Category: INTERNATIONAL RELATIONS
Pompeo against vote for Cuba on Human Rights Council
Why in news
U.S. Secretary of State has urged UN members not to support Cuba’s bid to join the organisation’s Human Rights Council.
- He has accused Cuba of being a brutal dictatorship that traffics its own doctors under the guise of humanitarian missions and urged that no country should vote Cuba onto the council.
- Under President Donald Trump, Washington has reversed an opening with Cuba initiated by former President Barack Obama, hardening a trade embargo in effect since 1962.
- Cuba, which sat on the UNHRC in 2014-2016 and 2017-2019, has applied to fill one of the regional vacancies for 2021-2023.
- UNHRC is a subsidiary of the General Assembly and the General Assembly elects the members of UNHRC.
- The Council is made of 47 Member States.
- The seats are distributed geographically and are awarded for a period of three years.
- Members are not eligible for immediate re-election after serving two consecutive terms.
- Seats are distributed as follows: o African States: 13 seats
- Asia-Pacific States: 13 seats
- Latin American and Caribbean States: 8 seats
- Western European and other States: 7 seats
- Eastern European States: 6 seats
India rejects China’s UNSC move on Kashmir
Why in news
- On the first anniversary of the revocation of Article 370, which led to the creation of the Union Territories of Jammu & Kashmir and Ladakh and ended the special status for the region, China has prompted the United Nations Security Council (UNSC) to discuss the Kashmir issue in a closed-door meeting.
- China initiated a similar move in August 2019 when it revived “The India-Pakistan Question” at the UNSC.
- The issue had not been taken up at the council since it last figured in the world body before the India- Pakistan war of 1971.
- China attempted a similar move in January 2020 as well, but it did not attract sufficient support from the UNSC members.
- India has firmly rejected China’s interference in the issue, stating it as internal affairs.
- The U.S. withdrew from the council in 2018, with Ambassador Nikki Haley calling it a cesspool of political bias and a hypocritical and self-serving organisation that makes a mockery of human rights.
RBI keeps key policy rates unchanged
Why in news
The third review of the monetary policy by the Reserve Bank of India since the COVID-19 pandemic spread in the country.
Key Policy Decisions:
- The RBI has left the key policy rates unchanged in the face of rising inflation pressures.
- It has asserted that propping up economic recovery has assumed primacy.
- The moratorium on loan repayments offered to borrowers has not been extended beyond August 31.
- Banks have been allowed to restructure loans from large corporates, micro, small and medium enterprises as well as individuals.
- This will help stem the rising stress on incomes and balance sheets.
- Also, banks are free to decide if they want to extend the moratorium on instalment repayments.
- It is expected to ease liquidity concerns at the bottom of the pyramid.
- The facility to the NHB is to shield the housing sector from liquidity disruptions and augment the flow of finance to the sector through housing finance companies.
- Funds to NABARD will help ameliorate the stress being faced by smaller NBFCs and microfinance institutions in obtaining access to liquidity.
- The scope of priority sector lending (PSL) has been broadened by including start-ups and enhancing borrowing limits for renewable energy sectors.
- The targets for lending to ‘small and marginal farmers’ and ‘weaker sections’ under the PSL will also be increased.
- Rs 10,000-crore facility has been offered to the National Bank for Agriculture and Rural Development (NABARD) and the National Housing Bank (NHB) to boost rural lending and affordable housing.
- Banks have been allowed to restructure individual borrowers’ loans by December 31, 2020, permitting a maximum extension of two years.
- Limits for loans against gold have been enhanced.
- Banks are required to assign 40% of adjusted net bank credit or credit equivalent amount of off-balance sheet exposure, whichever is higher, to priority sector, including agriculture and micro-enterprises.
Credit discipline: current account norms tightened
Why in news
To curb misuse, norms for opening current accounts have been tightened.
- The RBI has stated that no bank can open a current account for a customer who has already availed himself of credit facilities from the banking system.
- All transactions should be routed through the CC/OD account.
- This is to ensure that customers do not open current accounts even while availing themselves of credit facilities through cash credit (CC)/overdraft (OD) accounts across multiple banks.
- Currently, banks must ensure that they do not open current accounts of entities that enjoy credit facilities from the banking system without specifically obtaining a No-Objection Certificate (NOC) from the lending bank(s). But many banks do not follow such due diligence.
- Credit balances in such accounts cannot be used as margin for availing any non-fund based credit facilities.
- Restrictions have been placed on debits from the CC/OD account in certain cases.
- If a bank’s exposure to a borrower is less than 10 percent of the total exposure of the borrower in the banking system, then debits from the borrower’s CC/OD account can only be for credit to another CC/OD account of that borrower with a bank that has 10 percent or more of the exposure.
- However, credits are freely permitted.
- For instance, if a borrower enjoys credit facilities of 100 crore across several banks: of this, if Bank A has given a facility of 8 crore (under 10 percent of the total exposure) and Bank B has provided 92 crore, then debits from Bank A can only be for transfer of funds to Bank B (and not for other vendor payments).
- It can help check diversion of funds and frauds.
- The measures will also help discipline collective actions by creditors to speed up the resolution of accounts, critical in the implementation of the new restructuring framework.