RBI norms compliant with Basel requirements

The RBI norms on large exposures for banks are not only compliant with the Basel requirements, they are stricter in some areas as well, according to the findings of the Basel Committee on Banking Supervision.

The assessment was conducted by the Regulatory Consistency Assessment Programme (RCAP) and focused on the completeness and consistency of the domestic regulations in force on June 7.

Issues related to prudential outcomes, the resilience of the banking system or the supervisory effectiveness of the Indian authorities were not in the scope of the committee’s assessment.

The assessment relied on regulations, other information and explanations provided by the Indian authorities, and it ultimately reflects the view of the Basel Committee.

In June, RBI modified the guidelines on large exposures for banks with a view to reduce the concentration of risk and align them with global norms.

The modified Large Exposures Framework (LEF) provides exclusion of entities connected with the sovereign from definition of group of connected counter-parties.

It also introduces economic interdependence criteria in the definition of connected counter-parties.

Basel Committee

The Basel Committee on Banking Supervision (BCBS) is the primary global standard setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters.

Its 45 members comprise central banks and bank supervisors from 28 jurisdictions.

It was established by the central bank governors of the Group of 10 countries in 1974.

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of banks’ calculation of the prudential ratios across jurisdictions.

The RCAP also helps member jurisdictions to identify and assess the materiality of any deviations from the Basel framework.

Basel I is the round of deliberations by central bankers from around the world in 1988 in Basel and it published a set of minimum capital requirements for banks. This is also known as the 1988 Basel Accord, and was enforced by law in the G-10 countries in 1992.

The Basel II Accord was published initially in June 2004 and was intended to amend international banking standards that controlled how much capital banks were required to hold to guard against financial and operational risks that banks face.

The third installment of the Basel Accords was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007-08. Basel III reforms are to improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spill over from the financial sector to the real economy.

India-Russia Strategic Economic Dialogue

India and Russia are working together to take their relationship to a higher level and there is scope for cooperation in agriculture and agro-processing sector, NITI Aayog vice-chairman Rajiv Kumar said while addressing the second India-Russia Strategic Economic Dialogue (IRSED).

Kumar said India is looking to expand its relationship with Russia to a qualitatively higher level with deeper economic cooperation and exchange of ideas.

India and Russia aim to achieve a bilateral trade target of $30 billion by 2025.

The strategic dialogue was established following a bilateral MoU signed between NITI Aayog and the ministry of economic development of the Russian Federation during the 19th edition of the Annual India-Russia Bilateral Summit, which was held on October 5, 2018, in New Delhi.

The first India-Russia Strategic Economic Dialogue was held in St Petersburg between November 25 and 26, 2018.

The IRSED is looking at six core areas of cooperation that expands upon the work done since the first meeting in 2018.

The dialogue included parallel roundtables which discussed areas of cooperation and concrete roadmaps for future negotiations across outlined core areas.

Digital transformation and frontier technologies: Discussions focussed on areas of collaboration between India and Russia in the digital space and frontier technologies. Various platforms developed by Russia and how these can be leveraged by India, and vice versa, and potential for future collaborations were discussed across various sectors such as payments platform, joint startup ecosystem, use of digital technology in various areas such as education, construction and skilling.

Transport infrastructure and technologies: Roundtable discussed areas of cooperation across various modes of transport such as speed upgradation, safety and passenger comfort in railways, creation of twin ports between India and Russia, ship building and river navigation, research and development, and ensuring predictability of cost and movement schedules across transport corridors.

Small and medium businesses: The roundtable recommended setting up of nodal points of interaction between the two countries. Ensuring access to finance, seamless digital banking, access to e-markets and broad-based engagement across sectors were also discussed.

Agriculture and agro-processing: Discussions noted the dynamic nature of agriculture, livestock rearing and food processing in both countries and the immense opportunities of cooperation. Recommendations included closer communication between the respective agriculture ministries to streamline collaborative efforts. Reciprocity in terms of acceptance of certification, deployment of AI-backed frontline technologies and software were also under discussion.

Tourism and connectivity: The roundtable highlighted the need to increase bilateral tourism and exploring natural avenues for economic and commercial partnerships. Expanding visitor itineraries for both countries and creating more products for tourist interest such as yoga and medical tourism were also considered. Working towards improving regional connectivity and improving government and industry cooperation was also discussed.

Industrial trade and cooperation: The roundtable saw participation across industries in energy, finance and industries which emphasised awareness exchange between the two countries in areas of investment opportunities. Exploring better business-to-business communication and collaboration, generating greater investment flows through public and private cooperation in an organised way were also discussed.

India-Russia ties

Bilateral ties with Russia are a key pillar of India’s foreign policy and Russia has been a longstanding time-tested partner of India.

Since the signing of the Declaration on the India-Russia Strategic Partnership in October 2000, India-Russia ties have acquired a qualitatively new character with enhanced levels of cooperation in almost all areas of the bilateral relationship including political, security, trade and economy, defence, science and technology and culture.

Under the Strategic Partnership, several institutionalized dialogue mechanisms operate at both political and official levels to ensure regular interaction and follow up on cooperation activities.

During the visit of Russian president to India in December 2010, the Strategic Partnership was elevated to the level of a Special and Privileged Strategic Partnership.

In December 2014, the leaders of the two countries set a target of $30 billion bilateral trade by 2025. Russian investments in India in 2017 has reached $18 billion and India’s total investment in Russia so far is $13 billion.

In 2017-18, bilateral trade was $10.69 billion, a 21.3 per cent increase over 2016-17. It includes Russian exports to India amounting to $8.6 billion and Indian exports to Russia amounting $2.1 billion.

India and Russia signed a $5 billion S-400 air defence system deal in October 2018.

Plea for setting up human rights courts

The Supreme Court has agreed to hear a plea seeking direction to the Centre for setting up human rights courts in every district of the country as mandated under the Protection of Human Rights Act.

A bench comprising Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Aniruddha Bose issued notice to all 29 states on the plea which also sought appointment of Special Public Prosecutors (SPPs) for conducting speedy trial of offences arising out of human rights violations within a time period of three months.

The petition filed by a law student, Bhavika Phore, sought direction to the Centre for providing sufficient and adequate funds for setting up of human rights court in all 725 districts in 29 states and seven Union Territories in a time-bound manner. She also sought an instruction to registrars of all the High Courts for the same.

The plea also sought the Centre and the states to adhere with and implement the provisions of Sections 30 and 31 of the Protection of Human Rights Act (PHRA).

Section 30 of the PHRA says the state government in concurrence of the Chief Justice of the concerned high court will specify for each district a human rights court for speedy trial of human rights violation, whereas Section 31 of the Act provides for the state government to specify and appoint SPPs for conducting cases.

The prtition also stated the records of the National Human Rights Commission (NHRC) from 2001 to 2010, according to which 14,231 persons died in police and judicial custody, of which 12,727 died in judicial custody - a large majority of which was a direct consequence of custodial torture.

National Human Rights Commission

The National Human Rights Commission (NHRC) was established on October, 12, 1993. The statute under which it is established is the Protection of Human Rights Act (PHRA), 1993, as amended by the Protection of Human Rights (Amendment) Act, 2006.

It is in conformity with the Paris Principles, adopted at the first international workshop on national institutions for the promotion and protection of human rights held in Paris in October 1991, and endorsed by the General Assembly of the United Nations by its Regulations 48/134 of December, 20, 1993.

The commission consists of a chairperson, four full-time members and four deemed members. The statute lays down qualifications for the appointment of the chairperson and members of the commission.

The NHRC is an embodiment of India’s concern for the promotion and protection of human rights.

Section 2(1)(d) of the PHRA defines human rights as the rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by courts in India.