Answered: Mains Marathon – UPSC Mains Current Affairs Questions – May 18

1. Despite the high level of NPAS, there has been no banking crisis. In your opinion, what is the reason for the same?(GS 3)

Financial Express | Live Mint

Why was there no banking crisis:-

  • The latest move of empowering RBI to directly intervene in the resolution process is expected to speed up the exercise.
  • Apart from a series of resolution schemes to clean up the bad assets, in 2015, the banking regulator conducted a first-of-its-kind asset quality review and asked them to set aside money for three kinds of loans.
  • It has revised and tightened more-than-a-decade old prompt corrective action or PCA structure; encouraged banks to make provisions at higher rates for the advances given to the stressed sectors of Indian economy
  • It asked banks to make suitable disclosures in case there are any material divergences in banks’ asset classification and provisioning to that of the RBI norm in the ‘Notes to Accounts’ of their upcoming annual financial statements.
  • Banking Regulation Act has been amended through an ordinance and the RBI has been given more powers to direct banks and speed up the process.
  • The latest PCA framework talks about three risk thresholds for net NPAs 6% to less than 9%, 9% to less than 12%, and 12% and above. Depending on the scale of deterioration in a bank’s health, the RBI can take actions, varying between a clamp-down on branch expansion to higher provisions, removal of the management and even superseding the board..
  • Banks have also been asked to make higher provisions for standard advances given to the stressed sectors of the economy, following a board-approved policy which must be reviewed every quarter.
  • RBI in turn has marginally diluted the JLF scheme to accelerate the pace of resolution under JLF/CAP, voicing urgency to adhere to timelines.
  • The government, through an ordinance, modified the Banking Regulation Act to give the RBI greater powers to address NPLs.
  • power to direct banks to initiate insolvency proceedings in case of default under the insolvency code
  • specific instructions to banks for resolution of stressed loans
  • appointment of authorities to advise banks on resolution issues.
  • Key changes made by RBI under the framework for revitalising distressed assets
  • decision is binding on all banks if approved by 60% by value of loans (75% earlier) and 50% by number of creditors (60% earlier)
  • decisions taken in the JLF will be unconditional/unambiguous
  • executives representing individual banks in meetings should have requisite approval to take decisions. Decisions taken will have implicit power of comfort from the board of these banks.
  • Monetary penalties will be levied if the above is not adhered to.

India needs to sensitize the bankers on risk management and monitoring of projects as much as it needs to address the core issues in real economy to avoid the nightmare of certain banks being buried under the pile of bad loans.

2. As an advocate of a multipolar Asia, India has done well to sit out the BRI forum. Critically evaluate.(GS 2)



  • Thus, as the date of the Belt and Road Forum for International Cooperation

Yes,India has done well to sit out of BRI forum:-

  • The moot point remains that India is not able to carry any of the big powers, including the US, and especially its neighbors along on the vital question of Westphalian sovereignty as in the Chinese conveners summit 29 countries participated and showed interest.
    • Critics say India was “isolated” even in the South Asian region since all neighbouring countries except Bhutan chose to attend despite India’s boycott.
  • By boycotting the summit rather than showing up and making its voice heard loud and clear in the comity of nations, India has in fact sent out a message that it will make proforma noise on this issue but actually acquiesce to the fait accompli.What this lack of dexterity does is allow the Chinese embrace of Pakistan to get even tighter.
  • Thefact remains that India would have to deal with Pakistani and Chinese navies jointly patrolling the Arabian Sea off India’s western seaboard and directly threatening India’s energy and resource supply lines.
  • With Hambantota also being developed as a Chinese resourced port in Sri Lanka, the Gwadar-Hamabantota axis may end up emerging as an access denial area in India’s home waters.
  • With the theme of “boosting cooperation and realising win-win development,” the forum seeks to cement consensus on globalisation as the continuing norm of development.

Genuine Concerns of India:-

  • India’s Achilles’ heel is the China Pakistan Economic Corridor, popularly known as CPEC. The CPEC is seen as a part of the Belt and Road initiative .India had vociferously objected to it on the very question of sovereignty.
  • A major security concern is CPEC giving China control of Pakistan’s Gwadar port. Add to that OBOR boosting the Chinese presence in the Indian Ocean. OBOR will turn China’s old ‘string of pearls’ policy to encircle India into a reality.

3. Law is nothing other than a certain ordinance of reason for the common good, promulgated by the person who has the care of the community. Discuss.(GS 4)


  • Law is an ordinance of reason because it must be reasonable or based in reason and not merely in the will of the legislator.
  • It is for the common good because the end of law is the good of the community it binds, and not merely the good of the lawmaker or a special interest group.
  • It is made by the proper authority who has “care of the community”, and not arbitrarily imposed by outsiders. It is promulgated so that the law can be known.
  • Social groups are ordered, both by mutual coordination and by sharing a common goal. Law is seen as central to this, but its coercive function is secondary.
  • Law does not inherently require coercion, because even a world of saints would require laws to make life predictable.
  • In democracies especially laws are legislated for common good without which there are active mechanisms like Supreme court which upheld the tenets of the constitution of the laws are not abiding by it.


  • States can and do prohibit actions that are necessary for someone’s flourishing. It can be argued that states don’t really create clear, consistent rights and rules at all, because they operate with a double standard of sovereignity which suspends such norms.
  • Sometimes laws go beyond in public interest as seen in many countries lack of necessary abortion laws without which some of the innocent women have lost lives.
  • Sometimes laws are not evolved to keep in line with the current changes of the society and are redundant .In this case they harm the community more.

Overall laws are made for the benefit of the larger good.With effective checks laws can be made more inclined to common good as well.


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