GS Paper I- History and Geography of the World and Society.
London Retains Its Crown As World’s Top Financial Center.
- London retained its crown as the world’s top financial center in a ranking that surveys industry professionals, extending its lead over New York and Hong Kong despite ongoing uncertainty about the implications of Brexit.
- The U.K. capital fell only two points in the latest Global Financial Centres Index published by Z/Yen and the China Development Institute, the smallest decline among the top 10 centers.
- New York held on to second place, but fell 24 index points overall, “presumably due to fears over U.S. trade,” the survey said.
Highlights Of The Development–
- Frankfurt, Dublin, Paris and Amsterdam — all set to gain banking jobs that will likely have to leave London — all rose. In Asia, Hong Kong leapfrogged Singapore into third place, while other U.S. cities followed New York in losing points.
- London’s role as the worldsily’s banking hub is under threat if Brexit costs firms based in the city their ability to ea serve clients across the European Union. Most international banks currently sell their goods and services throughout the bloc from bases in London, but those so-called passporting rights are unlikely to be extended after the U.K. quits the EU in 2019.
- The index has been released twice yearly since 2007, with the three major Asian centers gradually closing the gap with London and New York over the decade. It ranks 92 cities on a 1,000-point scale, combining data ranging from tax rates to crime from bodies including the World Bank and OECD with survey responses from more than 3,000 people, addressing broad areas including the business environment, infrastructure, human capital and reputation.
GS Paper II- International Relations.
India, Russia To Hold Major Tri-Service ‘Indra’ Combat Exercise For First Time This Year (2017).
- In the first such tri-Service wargames, India will hold a major combat exercise with Russia this year to crank up military-to-military ties between the two long-standing strategic partners.
- The Indra exercise, to be held in Russia, will include assets and manpower from the Army, Navy and IAF. This is the first time India will deploy the three services together for an exercise with a country.
- Finance minister Arun Jaitley, incidentally, will also be visiting Russia in his capacity as the defence minister for the Moscow Conference on International Security on April 25-26. 2017.
Highlights Of The Development-
- Though Russia has been India’s largest defence supplier for long, notching up military sales worth over $50 billion since the 1960s, their armed forces do not exercise much together.
- In sharp contrast, India and US hold a flurry of exercises every year, ranging from the top-notch naval Malabar wargames (with Japan now a regular participant) to the counter-terror Vajra Prahar & Yudh Abhyas Ines between their armies. The US has also bagged Indian arms contracts worth $15 billion since 2007, even overtaking Russia in annual sales over the last four years.
- The major exercise comes at a time when India is planning far-reaching defence reforms to usher in some much-needed synergy among the three services, with the creation of a chief of defence staff post in the short-term as well as integrated theatre commands in the years ahead.
- While Indian and Russian armies and navies have been separately holding their Indra exercises off-and-on for the last few years, the first-ever bilateral air combat exercise “Avia Indra” was held in the Astrakhan region, near the Caspian Sea, in 2014.
- Incidentally, during the Modi-Putin summit in Goa in October 2016, India had inked pacts with Russia to acquire five S-400 Triumf advanced air defence missile systems, four Grigorivich-class frigates and 200 Kamov-226T light helicopters, while also sealing the lease of a second nuclear-powered submarine after INS Chakra, all together worth around $10.5 billion.
Sources- The Times Of India.
GS Paper III- Economic Development.
Indian Banks Need $65 Billion More Capital To Meet Basel-III Norms: Fitch.
- Fitch Ratings on 12th September, 2017 said capital needs of Indian banks have fallen from its previous estimate of $90 billion to $65 billion, largely as a result of asset rationalisation and weaker-than-expected loan growth.
- According to the credit rating agency’s latest estimates, Indian banks are likely to require around $65 billion of additional capital to meet new Basel III capital standards that will be fully implemented by the financial year ending March 2019.
- Fitch said though capital needs have fallen, state-run banks, which account for 95 per cent of the estimated shortage, have limited options to raise the capital they still require. Prospects for internal capital generation are weak and low investor confidence impedes access to the equity capital market, it added.
Highlights Of The Development-
- The agency observed that access to the Additional Tier 1 (AT1) capital market has improved in recent months, reflecting state support to help state banks avoid missing coupon payments, but around two-thirds of the capital shortage is in the form of common equity Tier 1 (CET1).
- However, weak capital positions have a major negative influence on Indian banks’ Viability Ratings, which will come under more pressure if the problem is not addressed.
- Fitch believes the government will have to pump in more than double, even on a bare minimum basis (excluding buffers), if it is to raise loan growth, address weak provision cover, and aid in effective non-performing loan (NPL) resolution — the gross NPL ratio reached 9.7 per cent in FY17, up from 7.8 per cent in FY16.
- The agency felt that the NPL resolution process being led by the Reserve Bank of India (RBI) could potentially release capital if recovery rates are as high as banks and the government are hoping for.
- There are 12 large accounts currently going through resolution, representing 25 per cent of total system NPLs, and the RBI has recently released a list of 50 more accounts that banks have been directed to resolve within three months or push them into the insolvency process.
Sources- The Hindu Business Line.