellfish diets, meaning actual dates could be older.
    • Diet and Food Practices:
      • Broken shell middens and discoloured shells suggest people cooked and ate shellfish.
      • The diet likely included plants, fruits, tubers, and nuts, though no plant remains have yet been found.
    • Lifestyle and Settlement:
      • These were mobile hunter-gatherers, not permanent agriculturalists.
      • They likely moved seasonally, occupying each site for part of the year.
    • Tool Use:
      • Stone tools (flakes and cores) made of chert, jasper, chalcedony, basalt, limestone, and quartzite were found.
      • Smaller fragments may have served as arrow tips.
      • Agate, found locally, and other materials suggest trade or resource mobility.
    • Trade and Cultural Links:
      • Non-local tool stones indicate exchange networks.
      • Similarities with tools from Las Bela (Pakistan) and coastal Oman point to long-distance prehistoric connections across the northern Arabian Sea.
    [UPSC 2021] Consider the following pairs:

    Historical place : Well known for

    1. Burzahom : Rock cut shrines

    2. Chandraketugarh :Terracotta art

    3. Ganeshwar : Copper artefacts

    Which of the pairs given above is/are correctly matched?

    Options: (a) 1 only (b) 1 and 2 (c) 3 only (d) 2 and 3*

     

  • Dynamic Route Planning for Urban Green Mobility (DRUM)

    Why in the News?

    IIT Kharagpur has made a web app called Dynamic Route Planning for Urban Green Mobility (DRUM) to help people choose travel routes that are not just fast but also have cleaner air and better energy use.

    About DRUM:

    • Purpose: It is a navigation tool that prioritises air quality and energy efficiency, offering a greener alternative to traditional mapping apps.
    • Data Usage: DRUM uses real-time data on air pollution and traffic conditions to recommend optimal routes.
    • Sources: Pollution information is collected from the Central Pollution Control Board (CPCB) and the World Air Quality Index.

    Important Features:

    • Routing Logic: DRUM applies a rank-based elimination method that prioritizes time, followed by distance, pollution exposure, and energy use.
    • Technical Tools: The app uses GraphHopper for route generation and Mapbox for live traffic updates.
    • Route Options: Users can choose from 5 routes — shortest, fastest, least pollution (LEAP), least energy use (LECR), and a balanced suggested route.
    • Live Updates: It retrieves real-time route data when a query is entered, not through scheduled updates.
    • Performance: In Delhi trials, the LEAP route cut pollution exposure by over 50%, and the LECR route reduced energy use by up to 28%.
    • Non-Motorized Inclusion: DRUM will expand to serve cyclists, pedestrians, and other non-motorized users.
    • Predictive Upgrade: DRUM 2.0, currently in development, will use machine learning to forecast pollution and traffic and recommend best routes and departure times.
    [UPSC 2025] Consider the following types of vehicles:

    I. Full battery electric vehicles II. Hydrogen fuel cell vehicles III. Fuel cell electric hybrid vehicles How many of the above are considered as alternative (powertrain) vehicles?

    Options: (a) Only one (b) Only two (c) All the three* (d) None

     

  • Rare Proton Emission in Astatine Isotope

    Why in the News?

    In a groundbreaking discovery, an international team of nuclear physicists from Finland has measured the proton emission and half-life of 188Astatine (188At)—the heaviest proton-emitting isotope ever observed.

    What is Proton Emission?  

    • Atomic Structure: Atoms are made up of a nucleus containing protons and neutrons, surrounded by electrons.
    • Radioactive Decay: When atoms are unstable, they become stable by emitting particles through a process called radioactive decay.
    • Common Emissions: Most atoms emit alpha particles, beta particles, or gamma rays during decay.
    • Rare Emission: In very rare cases, an atom can emit a proton, a process known as proton emission.
    • Conditions for Emission: Proton emission occurs only in proton-rich nuclei that lie on the extreme edge of nuclear stability.
    • Detection Difficulty: These atoms are extremely hard to create in laboratories and usually exist for less than a second, making them hard to study.

    Discovery of Proton Emission in 188-Astatine:

    • What is Astatine: Astatine (At) is a radioactive, halogenous element with atomic number 85, belonging to the halogen family (Group 17) on the periodic table. It’s a rarest natural element on Earth, not naturally occurring in significant quantities due to its short half-life.
    • Research Breakthrough: Scientists from Finland, India, and Portugal jointly studied a rare isotope called 188-Astatine.
    • Method: The atom was made by bombarding a silver target with strontium ions in a high-powered accelerator.
    • Observed Event: After its formation, 188-Astatine emitted a proton and transformed into polonium within 190 microseconds.
    • Role of Indian Scientists: Experts from IIT Roorkee used computer simulations to confirm the event and revealed that the atom’s shape resembled a watermelon, elongated and stretched.

    Significance of the Discovery:

    • Scientific First: This was the first recorded instance of proton emission from astatine, a rare and heavy element.
    • Understanding Atomic Limits: The discovery helps scientists learn how unstable atoms behave and where the proton-holding limits of atomic nuclei lie.
    • Contribution to Nuclear Science: It enhances our understanding of element formation in extreme environments like stars and nuclear reactors.
    • Future Implications: Such discoveries can contribute to medical advances, especially in developing radioactive materials for cancer treatment.
    [UPSC 2024] With reference to radioisotope thermoelectric generators (RTGs), consider the following statements:

    1. RTGs are miniature fission reactors. 2. RTGs are used for powering the onboard systems of spacecrafts. 3. RTGs can use Plutonium-238, which is a by-product of weapons development.

    Which of the statements given above are correct?

    Options: (a) 1 and 2 only (b) 2 and 3 only* (c) 1 and 3 only (d) 1, 2 and 3

     

  • Digital Postal Index Number (DIGIPIN)

    Why in the News?

    The Centre has launched DIGIPIN, a geo-coded digital address system that aims to bring precision and efficiency to address identification across the country.

    Tap to read more about PIN Codes in India.

    What is DIGIPIN?

    • About: DIGIPIN is a digital address system introduced by the Government of India to improve location identification across the country.
    • Development Team: The system was developed by the Department of Posts, in collaboration with IIT Hyderabad and the National Remote Sensing Centre (NRSC) under ISRO.
    • Technology Base: It uses GNSS (Global Navigation Satellite System) data to geo-code each physical location with high accuracy.
    • Key Features:
      • Accessibility: Users can access their DIGIPIN through the India Post’s online portal, and it works seamlessly on any GPS-enabled device.
      • Nature of the System: It is open source, interoperable, and privacy-focused, meaning it is publicly accessible, works across platforms, and does not store personal data.
      • Code Format: Each location is assigned a unique 10-character alphanumeric code (e.g., 39J-53M-TJF9) that corresponds to an area of approximately 4×4 square meters.
      • Coverage Area: DIGIPIN works across urban, rural, forest, and oceanic regions throughout India, even where no formal addresses exist.

    digipin

    Significance of DIGIPIN:

    • Precision Mapping: DIGIPIN enables highly accurate geolocation, even in places without traditional street addresses or house numbers.
    • E-Commerce Enhancement: The system boosts last-mile delivery efficiency for platforms like Amazon, Flipkart, and other logistics providers.
    • Emergency Response: DIGIPIN supports police, ambulance, and fire services in reaching destinations quickly, especially in dense or unmapped areas.
    • Public Service Delivery: It improves government outreach by making it easier to deliver welfare schemes, notices, and essential services in remote areas.
    • Inclusion of Remote Regions: The system brings digital address visibility to forests, tribal regions, and maritime zones, aiding national mapping efforts.
    [UPSC 2022] Consider the following:

    1. Aarogya Setu

    2. CoWIN

    3. DigiLocker

    4. DIKSHA

    Which of the above are built on top of open-source digital platforms?

    Options: (a) 1 and 2 only (b) 2, 3 and 4 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4*

     

  • PM inaugurates Chenab Railway Bridge

    Why in the News?

    Prime Minister inaugurated the world’s highest railway bridge over the Chenab River in Jammu and Kashmir.

    About the Chenab Rail Bridge:

    • Location: The Chenab Rail Bridge is the world’s highest railway bridge, situated over the Chenab River in Reasi district, Jammu and Kashmir. It is part of the Udhampur–Srinagar–Baramulla Rail Link (USBRL).
    • Height: The bridge rises to a height of 359 metres, which is 35 metres taller than the Eiffel Tower.
    • Structure and Length: It has a total length of 1,315 metres, comprising a 530-metre approach bridge and a 785-metre steel arch bridge.
    • Project Execution: Constructed by Konkan Railway Corporation, with contributions from Afcons Infrastructure, Ultra Construction & Engineering (South Korea), and VSL India.
    • Design and Engineering:
      • IISc Bengaluru designed the foundation.
      • IIT Delhi and IIT Roorkee conducted seismic analysis.
      • DRDO ensured it is blast-proof.
    • Durability and Safety: The bridge can withstand magnitude 8 earthquakes, blasts up to 40 tonnes of TNT, temperatures as low as -20°C, and wind speeds of 266 km/h.
    • Speed and Lifespan: It supports train speeds up to 100 km/h and has a lifespan of 120 years.
    • Key Milestones: The arch closure was completed in April 2021, and the Golden Joint Ceremony was held on August 13, 2022.

    PM also inaugurated Anji Bridge:

    • About: The Anji Bridge is India’s first cable-stayed railway bridge, built over the Anji River, a tributary of the Chenab.
    • Ranking: It is the second-highest railway bridge in India, after the Chenab Bridge.
    • Design: Originally planned as an arch bridge, the design was changed to cable-stayed due to geological challenges.
    • Structure Details: The total length is 725 metres, comprising an ancillary viaduct, approach bridge, and central embankment.
    • Features: It is supported by 96 cables ranging from 82 to 295 metres, with a deck width of 15 metres.
    • Resilience: The bridge is engineered to withstand seismic activity, unstable terrain, strong winds, heavy storms, and explosions.

     

    [UPSC 2025] Consider the following statements:

    I. Indian Railways have prepared a National Rail Plan (NRP) to create a future ready railway system by 2028. II. ‘Kavach’ is an Automatic Train Protection system developed in collaboration with Germany. III. ‘Kavach’ system consists of RFID tags fitted on track in station section.

    Which of the statements given above are not correct?

    Options: (a) I and II only (b) II and III only (c) I and III only (d) I, II and III*

     

  • RBI’s Monetary Policy Committee (MPC) Decisions

    Why in the News?

    The RBI, in its Monetary Policy Committee (MPC) meeting, cut the Cash Reserve Ratio (CRR) by 1% to release ₹2.5 lakh crore into the banking system by November 2025.

    Key Changes Announced:

    • Cash Reserve Ratio (CRR) reduced by 1% in four tranches, bringing it down to 3% by November 29, 2025.
    • This CRR cut will release ₹2.5 lakh crore liquidity into the banking system by December 2025.
    • Statutory Liquidity Ratio (SLR) remains unchanged at 18% of Net Demand and Time Liabilities (NDTL).

    Key terms related to the MPC instruments:

    Explanation
    Cash Reserve Ratio (CRR)
    • CRR is the percentage of a bank’s total deposits that must be maintained as liquid cash with the RBI.
    • Banks cannot use this amount for lending or investment. No interest is earned on CRR.
    • It is used to control liquidity and inflation in the economy.
    • Increasing CRR reduces bank lending capacity; decreasing it increases liquidity.
    • Current CRR is 4.5% of Net Demand and Time Liabilities (NDTL).
    Statutory Liquidity Ratio (SLR)
    • SLR is the minimum percentage of NDTL that banks must maintain in liquid form.
    • It includes cash, gold, or approved government securities, kept with the bank itself.
    • It helps ensure bank solvency and restricts excessive credit growth.
    • Raising SLR reduces funds available for lending; lowering it boosts credit and growth.
    • It also helps the government ensure demand for its securities.
    Net Demand and Time Liabilities (NDTL)
    • It includes public deposits and balances held with other banks.
    • It excludes deposits the bank itself has with other banks.
    • Demand liabilities include current accounts and demand drafts.
    • Time liabilities include fixed deposits and recurring deposits.
    • CRR and SLR are calculated as a percentage of NDTL.
    Repo Rate
    • The repo rate is the rate at which the RBI lends short-term funds to commercial banks against government securities.
    • Banks sell securities to RBI with an agreement to repurchase them later.
    • Lower repo rate makes borrowing cheaper and boosts liquidity.
    • Higher repo rate makes borrowing costlier, reducing liquidity.
    • It is a key monetary policy tool to regulate inflation and money supply.
    Variable Rate Repo (VRR) Auction
    • VRR auction is a method where RBI conducts repo operations at variable interest rates.
    • Interest rate is determined through competitive bidding by banks.
    • It reflects real-time demand and supply of liquidity.
    • Enables more flexible and efficient liquidity management by RBI.
    Standing Deposit Facility (SDF)
    • SDF allows banks to deposit surplus funds with the RBI without providing any collateral.
    • Banks earn interest at a rate set by the RBI.
    • It is used to absorb excess liquidity from the system.
    • Part of RBI’s liquidity management framework.
    Weighted Average Call Rate (WACR)
    • WACR is the weighted average interest rate at which banks borrow and lend overnight funds in the interbank call money market.
    • It is an important indicator of short-term liquidity conditions.
    • RBI monitors WACR to guide monetary policy decisions.

     

    [UPSC 2020] If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?

    1. Cut and optimise the Statutory Liquidity Ratio.

    2. Increase the Marginal Standing Facility Rate.

    3. Cut the Bank Rate and Repo Rate.

    Select the correct answer using the code given below:

    Options: (a) 1 and 2 only (b) 2 only* (c) 1 and 3 only (d) 1, 2 and 3