- RBI: Special Open Market Operations
THE ISSUE IN NEWS
- the Reserve Bank of India (RBI) recently announced several measures to ensure orderly market conditions and smooth financial conditions.
- These measures include two more tranches of special Open Market Operations (OMOs) in bonds and a hike in the Held-To-Maturity (HTM) limit under the Statutory Liquidity Ratio (SLR) for banks.
- The move has been termed as ‘Operation Twist’. Operation Twist is the name given to a USA Federal Reserve monetary policy operation, which involves the purchase and sale of government securities to boost the economy by bringing down long-term interest rates.
- It is now being used for similar measures taken by RBI in Indian context as well.
- OMOs: RBI will conduct additional special open market operations for an aggregate amount of Rs. 20,000 crore. RBI conducted OMOs in March as well.
Open Market Operations
- Open Market Operations is the simultaneous sale and purchase of government securities and treasury bills by RBI. The objective of OMO is to regulate the money supply in the economy.
- RBI carries out the OMO through commercial banks and does not directly deal with the public.
- OMO is one of the quantitative tools that RBI uses to smoothen the liquidity conditions through the year and minimise its impact on the interest rate and inflation rate levels.
- Quantitative tools control the extent of money supply by changing the Cash Reserve Ratio (CRR), or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.
Term Repo Operations:
- RBI will also conduct term repo operations for an aggregate amount of Rs. 1,00,000 crore at the prevailing repo rate in the middle of September to ease liquidity pressures on the market.
- In order to reduce the cost of funds, banks that had availed of funds under Long-Term Repo Operations (LTROs) may exercise an option of reversing these transactions before maturity.
- LTRO is a tool that lets banks borrow one to three-year funds from the RBI at the repo rate, by providing government securities with similar or higher tenure as collateral.
- Thus, the banks may reduce their interest liability by returning funds taken at the repo rate prevailing at that time (5.15%) and availing funds at the current repo rate of 4%.
Increase in HTM limit:
- RBI raised the limit on bonds held-to-maturity (HTM) to 22% from 19.5% of Net Demand and Time Liabilities (NDTL). This means banks will have room to buy more bonds without bothering about short-term fluctuations in yields.
- HTM securities are the debt securities acquired with the intent to keep it until
- Repo Rate: It is the rate at which RBI lends money to commercial banks.
- Government Securities (G-Sec): It is a tradable instrument issued by the central government or state governments.
- Short term G-secs (with original maturities of less than one year) are called Treasury Bills. Long term G-secs (with original maturities of more than one year) or long term are called Government Bonds or Dated Securities.
- Treasury Bills are not issued by State Governments while Government Bonds or Dated securities are issues both by State and Central Governments.
- Net Demand and Time Liabilities (NDTL): It is the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other banks.
- Renati Chola Era Inscription
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A rare inscription dating back to the Renati Chola era has been unearthed in a remote village of Kadapa district of Andhra Pradesh.
- The inscription was found engraved on a dolomite slab and shale, which are part of a fragmentary pillar excavated from a farmer’s field.
- Dolomite is a sedimentary carbonate rock composed mostly of calcium magnesium carbonate.
- Shale or mudstone is a fine-grained sedimentary rock that forms from the compaction of silt and clay-size mineral particles.
- The inscription was written in archaic Telugu. It was assigned to the 8 Century AD, when the region was under the rule of Chola Maharaja of Renadu.
- Text: The inscription seems to throw light on the record of a gift of six Marttus (a measuring unit) of land to a Brahmin Some lines are indicative of the priority given to morality in those days.
- In July 2020, the Archaeological Survey of India (ASI) had found the exact location of Renati Cholas’ capital in Kadapa district of Andhra Pradesh.
- ASI deciphered two inscriptions of Renati Cholas belonging to the 7 century.
- The first inscription speaks of their capital Erikal in Kamalapuram region in Kadapa, while the other speaks about the battle of Renati Cholas andBanas.
- The Telugu Cholas of Renadu (also called as Renati Cholas) ruled over Renadu region, the present day Kadapa district.
- The earliest of this family was Nandivarman (500 AD).
- Renandu Cholas were the feudatories of the Chola dynasty. These kings claimed that they belonged to Karikala Chola’s dynasty.
- They are said to be the first kingdom to use Telugu in administration and inscriptions, instead of Sanskrit. Chola Dynasty
- The Cholas controlled the central and northern parts of Tamil Nadu from around the 8 -12 century AD.
- Their core area of the rule was the Kaveri delta, later known as Cholamandalam. Their capital was Uraiyur (near Tiruchirapalli town) and Puhar or Kaviripattinam was an alternative royal residence and chief port town.
- Tiger was their
- The Cholas also maintained an efficient navy.
- King Karikala was a famous king of the Sangam
- Many Sangam poems mention the Battle of Venni where he defeated the confederacy of Cheras, Pandyas and eleven minor chieftains.
- Trade and commerce flourished during his reign.
- He founded the port city of Puhar (identical with Kaveripattinam) and constructed 160 km of an embankment along the Kaveri River.
- Recently, the Department of Science and Technology (DST) has launched ‘Project Digital Poompuhar’ to recreate the Chola Dynasty port city (Poompuhar) in Tamil Nadu.
- Recently, the consecration (Kumbhabhishekam) ceremony was held at the Brihadisvara Temple after 23 years in Thanjavur, Tamil Nadu. The temple was built by Chola emperor Raja Raja Chola I (985-1014 AD) between 1003 AD and 1010 AD.
- African Baobab Tree
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A recent study published in the journal Scientific Reports has found that the tree ‘African Baobab’ has 168 chromosomes. Previous studies estimated that the tree has between 96 and 166 chromosomes.
The study will be useful in genetic conservation efforts.
- Type of Trees: Baobabs are deciduous trees ranging in height from 5 to 20 meters.
- Deciduous forest is a vegetation composed primarily of broad-leaved trees that shed all their leaves during one season.
- Found in: The African baobab (Adansonia digitata) is one of the nine species of baobab and is native to mainland Africa. They are also found in African Savannah.
- The African savanna ecosystem is a tropical grassland with warm temperatures year-round and with its highest seasonal rainfall in the
- It is characterized by grasses and small or dispersed trees that do not form a closed canopy, allowing sunlight to reach the ground.
- Oldest Known Angiosperm Tree: Carbon-14 dating places the age of a specimen of African baobab in Namibia at about 1,275 years.
- Tree of Life: As African baobab is a succulent, which means that during the rainy season it absorbs and stores water in its vast trunk, enabling it to produce a nutrientdense fruit in the dry season when all around is dry and arid.
- Uses: Baobab trees can live for more than a thousand years and provide food, livestock fodder, medicinal compounds, and raw materials.
- Threat: Since 2005, 9 of the 13 oldest African baobab specimens and 5 of the 6 largest trees have died or suffered the collapse and death of their largest or oldest stems, that may have been caused by the effects of climate change.
- Angiosperms are a taxonomic class of plants in which the mature seed is surrounded by the ovule (e.g. apple). This group is often referred to as
- Angiosperms are trees that have broad leaves that usually change color and die every autumn. Oaks, maples and dogwoods are examples of deciduous trees. Some angiosperms that hold their leaves include rhododendron, live oak, and sweetbay magnolia.
- Gymnosperms are a taxonomic class that includes plants whose seeds are not enclosed in an ovule (like a pine cone). Gymnosperm means ‘naked seed’. This group is often referred to as
- Gymnosperms usually have needles that stay green throughout the year. Examples are pines, cedars, spruces and firs. Some gymnosperms do drop their leaves – ginkgo, dawn redwood, and bald cypress, etc.
- Also called radiocarbon dating, it is a method of age determination that depends upon the decay to nitrogen of radiocarbon (Carbon-14).
- Carbon-14 is continually formed in nature by the interaction of neutrons with nitrogen-14 in the Earth’s atmosphere.
- The neutrons required for this reaction are produced by cosmic rays interacting with the atmosphere.
- Onam Festival
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Recently, the festival Onam was celebrated across Kerala.
- The Festival: Onam is a major harvest festival in Kerala and is celebrated to honour the home-coming of Asura king Mahabali who brought about peace and prosperity in Kerala.
- Time: It is one of the three major festivals of Kerala, celebrated during the month of Chingam, the first month in the Malayalam calendar, Kollavarsham.
- The other two major festivals of the state are Vishu and
- The 10-day harvest festival begins on Atham (first day of Onam) and concludes on Thiruvonam (last day).
- Celebration: Onam is celebrated by making Pookkalam (the flower rangolis). Other rituals are also performed which includes-Vallam Kali (the boat races), Pulikali (the tiger dances), Kummattikali (mask dances), Onathallu (martial arts), among others.
- The main attraction is the traditional Onam sadhya (grand feast).
God vs Demon Story:
- Battles between demons and gods are familiar to people everywhere. Gods emerging victorious over evil is an inseparable part of these battles.
- In India, too, these victories are celebrated in different parts of the country over the years. E.g. Rama is good, Ravana is evil. Durga is good, Mahishasur is evil.
- However, an exception to this has been the battle between Mahabali (Asura or demon) and Vamana (avatar of Vishnu), where Mahabali is revered as the unchallenged King of Malayalis.
- There are a few isolated places in India where demons are worshiped. E.g. There are some tribals in Bihar and Bengal where Mahishasur is king of Asur tribes.
- Historians see these fights between god and demon in the context of fights between brahmins and non-brahmins and tribals in the past.
- Asur is among the 9 Particularly Vulnerable Tribal Groups found in Jharkhand and are Austro-Asiatic in origin. Besides Jharkhand, members of the tribe live in pockets of Bihar, West Bengal and a few other states.
- The 2011 Census put the number of Asur at 22,459 in Jharkhand and 4,129 in Bihar.
- The Asurs claim to be descendants of Mahishasur, the buffalo-demon whom Goddess Durga kills after a spirited fight lasting nine nights.
- It’s this mythology in mainstream Hinduism that’s celebrated in the form of the nine-day-long Durga Puja, but observed as ‘Mahishasur Dasain’ among the Asurs, who hold a period of mourning during which they largely stay indoors.
- They celebrate festivals like Sarhul, Karma, Dhanbuni, Kadelta, Rajj karma, Dasahara Karam.