Daily Current Affairs (MCQ) | Date 16.12.21

Daily Current Affairs (MCQ) | Date 16.12.21

Daily Current Affairs (MCQ) | Date 16.12.21

Q1. Consider the following statements

1. All Non-Banking Finance Companies (NBFCs) are regulated by RBI only
2. RBI has launched prompt corrective action (PCA) framework for Non-Banking Finance Companies (NBFCs)

Which of the above statements is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer : b

Why is the Question ?

New RBI framework for monitoring NBFCs will help restore their financial health, limit the fallout on larger financial system
Need for prompt corrective action (PCA) framework for non-banking finance companies (NBFCs)
 With this segment growing in size — the NBFC credit to GDP ratio stood at 11.6 per cent in 2020 as per the RBI — and with strong linkages with the other parts of the financial system, their asset quality must be closely observed. More so for the larger deposit-taking NBFCs.

 A delay in taking action only complicates matters, adding to the uncertainty in financial markets.
 The collapse of NBFCs such as the Infrastructure Leasing & Financial Services (IL&FS) and Dewan Housing Finance Corporation Limited (DHFL), the fallout in the financial markets and the larger economy, the spectre of liquidity issues morphing into solvency issues, only underline the need for such a framework. Addressing the stress earlier lowers the associated costs.
 The framework will be effective from October 2022, giving the NBFCs time to bolster their balance sheets which may have been impacted due to the economic fallout of the pandemic.
 With this step, the RBI is moving towards bringing about some alignment in the supervisory framework of NBFCs with that of banks.

Salient features for PCA for NBFC:
1. Under it, certain parameters of NBFCs like bad loans and capital adequacy ratios will be monitored, and as and when these parameters fall below predefined levels, the central bank will impose restrictions on activities of NBFCs in varying degrees.
2. Under the framework, the central bank has taken three indicators, namely, the capital to risk-weighted assets ratio (CRAR), the tier I capital ratio and the net NPA ratio (NNPA) to delineate three risk thresholds.
3. If an NBFC’s position worsens on these parameters, then the entity will move higher on the risk profile. And as its risk profile deteriorates, the severity of the restrictions imposed by the RBI will increase.
4. These begin with curbs on the distribution of dividends, restrictions on guarantees and taking on contingent liabilities of group companies, and requiring the promoters/shareholders to infuse equity in the entity and reduce leverage.
5. At high-risk thresholds, curbs will also be imposed on branch expansion, capital expenditure, and operating costs. Exit from the PCA framework and the easing of restrictions will be conditional upon the NBFC not breaching the risk thresholds for four continuous quarters.

Q2. Which of the following are included in UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity?

1. Yoga
2. Kumbh Mela
3. Durga Pooja

Select the correct answer from the codes given below

a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 1, 2 and 3

Answer : d

Why is the Question ?

Durga Puja gets intangible cultural heritage tag Durga Puja in Kolkata, one of the largest cultural carnivals and street art festivals of the country, received important international recognition by making it to UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity.
Intangible cultural heritage list:

Q3. Consider the following statements with regards to Nagarhole National Park

1. It is a part of the Nilgiri Biosphere Reserve
2. Tributaries of the Krishna River flow through this park

Which of the following statements is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer : a

Why is the Question ?

Nagarhole National Park is located in Karnataka. It is a part of the Nilgiri Biosphere Reserve and tributaries of river Cauvery flow through it, namely Kabini.

Q4. Which of the following is/are correctly matched ?

Hydrogen
Type
Production Process
1 Green
Hydrogen
From natural gas with carbon capture
2 Blue Hydrogen Electrolysis of water by solar or wind-based
electricity
3 Grey
Hydrogen
From natural gas without carbon capture

Select the correct answer from the codes given below
a. 1 and 2 only
b. 2 and 3 only
c. 3 only
d. 1, 2 and 3

Answer : c

Why is the Question ?

Green Hydrogen
Hydrogen can be produced in a number of ways. One method includes using electrolysis, with electric current splitting water into oxygen and hydrogen.
If the electricity used in the process comes from a renewable source such as wind or solar then it’s termed “green” or “renewable” hydrogen.
At the moment, the vast majority of hydrogen generation is based on fossil fuels, which in turn has an effect on the environment. The IEA has said that hydrogen production is responsible for roughly 830 million metric tons of carbon dioxide each year.
So-called “blue hydrogen” refers to hydrogen produced using fossil fuels — usually natural gas — with the associated emissions captured and stored.
Green hydrogen — which is currently expensive to produce — accounted for just 0.1% of worldwide hydrogen production in 2020, according to Wood Mackenzie.

Q5. After CO2 Methane is the second most significant Greenhouse gas. Methane is emitted by

1. Rice fields
2. Digestive tracts of animals
3. Coal mines

Select the correct answer using the codes below.

a. 1 and 2 only
b. 2 and 3 only

c. 1 and 3 only
d. 1, 2 and 3

Answer : d

Why is the Question ?

Methane (CH4): Methane is emitted during the production and transport of coal, natural gas, and oil. Methane emissions also result from livestock and other agricultural practices, land use and the decay of organic waste in municipal solid waste landfills.
The paddy fields contribute a significant portion of the total methane generated. About 20% of the total methane is generated from the paddy fields.
Every time a cow burps or passes gas, a little puff of methane wafts into the atmosphere.
Each of those puffs coming out of a cow’s plumbing added together, can have a big effect on climate because methane is a potent greenhouse gas—about 28 times more powerful than
carbon dioxide at warming the Earth, on a 100-year timescale, and more than 80 times more powerful over 20 years. The effects aren’t just hypothetical: Since the Industrial Revolution, methane concentrations in the atmosphere have more than doubled, and about 20 percent of the warming the planet has experienced can be attributed to the gas.