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Marginal cost of lending rates
Citizenship amendment Bill
National register of citizens
Inner line permit
United nation human right council
protection of children against sexual offences act
- issues of young people’s addiction to mobile games and impact on society
- fortification of salt (iodine)
- issues of deficiency of iodine
- sir creek area
- assisted reproductive technologies bill
- first second and third judges case
- chief justice of India
- Afghan government
- Amazon forest fire
- United Nations framework convention on climate change
- RIC Russia India China
- s400 air defence system
- countering America’s adversaries through sanctions act
- project 75 of India
- Shanghai cooperation organisation
- size of Chinese economy
- United nation security council membership
- women’s representation in higher judiciary
- WTO domestic content requirement
- idealism as a virtue maybe on the wane, but has not vanished altogether. comment
- the challenge lies in how civil servants maintain their integrity and efficiency while serving in a system that deals with Power play and corruption .comment
- Single use plastic elimination target in India ?
- Restoring 5 million hectares between 2021 and 2030
- Bonn challenge
- land degradation
The marginal cost of funds based lending rate (MCLR)
Refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank. MCLR actually describes the method by which the minimum interest rate for loans is determined by a bank – on the basis of marginal cost or the additional or incremental cost of arranging one more rupee to the prospective borrower.
The MCLR methodology for fixing interest rates for advances was introduced by the Reserve Bank of India with effect from April 1, 2016. This new methodology replaces the base rate system introduced in July 2010. In other words, all rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 would be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark (means a reference rate determined internally by the bank) for such purposes.
Calculation of MCLR
The MCLR is a tenor linked internal benchmark (tenor means the amount of time left for the repayment of a loan). The actual lending rates are determined by adding the components of spread to the MCLR. Banks will review and publish their MCLR of different maturities, every month, on a pre-announced date.
The MCLR comprises of the following:
a) Marginal cost of funds which is a novel concept under the MCLR methodology comprises of Marginal cost of borrowings and return on networth, appropriately weighed. i.e.,Marginal cost of funds = (92% x Marginal cost of borrowings) + (8% x Return on networth) Thus, marginal cost of borrowings has a weightage of 92% while return on net worth has 8% weightage in the marginal cost of funds. Here, the weight given to return on networth is set equivalent to the 8% of risk weighted assets prescribed as Tier I capital for the bank. The marginal cost of borrowing refers to the average rates at which deposits of a similar maturity were raised in the specified period preceding the date of review, weighed by their outstanding balance in the bank’s books. i.e, Rates offered on deposits of a similar maturity on the date of review/ rates at which funds raised x Balance outstanding as a percentage of total funds (other than equity) as on any day, but not more than seven calendar days prior to the date from which the MCLR becomes effective.
b) Negative carry on account of’ Cash reserve ratio (CRR)- Negative carry on the mandatory CRR arises because the return on CRR balances is nil. Negative carry on mandatory Statutory Liquidity Ratio (SLR) balances may arise if the actual return thereon is less than the cost of funds.
c) Operating Cost associated with providing the loan product, including cost of raising funds, but excluding those costs which are separately recovered by way of service charges.
d) Tenor Premium- The change in tenor premium cannot be borrower specific or loan class specific. In other words, the tenor premium will be uniform for all types of loans for a given residual tenor.
In order to improve transmission of interest rates, the Reserve Bank of India (RBI) on Wednesday asked banks to link their lending rates on floating rate loans to retail, personal and micro, small and medium enterprises (MSME) borrowers to an external benchmark from 1 October.
(a) All new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises extended by banks from October 01, 2019 shall be benchmarked to one of the following:
– Reserve Bank of India policy repo rate
– Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL)
– Government of India 6-Months Treasury Bill yield published by the FBIL
– Any other benchmark market interest rate published by the FBIL.
(b) Banks are free to offer such external benchmark linked loans to other types of borrowers as well.
(c) In order to ensure transparency, standardisation, and ease of understanding of loan products by borrowers, a bank must adopt a uniform external benchmark within a loan category; in other words, the adoption of multiple benchmarks by the same bank is not allowed within a loan category.
The Citizenship (Amendment) Bill
The Bill amends the Citizenship Act, 1955 to make illegal migrants who are Hindus, Sikhs, Buddhists, Jains, Parsis and Christians from Afghanistan, Bangladesh and Pakistan, eligible for citizenship.
Under the Act, one of the requirements for citizenship by naturalisation is that the applicant must have resided in India during the last 12 months, and for 11 of the previous 14 years. The Bill relaxes this 11 year requirement to six years for persons belonging to the same six religions and three countries.
Key Issues and Concerns
The Bill makes illegal migrants eligible for citizenship on the basis of religion. This may violate Article 14 of the Constitution which guarantees right to equality.
The direct exclusion of Muslims from being eligible for this pathway under any circumstances makes the constitutional form and citizenship communal.
The Bill allows cancellation of OCI registration for violation of any law. This is a wide ground that may cover a range of violations, including minor offences (eg. parking in a no parking zone).
It is also argued that the Bill, if made into an Act, will nullify the updated National Registration of Citizenship (NRC).
Inner Line Permit (ILP)
It regulates visit of Indians to States where ILP regime is prevalent under Bengal Eastern Frontier Regulation, 1873.
In terms of of Section 2 of the Bengal Eastern Frontier Regulations, 1873, the Inner Line Permit system is prevalent in the three North Eastern States, namely, Arunachal Pradesh, Mizoram and Nagaland.
Citizens of other States require ILP for visiting these three States.
According to Section 3(1) of the Criminal Law Amendment Act, 1961, the Central Government may by notification in the Official Gazette, declare any area adjoining the frontiers of India to be a notified area and thereupon on and after such day as may be specified in, and subject to any exemptions for which provision may be made in the said notification, no person who was not immediately before the said day a resident in the area declared to be a notified area by the notification, shall enter or attempt to enter that area or be therein, except in accordance with the terms of a permit in writing granted to him by a person, not below the rank of a Magistrate of the First Class, specified in the said notification.
The main aim of ILP system is to prevent settlement of other Indian nationals in the States where ILP regime is prevalent, in order to protect the indigenous/tribal population.
Notification under Section 3(1) of Criminal Law Amendment Act, 1961 is issued in the interest of the safety or security of India or in the public interest.
Manipur is demanding the implementation of Inner Line Permit(ILP) in the state.
If ILP bill is passed and enacted into law, it will require outsiders to obtain a special pass or permit to enter the state.
Since Manipur is not officially a tribal State there are constitutional challenges to implement the ILP System.
Among 3 major communities of Manipur – Meities, Kukis, Nagas, the ILP System is demanded by Meties.
The govt. could implement the 6th Schedule in the hill areas which would ensure autonomy for the Kukis and Nagas in their respective regions within Manipur.
Explained: What is Article 371
Article 371 of the Constitution, which includes “special provisions” for 11 states, including six states of the Northeast.
Articles 369 through 392 (including some that have been removed) appear in Part XXI of the Constitution, titled ‘Temporary, Transitional and Special Provisions’. Article 370 deals with ‘Temporary Provisions with respect to the State of Jammu and Kashmir’; Articles 371, 371A, 371B, 371C, 371D, 371E, 371F, 371G, 371H, and 371J define special provisions with regard to another state (or states).
The ‘special provisions’ applicable to some other States are mainly in the form of empowering the Governors to discharge some special responsibilities. These States are Maharashtra, Gujarat, Manipur, Nagaland, Sikkim and Arunachal Pradesh.
Article 371 says the Governor of Maharashtra has a special responsibility to establish separate development boards for Vidarbha, Marathwada, and the rest of the State, while the Governor of Gujarat has a similar responsibility towards Saurashtra, Kutch and the rest of Gujarat. The responsibilities cover equitable allocation of funds for development expenditure, and providing facilities for technical education and vocational training.
Article 371A confers special status on Nagaland. Under this provision, no law made by Parliament in relation to Naga customary law and procedure, including civil and criminal justice matters, and ownership or transfer of land and resources will apply to Nagaland, unless the Legislative Assembly of Nagaland decides so. Further, the Governor of Nagaland has a ‘special responsibility’ regarding law and order in the State.
Article 371B contained a special provision for Assam under which a committee of legislators from the tribal areas was formed to look after their interest. The tribal areas later became Meghalaya State.
Under Article 371C, the Hill Areas of Manipur ought to have a committee of legislators. The Governor has a special responsibility to make an annual report to the President on the administration of the Hill Areas. The Centre is empowered to give directions to the State as far as these areas were concerned.
Article 371D is a detailed provision under which the President can pass an order to provide equitable opportunities and facilities to people belonging to different parts of Andhra Pradesh in public employment and education. In particular, the President can create local cadres in various classes of employment and allot civil posts to specified local cadres only.
Article 371F incorporated special provisions after the addition of Sikkim to India. One major objective was to grant protection to existing laws in Sikkim so that they are not declared unconstitutional after being brought under the Constitution of India.
Article 371G contains special provisions to preserve the religious and social practices of Mizos in Mizoram and their customary law and procedure and administration of criminal and civil justice, besides ownership of land.
Article 371H vests a special responsibility on the Governor of Arunachal Pradesh with respect to law and order. It makes clear that the Governor shall discharge this function after consulting the Council of Ministers, but exercise his individual judgment as to the action taken.
The United Nations Human Rights Council (UNHRC) is a United Nations body whose mission is to promote and protect human rights around the world. It was created in 2006.
The headquarters of UNHRC are in Geneva, Switzerland.
The UNHRC investigates allegations of breaches of human rights in UN member states, and addresses important thematic human rights issues such as freedom of association and assembly, freedom of expression, freedom of belief and religion, women’s rights, LGBT rights, and the rights of racial and ethnic minorities
The council meets three times a year to examine human rights violations worldwide.
It has mandated independent investigators to look at situations including Syria, North Korea, Myanmar and South Sudan.
Its resolutions are not legally binding but carry moral authority.
POSCO Act, 2012
The POCSO Act, 2012 was enacted to Protect the Children from Offences of Sexual Assault, Sexual harassment and pornography with due regard for safeguarding the interest and well-being of children.
The Act defines a child as any person below eighteen years of age, and regards the best interests and welfare of the child as matter of paramount importance at every stage, to ensure the healthy physical, emotional, intellectual and social development of the child.
The act is gender neutral.
The Act further makes provisions for avoiding the re-victimisation of the child at the hands of the judicial system.
It provides for special courts that conduct the trial in-camera and without revealing the identity of the child, in a manner that is as child-friendly as possible.
Hence, the child may have a parent or other trusted person present at the time of testifying and can call for assistance from an interpreter, special educator, or other professional while giving evidence.
Above all, the Act stipulates that a case of child sexual abuse must be disposed of within one year from the date the offence is reported.
The Act also provides for mandatory reporting of sexual offences.
This casts a legal duty upon a person who has knowledge that a child has been sexually abused to report the offence; if he fails to do so, he may be punished with six months’ imprisonment and/ or a fine.
The collegium system
Constituent assembly gave a central role to the Judiciary:
These issues concerning the system employed to appoint judges to the Supreme Court and the high courts are of particular salience.
The judiciary was regarded by the Constitution’s framers as central to the social revolution that the Constitution was meant to herald.
The Constituent Assembly brought such idealism to the framing of the Judicial provisions of the Constitution which is equalled only by that shown towards Fundamental Rights.
It saw the judiciary as critical to upholding the equality that Indians had longed for during colonial days, but had not gained.
Appointments to Judiciary – a consultative process:
To ensure that judges would be insulated from political influence, the Constituent Assembly agreed on a consultative process of appointing judges (where higher judges are consulted while appointing judges).
The Constitution vested in the President the power to both make appointments and transfer judges between high courts.
The President (who would act on the advice of the council of ministers) was, however, required to compulsorily consult certain authorities, including the Chief Justice of India (CJI), and, when making appointments to a high court, the chief justice of that court.
Process of appointment changed after a series of judgements:
Meaning of “consultation”:
There was some confusion over what this “consultation” of CJI by the President meant.
Does this mean just taking an opinion or does it mean “concurrence”, which would mean CJI’s advice is binding on the President?
Sankalchand Sheth case:
Originally, in 1977, in Sankalchand Sheth’s case, when interpreting the word “consultation,” the Supreme Court ruled that the term can never mean “concurrence”. (That is to say that President can appoint someone as judge even if the judges he is consulting do not agree.)
Hence, the CJI’s opinion, the court ruled, was not binding on the executive.
But nonetheless the executive could depart from his opinion only in exceptional circumstances, and, in such cases, its decision could well be subject to the rigours of judicial review.
This was a perfectly sound balance (between executive and judiciary).
First Judges Case:
Again, in 1981, in the First Judges Case, the court once again endorsed this interpretation, albeit partly.
Second Judges Case:
In 1993, in the Second Judges Case, the court overruled its earlier decisions.
It now held that “consultation” really meant “concurrence”, and that the CJI’s view enjoys primacy, since he is “best equipped to know and assess the worth” of candidates.
But, the CJI, in turn, was to formulate his opinion through a body of senior judges that the court described as the collegium.
Third Judges Case:
In 1998, in the Third Judges Case, the court clarified its position further.
It said the collegium will comprise, in the case of appointments to the Supreme Court, the CJI and his four senior-most colleagues — and, in the case of appointments to the high courts, the CJI and his two senior-most colleagues.
Additionally, for appointments to the high courts, the collegium must consult such other senior judges serving in the Supreme Court who had previously served as judges of the high court concerned.
No basis for collegium system:
Critics say that these requirements, brought in through various judgements, are not in right faith with respect to what is in the Constitution’s text.
Yet the court has been keen to hold on to this power.
99th Constitutional Amendment attempted to change it:
To change the system of appointment of judges, the Constitution was altered, through the 99th constitutional amendment.
It sought to replace the collegium with the National Judicial Appointments Commission — a body comprising members of the judiciary, the executive and the general public.
Court made collegium’s primacy part of basic structure:
The Supreme Court swiftly struck it down.
It ruled that the primacy of the collegium was a part of the Constitution’s basic structure, and this power could not, therefore, be removed even through a constitutional amendment.
Six Scorpene class submarines are being built under Project 75 by the Mazagon Dock Shipbuilders Limited (MDSL), Mumbai, under a $3.75 billion technology transfer signed in October 2005 with the Naval Group of France. The submarines, designed by French naval defence and energy company DCNS.
The Six Scorpene class submarines are
Sir Creek area