Mains Q & A 12 OCTOBER 2023

Mains Q & A 12 OCTOBER 2023

Q1. In order to make sure that the Indian Banking System is resilient and capable of handling any difficulties, the RBI has implemented a number of policy measures. Discuss.

GS III – Indian Economy


During the 2008 global financial crisis, India remained a safe haven thanks to its strong and resilient local banks, which were supported by sensible regulatory measures. In a similar vein, Indian banks are unlikely to be impacted by the recent bank failures in the United States. The Reserve Bank of India’s (RBI) banking Stability Report made clear that despite global headwinds, a strong banking sector balance sheet and solid macroeconomic fundamentals are supplying strength and resilience.


Policies that are currently in place to guarantee the banking system’s resilience include:

Monetary Policy Framework and Price Stability: The RBI has been able to combat the negative impacts of COVID-19 and other external circumstances, such as the conflict in Ukraine, by utilising its flexible monetary policy frameworks.
Liquidity management has benefited from features like the e-Kuber system’s automated sweep in and sweep out (ASISO) capability and standing deposit facility (SDF).
Regulatory Framework Strengthening: The Reserve Bank of India (RBI) has prioritised regulatory framework strengthening for banks, asset reconstruction companies (ARC), payment systems, non-banking financial firms (NBFCs), and urban cooperative banks (UCBs).
establishment of domestic systemically significant banks (D-SIBs): A bank classified as D-SIB is one that is too large to fail. SBI, ICICI Bank, and HDFC Bank have been categorised as D-SIBs by the RBI. These institutions need to set aside more money and resources to protect their business.
Enhancing Supervisory system: Since 1999, India has been implementing Basel standards, which has improved risk management and fortified the supervisory system. The RBI has been more cautious and imposed a capital adequacy ratio (CAR) of 9% for scheduled commercial banks and 12% for public sector banks, despite the Basel-III Norms calling for a CAR of 8%.
The RBI also established the Prompt Corrective Action (PCA) system, which places banks with subpar financial metrics under observation.
Unified Payment Interface (UPI) and UPI123Pay introduction: Payment and Settlement Ecosystem. Numerous nations have shown interest in a platform similar to UPI, as it is acknowledged as the retail payment system with the quickest rate of growth in the world.
In order to subsidise the installation of payment acceptance infrastructure, the Payment Infrastructure Development Fund (PIDF) programme was developed.
Strengthening Financial Markets: All payment transactions involving 50 crores or more were required to have a Legal Entity Identifier (LEI), a 20-digit number that is used to identify parties to financial transactions globally.
Grievance Redress Mechanism: The RBI established the Integrated Ombudsman Scheme as a single point of contact to guarantee the prompt settlement of consumer complaints against regulated entities (REs).


The world economy is currently navigating very choppy waters. Economies that are emerging and developing (EMDEs) are more susceptible to these global spillovers. Over the previous ten years, Indian banks have also had numerous difficulties. The funding and liquidity of the RBI’s policy initiatives, however, have held up well and have been crucial in maintaining the bank’s overall credit strength and guaranteeing financial stability.

Q2. India wants to become a developed country by the year 2047. Talk about the problems and obstacles that need to be overcome in order to succeed.

GS II – Parliament related issues


Both the parliament as an organisation and its individual members are endowed with specific privileges and immunities that allow them to carry out their parliamentary responsibilities “efficiently and effectively” and without interference. Parliamentary privilege is the term for certain privileges. The Constitution’s Articles 105 and 194 address this authority, rights, and privileges.


The four main clauses of Article 105 offer the following provisions:

The Constitution’s provisions and the Houses’ procedural norms govern the exercise of free expression in Parliament.
Any statement made or vote cast by a member in Parliament or one of its committees is not subject to legal action. Additionally, the member is not responsible for any publications of papers, votes, reports, or proceedings.
Each House of Parliament’s powers, privileges, and immunities, as well as those of its members and committees, must be outlined by legislation by the Parliament. It will be those of that House, its members, and its committees immediately prior to the implementation of Section 15 of the Constitution (Forty-fourth Amendment) Act 1978, until otherwise specified.
According to the fourth article, non-members—those who are entitled by the Constitution to speak and participate in proceedings or parliamentary committees—are likewise covered by the same regulations that apply to MPs.
Article 194 delineates analogous prerogatives, entitlements, and exemptions for State legislatures, as well as their members and committees.
Parliamentary rights derive not just from the constitution but also from a number of legislation passed by Parliament, regulations established by both Houses, parliamentary norms, and court rulings.

Because there is no legislation to codify privileges, they are misused:

Absolute power of the parliament: Because of the absolute nature of its privileges and powers, the parliament is able to make laws and wield its authority to the fullest extent feasible.
Against the idea of constitutionalism: The legislative branch has too much power. For example, it can decide on its own privileges, include provisions that may violate established privileges, and determine the penalty for violating such privileges. It is obvious that this violates constitutionalism and the concept of limited government.

Examples of Abuse:

A speaker of the Legislative Assembly of Tamil Nadu ordered the editors of “The Hindu” to be arrested in 2003 because they used words like “incensed,” “fume,” and “high pitched tone” in their article about a member’s behaviour during assembly sessions, which the speaker claimed violated the member’s privilege.
A man was arrested in 2019 after making a parody film of a speech given by an Assembly member, per an order from the Speaker of the Maharashtra Legislative Assembly.

Codification of legislative privileges is necessary:

Using British MPs’ privileges was only a temporary solution. The legislators kept the status quo on this matter despite being informed during the Constitution’s drafting that parliamentary privileges would resemble those of the British House of Commons and could be amended or introduced at any time.
To reinforce citizens’ fundamental rights: Democracy requires constructive criticism and dissent. Therefore, it would be an infringement of their fundamental rights to prevent the citizens from enjoying their right to freedom of speech and expression.
Enhanced accountability: The democracy would gain from increased accountability and member administration if parliamentary privileges were legislated.
It was suggested by the National Commission to Review the Constitution that the time had come to identify and restrict the privileges thought essential to the free and autonomous operation of Parliament.


Even such privileges aid in the smooth operation of the legislature, there have been several instances of legislators abusing them. Therefore, there needs to be a balance between the legislative privileges and the citizens’ fundamental rights. “Power corrupts, and absolute power corrupts absolutely,” it is said. The parliamentary privileges ought to be codified in order to prevent this. Both the public’s trust in the parliament and Indian democracy will grow as a result of this.

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