Registrations by Indian companies for external commercial borrowings (ECBs) almost doubled to $49.2 billion in the financial year 2023-24 (FY24) from $26.6 billion in FY23, according to data from the RBI.

External Commercial Borrowings (ECBs):

• ECBs refer to the borrowing of funds by Indian companies from foreign sources in the form of loans, bonds, or other financial instruments.
• Purpose: It can be used to finance a variety of purposes, including the expansion of business, the acquisition of assets, and the repayment of existing debt.
• Source of ECBs: ECBs can be obtained from a variety of sources, including foreign banks, international financial institutions, and foreign subsidiaries of Indian companies.
• ECB can be in the form of rupee-denominated loans, which are repaid in Indian rupees, or foreign currency-denominated loans, which are repaid in a foreign currency.
• Regulation: ECB is subject to regulatory oversight by the RBI, which sets limits on the amount of ECB that Indian companies can obtain and the purposes for which it can be used.
• The ECBs fall under the umbrella of RBI regulations as postulated under the Master Direction - External Commercial Borrowings, Trade Credits, and Structured Obligations (Master Direction), and the Foreign Exchange Management Act, 1999 (FEMA).
• ECBs should adhere to criteria like minimum maturity period, maximum all-in-cost ceiling, permitted and non-permitted end-uses, etc.
• As of today, there are two paths to raise funds by employing ECBs: the approval route and the automatic route.
• There are a variety of eligibility regulations created by the government for availing of finance under the automatic route.
• These regulations are in relation to amounts, industry, the end-use of the funds, etc. Companies that desire to raise finance via ECB must necessarily meet these eligibility criteria; thereafter, funds can be raised without the need for approval.
• The approval route, on the other hand, mandates that companies which fall under certain pre-specified sectors must obtain the RBI''s or the government''s explicit permission, prior to raising funds through ECB.
• As per RBI guidelines, all entities except a Limited Liability Partnership are allowed to raise ECBs.

Benefits:

1. ECBs provide an opportunity to borrow large volumes of funds.
2. The funds are available for a relatively long term.
3. Interest rates are also lower compared to domestic funds.
4. ECBs are in the form of foreign currencies. Hence, they enable the corporate to have foreign currency to meet the import of machineries etc.

Risks:

• Exchange rate risk: Fluctuations in the value of the Indian rupee against foreign currencies can affect the cost of repaying the loan.
• Sovereign risk: The ability of a foreign government to repay its debt can affect the creditworthiness of foreign lenders.
• Credit risk: Foreign lenders may not have the same level of protection as domestic lenders in the event of default.
• Regulatory risk: Changes to government regulations or policies related to the ECB can affect the availability and cost of borrowing.

The Reserve Bank of India (RBI) recently issued the Framework for Recognising Self-Regulatory Organisation for the FinTech Sector (SRO-FT) for better self-governance and compliance by firms in this space.

SRO-FT Framework:

• The framework defines fintech as entities providing technological solutions for delivery of financial products and services to businesses and consumers or encompassing regulatory and supervisory compliance in partnership with traditional financial institutions or otherwise.
• The SRO-FT would be industry-led and will be responsible for establishing and enforcing regulatory standards, promoting ethical conduct, ensuring market integrity, resolving disputes, and fostering transparency and accountability among its members.
• The applicant should be set up as a not-for-profit company, and its shareholding should be sufficiently diversified, with no entity holding 10% or more of its paid-up share capital, either singly or acting in concert.
• Applicants will need to have a minimum net worth of ₹2 crore within one year after recognition as an SRO-FT or before commencement of operations, whichever is earlier.
• At least one-third of members on the board, including the chairperson, should be independent and without any active association with a fintech entity.
• Further, the majority of non-independent directors are to be representatives of FinTechs that are currently not directly regulated.
• Applicants should demonstrate the capability of establishing the necessary infrastructure to act as an SRO-FT effectively and consistently.
• It will also need to put in place systems for managing ‘user harm’ instances, which may include fraud, mis-selling, unfair practices, unauthorised transactions, or any other form of misconduct.
• While the SRO can’t open branches or offices outside India, FinTechs domiciled outside India can become members of an SRO.
• The number of SRO-FTs to be recognised would depend on the number and nature of the applicants received, and the RBI reserves the right not to grant recognition to any such application.
• If deemed necessary, RBI can nominate or depute observers on the SRO-FT''s board.

Responsibilities:

• An SRO-FT should operate objectively under the oversight of RBI, and strive towards healthy and sustainable development of the sector.
• A fintech SRO should frame a code of conduct for members, set industry benchmarks and baseline technology standards for transparency, disclosure, and data privacy, set standardised documents for specific requirements, set up a mechanism for accreditation in the fintech ecosystem, and a code of conduct for responsible advertisements and market standards.
• The SRO-FT should have adequate powers to investigate and take disciplinary action against its members for non-adherence to codes / standards / rules.
• Responsibilities towards RBI would include relaying sector-specific insights, addressing regulatory concerns, collaborate on development of the sector, foster co-operation, provide policy commensurate to the dynamic nature of the sector, act as the collective voice of its members, provide regular updates on sector developments, and collect and share relevant data.

World No Tobacco Day 2024

• World No Tobacco Day was created in 1987 by Member States of the World Health Organisation (WHO). 31st May is celebrated as the World No Tobacco Day
• Theme: The theme of World No Tobacco Day 2024 is “Protecting children from tobacco industry interference” to protect future generations and ensure that tobacco use continues to decline.
• Tobacco is a major preventable cause of disease, impacting nearly 26 crores Indians and 60 lakh industry workers, and posing significant health risks.

Status of tobacco use in India

• Global Adult Tobacco Survey (GATS): It indicates a general decline in tobacco use among adults aged 15 and older, with the exception of an increase among women between 2015-2016 and 2019-2021.
• Decline in Youth Tobacco Use: The Global Youth Tobacco Survey (GYTS) shows a decrease in tobacco use among students aged 13-15 years.
• NFHS Data: The National Family Health Survey (NFHS), which records tobacco usage data for individuals aged 15 and above, mirrors the findings of the Global Adult Tobacco Survey (GATS) by indicating a decline in tobacco consumption overall, with the exception being among women.
• WHO Framework Convention on Tobacco Control (FCTC)
• The WHO Framework Convention on Tobacco Control (WHO FCTC) is the first international treaty negotiated under the auspices of WHO which was adopted by the World Health Assembly in 2003.
• Ratification by India: India ratified the WHO Framework Convention on Tobacco Control (WHO FCTC) in 2004, the first ever international public health treaty focusing on the global public health issue of tobacco control.

Objective:

• Price and tax measures to reduce the demand for tobacco.
• Non-price measures to reduce the demand for tobacco
• Protection from exposure to second hand tobacco smoke.
• Tobacco content and product regulation

Steps taken by Government to Limit Tobacco Use:

• Cigarettes and Other Tobacco Products Act (COTPA): The Cigarettes and Other Tobacco Products Act (COTPA), 2003, superseded the Cigarettes Act of 1975, expanding its scope beyond cigarettes to include various tobacco products like cigars, bidis, chewing tobacco, and pan masala.
• National Tobacco Control Program (NTCP): It was launched in 2007 and is designed to improve the implementation of COTPA and FCTC, improve awareness about the harms of tobacco use, and help people quit it.
• mCessation: It is India’s mobile-based tobacco cessation initiative, launched in 2016 as part of Digital India.
• It employs text messaging for interactive support between users seeking to quit tobacco and program specialists.

Recently, North Korea fired a barrage of suspected ballistic missiles toward its Eastern sea.

Sea of Japan

• The Sea of Japan, also known as the East Sea, is a marginal sea of the western Pacific Ocean.
• Bordered by: It is bounded by Russia and Sakhalin Island in the north, by North Korea in the west, South Korea in the southwest, and by the Japanese archipelago (Hokkaidō, Honshū, and Kyūshū islands) in the east and south.
• Deepest Point: Sea of Japan’s  deepest point is Dohoku Seamount, an underwater volcano.
• Straits connecting Sea of Japan: Sea of Japan is connected with the East China Sea in the south via the Tsushima and Korea straits and with the Okhotsk Sea in the north by the La Perouse and Tatar straits.
• In the east, it is connected with the Inland Sea of Japan via the Kanmon Strait and the Pacific Ocean by the Tsugaru Strait.
• Meeting Point: The Sea of Japan serves as the meeting point of the cold currents from the north and the warm currents from the south.
• Largest River: Tumen or Dooman river is the largest river draining into the Sea of Japan  and serves as a border between North Korea, Russia and China.
• Major Ports:
• Russia:  Vladivostok, Sovetskaya Gavan, Nakhodka, Alexandrovsk-Sakhalinsky, and Kholmsk.
• North Korea: Hamhung, Chongjin, and Wonsan.
• Japan: Niigata, Tsuruta and Maizuru.

Marginal Sea

• A marginal sea is defined as a sea that is partially enclosed by islands, archipelagos, or peninsulas. They are usually much shallower than the open oceans and are therefore more affected by human activities.

Nation celebrates Ahilyabai Holkar's 300th birth anniversary

• Maratha queen Ahilya Bai Holkar — a great administrator and visionary with a spiritual inclination.

Ahilya Bai Holkar:

• Ahilya Bai Holkar, a great Maratha queen. She was born on May 31, 1725 to a shepherd family in Ahmednagar, Maharashtra. Strived to be recognized as a leader in her own right, beyond being the wife of Khande Rao Holkar.

Leadership and Governance:

• Took over as monarch after her husband’s death, breaking patriarchal norms.
• Led her kingdom to 30 years of peace and financial stability.
• Appointed Tukoji Holkar as the commander of her army to ensure effective military leadership.
• Guided by innate generosity and principles in her dealings with subjects.

Cultural and Religious Contributions:

• Regularly attended Purana recitals and yagnas to uphold her Hindu faith.
• Resurrected jyotirlingas across the country as a tribute to Lord Shiva.
• Renovated temples in Somnath, Varanasi, Trambak, Gaya, Pushkar, Vrindavan, Nathdwara, Haridwar, Badrinath, Kedarnath, and others.
• Installed idols in secret shrines for protection against attacks and iconoclasm.

Economic and Social Initiatives:

• Promoted the production of Maheshwari saris, empowering women and providing steady income for weavers.
• Enhanced revenue collection and supported traditional crafts in Maharashtra.
• Developed Indore, conserved forests and animals, and boosted trade and commerce.

Inclusivity and Social Harmony:

• Celebrated inclusivity and promoted social harmony among her subjects. Worked towards mainstreaming Bhil and Gond castes.

Legacy and Recognition:

• Commanded respect from contemporaries and later historians like Jadunath Sarkar, Annie Besant, and John Keay.
• Her contributions to governance, social harmony, and temple renovation are significant.
• Ahilya Bai Holkar’s rule exemplifies inclusive policymaking and effective governance. Her legacy is a blueprint for Ram Rajya in today’s era, transcending gender norms and biases.