Tag: RBI Norms for Alternative Investment Funds

UPSC DAILY CURRENT AFFAIRS(28TH MARCH, 2024) Reforming The Bail Law Syllabus: GS2/Polity and Governance Context Recently, the Supreme Court of India underlined that ‘there is a pressing need’ for reform in the law related to bail and stressed the government to consider a special legislation on the lines of the law in the United Kingdom. About Bail is a significant aspect of the criminal justice system in India, allowing an accused person to be released from custody under certain conditions. The concept of bail can be traced back to ancient times, with references found in Kautilya’s Arthashastra. Types of Bail: Regular Bail: Granted to a person who has already been arrested and kept in police custody. The person can apply for bail under Section 437 and 439 of the CrPC. Interim Bail: A temporary bail granted for a short period before the hearing for the grant of regular or anticipatory bail. Anticipatory Bail: Granted under Section 438 of the CrPC, it is a direction to release a person on bail, even before the person is arrested. Current Bail Laws in India: The Code of Criminal Procedure, 1973 (CrPC) governs the terms of bail in India. It does not explicitly define ‘bail’ but it does define the terms ‘bailable offence’ and ‘non-bailable offence’ under Section 2(a). Sections 436–450 of the CrPC govern the provisions relating to bail. However, the Supreme Court has noted that the current bail laws have led to overcrowded jails and hasty arrests. Bail Provisions in Bhartiya Nagrik Suraksha Sanhita (BNSS): It seeks to replace the Criminal Procedure Code, 1973 (CrPC) and brings about significant changes in the bail provisions. Key Changes in BNSS from CrPC: Police Custody: The BNSS allows up to 15 days of police custody, which can be authorised in parts during the initial 40 or 60 days of the 60 or 90 days period of judicial custody. It may lead to denial of bail for the entire period if the police have not exhausted the 15 days custody. Multiple Charges: The CrPC provides for bail for an accused who has been detained for half the maximum imprisonment for the offence. The BNSS denies this facility for anyone facing multiple charges. As many cases involve charges under multiple sections, this may limit such bail. First-time Undertrial: The BNSS includes a provision for bail if the accused serves half the maximum punishment during the trial. Simplified Bail: The meaning of bail has been simplified throughout the BNSS. Bail in acquittal cases is also simplified. Relaxed Punishment: First-time offender to be given relaxed punishment (one-fourth and one-sixth of such punishment) in plea bargaining. Need for Reform The Supreme Court, in its Satender Kumar Antil vs CBI (2022), recognised the flaws in the bail system and urged the government to consider introducing a legislation in the nature of a Bail Act to streamline the grant of bail. The Apex court also highlighted the dire situation of jails and spoke of overcrowding of undertrial prisoners, indiscriminate arrests, etc. Overcrowding in Prisons: Over 75% of India’s prison population are undertrials, which is often attributed to the ineffectiveness of India’s bail system. Presumption of Innocence: The principle of ‘presumption of innocence’ is often ignored due to the large number of undertrial prisoners. The principle that ‘bail not jail’ should be the norm is often breached rather than observed. Socio-Economic Barriers: The current bail law disproportionately burdens those from marginalised backgrounds and is often seen as anti-poor. Lack of Empirical Evidence: There is a need for empirical evidence to understand the exact nature of the problem that results in large-scale undertrial incarceration. Proposed Changes inline with the UK The Supreme Court suggested framing the law on the lines of the Bail Act of the United Kingdom (1976) that recognises bail as a ‘general right’ and focuses on reducing overcrowding of undertrial inmates in prisons. One of the key features of the Act is its aim to reduce the size of the inmate population. It makes provision for legal aid limited to questions of bail in certain cases and for legal aid for persons kept in custody for inquiries or reports. Its Section 4(1) raises the presumption of bail by stating that the law applies to a person who shall be granted bail except as provided in Schedule 1 to the Act. It makes it an offence to agree to indemnify sureties in criminal proceedings. Conclusion The call for bail law reform in India is a significant step towards ensuring justice and upholding the rights of the accused. It is hoped that the government will consider the introduction of a separate enactment in nature of a bail act to streamline the grant of bails. The proposed reforms aim to strike a balance between the individual’s right to personal freedom and the interest of society at large. Supreme Court on Preventive Detention Syllabus :GS 2/Governance In News Recently ,the Supreme Court termed preventive detention a draconian provision. What is preventive detention? Preventive detention means detention of a person by the state without trial and conviction by court, but merely on suspicion. The detention could be up to a year unless extended A pre-trial detention is not the same as preventive detention. While the former is an undertrial accused of a crime, a detainee can be taken into custody just as a preventive measure even if he has not committed a crime. Prevalence In countries such as Britain, United States and Canada, preventive detention is a wartime measure. In India, the Constitution itself makes space for preventive detention. Part III of the Constitution, which deals with fundamental rights, also gives the state the power to suspend these rights for preventive detention. Despite its emphasis on individual liberty, Part III, which forms the basic structure of the Constitution that cannot be amended, also contains provisions for preventive detention under Article 22. The powers of the state Article 22 prescribes protection against arrest and detention but has a major exception. It says in Article 22 (3) (b) that none of those safeguards apply “to any person who is arrested or detained under any law providing for preventive detention.” The remaining clauses — Article 22(4)-(7) — deal with how preventive detention operationalises. First, the state, which would be the district magistrate, would issue an order to detain a person when it is necessary to maintain “public order.” The state can delegate this power to the police as well. If the detention ordered is for more than three months, under Article 22(4), such a detention requires the approval of an Advisory Board. These Boards are set up by states and normally consist of retired judges and bureaucrats. A detainee is generally not allowed legal representation before the Board. If the Board confirms the detention, the detainee can move Court challenging the detention order. Article 22(5) of the Constitution mandates that the state is required “as soon as maybe,” to communicate to the detainee the grounds of detention and “shall afford him the earliest opportunity of making a representation against the order.” The grounds have to be read in a language that the detainee understands. Among central legislations, the National Security Act, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) are examples of laws under which preventive detention can be ordered. Concerns Preventive detention laws are a colonial legacy and conferring arbitrary powers on the state is one more iteration of the perennial threat to personal liberty that such laws pose. There is failure to adhere to procedural safeguards while dealing with the rights of detainees. Often, the quashing of detention orders comes several months after they are detained, and in some cases after the expiry of the full detention period. Failure to provide proper grounds for detention, or delay in furnishing them, and sometimes giving illegible copies of documents are other reasons. Conclusion and Way Forward Preventive detention is allowed by the Constitution, but it does not relieve the government of the norm that curbing crime needs efficient policing and speedy trials, and not unfettered power and discretion. Every procedural rigidity must be followed in entirety by the Government in cases of preventive detention, and every lapse in procedure must give rise to a benefit to the case of the detenu”. The act of protecting civil liberties, is not just the saving of rights of individuals in person and the society at large, but is also an act of preserving our constitutional ethos, which is a product of a series of struggles against the arbitrary power of the British state. Preventive detention can be ordered only in case of public disorder and not for law and order problems. The Advisory Board must consider whether the detention is necessary not just in the eyes of the detaining authority, but also in the eyes of law. Rohingya Refugee Crisis Syllabus: GS3/Internal Security Context Recently, Dozens of Rohingya refugees were rescued from the Indian Ocean after a wooden boat capsized off the Indonesian coast. About The UN estimates that one in eight Rohingya who take the sea route die or disappear in the attempt, making the Andaman Sea and Bay of Bengal among the deadliest stretches of water in the world. Last year, the number of people embarking on sea journeys increased by 21%. The UNHCR reported a 63% increase in deaths or disappearances compared to 2022. Who are the Rohingya refugees? The Rohingya are a Muslim minority ethnic group with their roots in the Arakan kingdom in Myanmar, formerly known as Burma. The Rohingya are culturally and religiously distinct from the majority Buddhist population in Myanmar. The Rohingya claim to have lived in Myanmar’s Rakhine State for generations, but successive governments in the country have disputed their ties, labelling them illegal immigrants from Bangladesh. Myanmar has denied them citizenship since 1982, thus making them the world’s largest stateless population. Their largest exodus began in 2017 driving more than 7.5 lakh people to seek sanctuary in Bangladesh to escape the brutality of security forces. Why Sea journeys? Overcrowded Camps: Most live near the Myanmar border in the Cox’s Bazar, which has grown over the years to house some of the world’s largest and most densely populated refugee camps. Lack of Basic Amenities: These overcrowded camps lack basic human necessities, forcing the Rohingya to live in harsh conditions. There is a shortage of food, access to water is inadequate, sanitation facilities are missing, healthcare is insufficient, and children are growing up without formal education. Security Concerns: Security conditions also have deteriorated over the years due to gang violence and an increase in arson attacks in camps. Over 60 Rohingya were killed in Bangladeshi camp clashes in 2023. Moving towards Muslim Majority Nations: With the option of returning to Myanmar virtually impossible, and worsening conditions in relief camps in Bangladesh, an increasing number of Rohingya have been undertaking dangerous journeys across the Bay of Bengal and the Andaman Sea to Muslim-majority nations of Indonesia and Malaysia. Concerns: The human traffickers exploit their desperation, charging exorbitant amounts to ferry them on rickety boats from Bangladesh to Indonesia. The boats with inadequate space and in the absence of basic supplies take weeks and sometimes stretch into months. Horrifying accounts of abuse during the journey, including violence against women, have been recorded. India’s Policy on Refugees India is not a signatory to the 1951 UN Convention relating to the Status of Refugees and the 1967 Protocol. All foreign undocumented nationals are governed as per the provisions of The Foreigners Act, 1946, The Registration of Foreigners Act, 1939, The Passport (Entry into India) Act, 1920 and The Citizenship Act, 1955. As per the MHA foreign nationals who enter into the country without valid travel documents are treated as illegal immigrants. India’s Stand on Rohingyas Operation Insaniyat: In 2017, India launched “Operation Insaniyat” to provide relief assistance for the refugee camps in Bangladesh. Due to the growing security concerns and the need for diplomatic balancing between Bangladesh and Myanmar. India presented three points that became the basis to drive its Rohingya approach: Restoring normalcy can happen only with the return of the displaced persons to Rakhine state. This position implied that the return of Rohingyas to Myanmar from Bangladesh and elsewhere would also mean the return of Rohingyas from India. The socio-economic development in Rakhine State is the only long-term solution. Therefore, there is a need for supporting and mobilising resources for development on its own as well as urging the international community to assist development efforts in Rakhine has been prioritised. India stand that it would maintain constructive engagement with both Myanmar and Bangladesh, and that the international community needs to handle the situation with restraint, keeping in mind the welfare of the population. Digital Financial Frauds Syllabus: GS3/Cybersecurity Context A recent report by the Indian Cyber Crime Coordination Centre revealed that digital financial frauds accounted for ₹1.25 lakh crore over the last three years. Rise in Digital Frauds According to the National Crime Records Bureau (NCRB), cybercrimes in India in 2023 resulted in a loss of ₹66.66 crore, with 4,850 reported cases. According to the National Cybercrime Reporting Portal (NCRP), in 2023, at least ₹10,319 crore was reported to be lost by victims of digital financial fraud. How Digital Frauds Work? Convincing the victim to send money, either by impersonation (fake WhatsApp/FB/Insta, social media profiles) or by giving them a false promise of greater return. By taking credentials such as Unified Payments Interface ID (UPI), Personal Identification Number (PIN), One-Time Password (OTP) or Internet banking ID/password from the victim and then using the same on other apps/websites and transferring money without the knowledge of the victim. By taking card details and convincing the victim to share OTP. How can Frauds be Prevented? Just as Google accounts do not allow logging in from a new device unless permission is granted by the former, financial institutions must be mandated to replicate this feature in their apps. The screen share facility must be disabled. Banking and financial apps must disable screen-sharing to run on top of them. In the bank statement, all banks/NBFCs/SEs must be mandated to provide comprehensible data. Currently only partly printed numbers are shown which even knowledgeable customers are unable to understand. The International Mobile Equipment Identity (IMEI) must be recorded. All banking and financial apps must be mandated to save IMEI details of the device being used. Fraudsters use fake mobile numbers and fake bank accounts which span across different States with the goal of adding layers to increase anonymity and preventing agencies from prosecuting them. Government Initiatives The Digital Intelligence Platform (DIP) is an initiative developed by the Department of Telecommunications to serve as a secure and integrated platform for real-time intelligence sharing, information exchange, and coordination among various stakeholders. Chakshu Facility: It is a newly introduced feature on the Sanchar Saathi portal that encourages citizens to proactively report suspected fraudulent communications received via call, SMS, or WhatsApp. The Central Government has also launched the National Cyber Crime Reporting Portal, to enable complainants to report complaints pertaining to all types of cyber crimes, including net and online frauds. Reserve Bank of India has issued several circulars/ guidelines related to security and risk mitigation measures for securing electronic / digital payment transactions. Conclusion The fintech and telecom industries must be mandated to take certain preventive steps in their technology and provide data in a manner which enables speedier investigation, the prevention, detection, recovery and conviction will be much more effective. Faster availability of data will make it easier to identify and convict pan-Indian gangs. FACTS IN NEWS Mohiniyattam Syllabus :GS 1/Art and Culture In News Kalamandalam university allowed boys in Mohiniyattam, breaking gender norms. About Mohiniyattam It is one of the famous classical dances of India that developed and remained popular in the state of Kerala. Mohiniyattam dance gets its name from the word ‘Mohini’ – a historical enchantress avatar of the Hindu god Vishnu, who helps the good prevail over evil by developing her feminine powers. Mohiniyattam’s roots, like all classical Indian dances, are in the Natya Shastra – the ancient Hindu Sanskrit text on performance arts. However, it follows the Lasya style described in Natya Shastra which is delicate, eros-filled and feminine. It is traditionally a solo dance performed by women after extensive training. The repertoire of Mohiniyattam includes music in the Carnatic style, singing and acting a play through the dance, where the recitation may be either by a separate vocalist or the dancer herself. Carbon Credit Scheme of Australia Syllabus: GS3/Environment Context: A recent study found that a world-leading reforestation project under the Australian Carbon Credit Unit (ACCU) Scheme had been an underperforming ‘catastrophe’. About the ACCU Scheme: It is a key part of the Australian carbon market. It encourages individuals and businesses to undertake projects that reduce emissions or store carbon. Individuals, sole traders, companies, local, state and territory government bodies, and trusts can participate in it. It can be achieved by using new technology, upgrading equipment, changing business practices to improve productivity or energy use, and changing the way vegetation is managed. How Does It Work? The participants run projects that reduce or avoid greenhouse emissions (emissions avoidance) or remove and store carbon from the atmosphere (sequestration). Participants can earn one ACCU for every tonne of carbon dioxide equivalent (t CO₂-e) emissions their project stores or avoids. These ACCUs can then be sold on the secondary market or to the Australian Government by entering a carbon abatement contract. Criticisms and Controversies: The research found that across almost 80% of native forest in the deserts of Australia, forest growth was either stagnant or that woodlands were shrinking. On the other hand, it argued that Australia had used these projects to bank millions of tonnes in questionable carbon credits. T+0 Settlement Cycle ( or Same Day Settlement) Syllabus: GS3/Indian Economy Context: The Indian Stock Market recently introduced the T+0 settlement cycle, marking a significant shift from the existing T+1 settlement cycle. About the T+0 Settlement Cycle: The trades involving shares are settled on the same day they occur in the T+0 system. It means shares are transferred to the buyer’s account and funds are deposited in the seller’s account on the same day of the trade. It is a departure from the current T+1 cycle, where trades are settled by the next day. The T+0 settlement will be optional for 25 stocks and will be applicable only for trades executed between 9:15 a.m. and 1:30 p.m. Phased Implementation: The T+0 settlement cycle will be executed in two phases. First Phase: Trades executed up to 1:30 pm will be considered for settlement, which must be completed by 4:30 pm. Second Phase: It extends trading time till 3:30 pm, discontinuing the first phase. Impact on Investors and Traders: The T+0 settlement cycle is expected to benefit investors and traders by providing immediate liquidity. It means there will be increased trading opportunities and reduced settlement risks. The current T+1 system, sellers receive only 80% of their cash on the day of sale, with the remaining 20% withheld until the following day. However, with the new T+0 settlement system, sellers will have immediate access to 100% of their cash on the day of the transaction. RBI Norms for Alternative Investment Funds Syllabus: GS3/Economy Context The Reserve Bank of India (RBI) has modified norms for regulated entities (REs) concerning their investments in Alternative Investment Funds (AIFs). About AIFs: It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP). Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India. Need for the Regulations: There are concerns that some lenders were misusing the AIF route for evergreening loans, a practice where lenders extend new loans to pay off old ones. This forced banks and NBFCs to make steep provisions, and tightened capital flows for AIFs. Regulations: REs need to only set aside provisions to the extent of their investment in the AIF scheme which is further invested by the AIFs in a debtor’s company and not the entire investment in the AIF scheme. With a view to ensuring uniformity in implementation among the REs, it is advised that downstream investments shall exclude investments in equity shares of the debtor company of the RE, but shall include all other investments, including investment in hybrid instruments. Mushk budji Rice Syllabus: GS3/Economy Context In a study recently published in Nature Scientific Reports mentioned that altitude and temperature play an important role in the development of aroma of Mushk budji Rice. About It is the indigenous aromatic rice variety from Kashmir. It was on the verge of extinction owing to the prevalence of rice blast disease, its low yield, and lack of profitability. But a programme launched in 2007 by SKUAST scientists saw the crop make a slow comeback. Mushk budji Rice of Anantnag District in Jammu and Kashmir received the Geographical Indication Tag in 2023. Lokpal of India Syllabus :GS 2/Polity and Governance In News Justice Ritu Raj Awasthi sworn in as judicial member, Lokpal . About Lokpal of India The Lokpal is the first institution of its kind in independent India,established under the Lokpal and Lokayuktas Act 2013 to inquire and investigate allegations of corruption against public functionaries who fall within the scope and ambit of the above Act. Organizational Structure: The Lokpal consists of a Chairperson and eight Members out of whom 50% are Judicial Members. The Chairperson and the Members are appointed by the President of India by warrant under his hand and seal and hold office for a term of five years from the date on which they enter upon the office or until they attain the age of 70 years, whichever is earlier. The salary, allowances and other conditions of services of the Chairperson are the same as that of Chief Justice of India. The salary, allowances and other conditions of services of the Members are the same as that of a Judge of the Supreme Court. Jurisdiction And Functions Of Lokpal : The Lokpal has jurisdiction to inquire into allegations of corruption against anyone who is or has been Prime Minister, or a Minister in the Union government, or a Member of Parliament, as well as officials of the Union Government under Groups A, B, C and D. Also covered are chairpersons,members, officers and directors of any board, corporation, society, trust or autonomous body either established by an Act of Parliament or wholly or partly funded by the Union or State government. It also covers any society or trust or body that receives foreign contribution above ₹10 lakh (approx. US$ 14,300/- as of 2019). A complaint under the Lokpal Act should be in the prescribed form and must pertain to an offence under the Prevention of Corruption Act, 1988 against a public servant. The Lokpal is vested with the power of search and seizure and also powers under the Civil Procedure Code for the purpose of conductiong preliminary inquiry & investigation and power of attachment of assets and taking other steps for eradication of corruption. Lokpal will have power of superintendence and direction over any central investigation agency including CBI for cases referred to them by the Lokpal. Do you know ?– India is a signatory to the United Nations Convention against Corruption.– The commitment of the Government to provide clean and responsive governance is reflected in passing of the legislation and creation of the body of Lokpal, to contain and punish acts of corruption. Global Trade Update Report: UNCTAD Syllabus: GS3/ Economy In News Global Trade Update report released by the United Nations Conference on Trade and Development (UNCTAD). Key Points Overall, the value of global trade fell by 3% in 2023. For trade in goods, it dropped by 5% but grew by 8% for trade in services. Report warned that the logistical challenges such as shipping disruptions in the Red Sea, Black Sea and Panama Canal caused supply chain disruption and high costs. Services exports from India grew by 14 percent in 2023. UNCTAD Established in 1964 to promote trade, investment, and development in developing countries. It is a permanent organ of the United Nations (UN) General Assembly. UNCTAD has approximately 190 members. It is headquartered in Geneva, Switzerland. Functions: Comprehend options to address macro-level development challenges Achieve beneficial integration into the international trading system Diversify economies to make them less dependent on commodities Limit their exposure to financial volatility and debt. H5N1 Bird Flu Syllabus: GS3/ S&T In News Since 2020, H5N1 flu has been posing an existential threat to birds and wildlife across the globe. About Bird flu: Also known as avian flu, is an infectious viral illness that mainly infects and spreads among poultry and some wild birds. There are different strains of bird flu virus. Depending on the origin host, influenza A viruses can be classified as avian influenza (bird flu, subtypes A H5N1 and A H9N2), swine influenza (swine flu, subtypes A H1N1 and AH3N2). H5N1 is a highly pathogenic flu virus. The “H” and “N” in the name of a flu virus stand for hemagglutinin and neuraminidase, two proteins on the surface of the virus that allow it to enter and exit host cells. Hemagglutinin and neuraminidase were the first aspects of the flu virus to be identified hence it was named so.

Tag: RBI Norms for Alternative Investment Funds

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