Q.1) In the light of the recent Punjab National Bank fraud case explain how blockchain technology can prevent such types of frauds in banking sector. Is there any limitations associated with it?(GS-3)
Recently, PNB found that the SWIFT system had been misused by junior-level branch officials, who had fraudulently issued letters of undertaking (LoUs) on behalf of some companies for availing buyer’s credit from overseas branches of Indian banks.
How the technology like blockchain can prevent frauds like PNB?
- The adoption of blockchain by India’s banks could help avert frauds such as the one at Punjab National Bank.
Implications of the Blockchain technology:
- Blockchain potentially has far-reaching implications for the financial sector, and this is prompting more and more banks, insurers and other financial institutions to invest in research into potential applications of this technology.
- The RBI’s Working Group on FinTech and Digital Banking in a report highlighted that “Market participants in other securities markets are exploring the usage of blockchain or distributed database technology to provide various services such as clearing and settlement, trading.
- Blockchain utility have potential to improve internal fraud monitoring.
- Blockchain would ensure easy tracking of entries.
- If the LoUs were on the blockhain, then they would have been there for everybody to see, and every entry into the chain leaves a clear record of who made that entry, and where.
- Blockchains are immutable and distributed ledgers, which means that anything recorded on them cannot be changed or deleted, and is instantly uploaded to all users on that blockchain.
- Through blockchain’s technology is such that even human error can be greatly mitigated. Blockchain can fix this by having everything linked to the same database.
- Blockchain helps in decentralized system where one need multiple branches to give their approval before any sort of transaction is approved or an LoU is issued.
- Another big challenge that blockchain can address is providing a basis for the trust banks have in each other, thereby preventing such frauds from taking place.
Limitations of blockchain technology:
- In mature: Blockchain technologies aren’t mature yet. They are developing and evolving every day. A lot of products that are being developed as a POC on a Blockchain aren’t even Blockchain secure.
- Lack of technical understanding: There is not much understanding of the Blockchain technologies and the advantages they provide over existing technologies.
- There are certain barriers which limit blockchain technology unusable for mainstream applications. They include
1- Limited Scalability: Blockchains like Bitcoin, Ethereum have consensus mechanisms which require every participating node to verify transaction. This limits the total number of transactions a blockchain network can process.
2- Privacy: In case of public Blockchains, transactions on blockchains might appear private since it is not directly tied to your identity.
3- Access to external data: Blockchain services cannot inherently make arbitrary network requests to access data outside the network.
4- Unavoidable security flaws: There is one notable security flaw in Bitcoin and other Blockchains, if more than half of the computers working as nodes to service the network tell a lie, the lie will become the truth.
5- The number of transactions on the network is an existing limit which has caused a lot of heated debate recently.
Q.2)In purely bilateral terms, Iranian President Hassan Rouhani’s visit to India was pitch perfect in content. In this context, discuss the major takeaways from his visit to India.(GS-2)
In bilateral terms, Iranian President Hassan Rouhani’s visit to India was perfect in content.
Major takeaways from Iranian President Hassan Rouhani’s visit to India:
- The visit came amid uncertainty over the U.S.’s next move on Iran, given the Trump administration’s line on the Iran nuclear deal.
- After his meeting with Prime Minister Narendra Modi, India and Iran signed agreements and memorandums of understanding on a wide variety of issues.
- Among the announcements was the decision to award India the contract to operate the ChabaharShahid Beheshti port terminal after the project is completed.
- No announcement was made on the Farzad-B gas field that India has expressed an interest in, the joint statement indicates that positive deliberations may follow.
- There were discussions on enhancing trade and investment and ease of doing business between India and Iran.
- The discussion also included a double taxation avoidance agreement and an expert group to recommend trade remedy measures.
- India announced that it would allow Indian investment in Iran to be done in rupee terms.
- The two leaders also drew broad strokes highlighting the importance of bilateral ties between the two countries, stressing the strategic imperative for their growth.
- Iran endorsed India’s bid for a permanent seat at the UN Security Council with the veto, and praised India as a “living museum of religious diversity”.
- The joint statement issued contained tough language on the “sanctuaries for terrorism”, an issue important to both countries.
- It will be important to see what, if any, implications the Indian overtures would have on India’s ties with the U.S. and its recently upgraded relations with Israel.
- However, it is crucial that India maintain a steady course on its strategic interests with Iran.
Q.3)Write a short note on any two of the following :
a) National Urban Housing Fund (GS 3)
b) Operation Greens(GS 3)
c) Kambala(GS )
National Urban Housing Fund
- The Union Cabinet has given approval for creation of National Urban Housing Fund (NUHF) for Rs.60,000 crores.
- NUHF will facilitate raising requisite funds in next four years so that flow of Central Assistance under different verticals i.e. Beneficiary Linked Construction (BLC), Affordable Housing in Parternership (AHP), In-Situ Slum Redevelopment (ISSR) and Credit Linked Subsidy Scheme (CLSS) is sustained and construction of houses to address the gap in Urban Sector progresses smoothly.
- This fund will be situated in Building Materials and Technology Promotion Council (BMTPC), an autonomous body registered under the Societies Registration Act, 1860 under the Ministry of Housing and Urban Affairs.
- Operation Greens aims to promote farmer producers organisations, agri-logistics, processing facilities and professional management.
- The operation aims to aid farmers and help control and limit the erratic fluctuations in the prices of onions, potatoes and tomatoes.
- It was announced by Finance Minister Arun Jaitley in his budget speech.
- The government recently interacted with the stakeholders including Farmer Producer Organisations and farmers, to gather input on their concerns and suggestions thereof on the modalities of Operation Greens.
Significance of Operation greens:
- Operation Green (OG) wants to replicate the success story of Operation Flood, in fruits and vegetables, starting with three basic vegetables—tomatoes, onions and potatoes (TOP).
- The main objective of OG is to reduce price volatility in these commodities, and thereby helping farmers augment incomes on a sustainable basis, as also provide these basic vegetables to consumers at affordable prices.
Kambla in its traditional form is non-competitive with buffalo pairs made to race one after another in paddy fields, which is considered a thanksgiving to the Gods for protecting the animals from diseases.
President Ram Nath Kovind has approved the Prevention of Cruelty to Animals (Karnataka Amendment) Bill making Kambala a legal rural sport in Karnataka. With this, all apprehensions and obstacles that were preventing kambala have been cleared.
Karnataka government had promulgated Prevention of Cruelty to Animals (Karnataka Amendment) Ordinance, 2017 on July 20 last year. The Bill seeks to exempt kambala and bullock-cart racing from the ambit of the Prevention of Cruelty to Animals (PCA) Act, 1960.
Over the years, it has however become an organised sport with animal rights activists claiming that the buffaloes run in the race due to fear of being beaten, which the organizers dismiss, saying no violence is involved and that several modifications had been made to ensure that it is an animal friendly event.