What is the News ?

The Reserve Bank of India (RBI) asked all regulated entities (REs), including banks and NBFCs, to give personal loan borrowers an option to switch over from a floating rate to a fixed rate regime at the time of resetting interest rates.

Facts About:

• When a customer takes a loan, the interest rate reset clause in the loan agreement allows the lender to review the interest rate after a certain period, as per the occurrence of a scheduled reset date of the loan. 
• The reset rate is the new interest rate that a borrower must pay effective from the scheduled reset date.
• EMI of a floating rate loan changes with periodical changes in reset interest rates.
• These rates and the calculation are not uniform for all the banks as the cost of funds differs from banks.

Changes made by RBI: 

The RBI asked banks to implement the following regulations:

• For Regulated entities (RE) :
  • At the time of sanction, REs will have to clearly communicate to the borrowers about the possible impact of a change in benchmark interest rate on the loan leading to changes in EMI and/or tenor or both.
  • Any increase in the EMI/ tenor or both will have to be communicated to the borrower immediately through appropriate channels.
  • At the time of reset of interest rates, REs will have to give the option to borrowers to switch over to a fixed rate as per their board-approved policy.
  • The policy will also specify the number of times a borrower will be allowed to switch during the tenor of the loan.
  • REs will have to disclose all applicable charges for switching loans from floating to fixed rate and any other service charges/ administrative costs in the sanction letter and also at the time of revision of charges or costs from time to time.
• For EMI or Elongation of tenor:
  • The borrowers will also be given the choice to opt for enhancement in EMI or elongation of tenor or for a combination of both options, and to prepay, either in part or in full, at any point during the tenor of the loan, with foreclosure charges.
  • The RBI said REs will have to ensure that these instructions are extended to the existing as well as new loans by December 31, 2023.

Why has RBI issued new regulations?

• RBI's Supervisory Reviews: The Reserve Bank of India (RBI) has conducted supervisory reviews and received feedback from the public.
• Unreasonable Tenor Elongation: Instances of banks significantly extending tenors of floating rate loans without proper borrower consent and communication have been identified.
• Interest Rate Changes: Banks can alter interest rates by adjusting the internal benchmark rate and spread during the loan term, potentially harming borrowers' interests and monetary transmission.
• Arbitrary EMI Resets: Borrowers complain of banks arbitrarily resetting Equated Monthly Installments (EMIs) and extending tenors without adequate notification.
• Hidden Foreclosure Charges: Borrowers are often unaware of foreclosure charges, adding to borrower dissatisfaction.
• Stress Concealment: RBI notes that prolonged tenor elongation may obscure underlying stress in banks' financial health.
• Refinancing Challenges: While theoretically possible, refinancing floating rate loans across different banks with distinct internal benchmarks is complex due to varying benchmark adjustment methods.
• Limited Borrower Options: Borrowers might feel compelled to stay with their original bank, paying higher charges, as refinancing is often impractical due to benchmark disparities.

Possible impacts:

• Interest rate of borrowers: Banks can change the interest rate by changing the internal benchmark rate and the spread during the term of the loan which could harm the interest of the borrower and also impair monetary transmission.

Benefits of Fixed rate regime:

• For borrowers:
  • Protection from Rate Hikes: Shifting to a fixed rate provides protection against potential future increases in interest rates. This can be particularly beneficial if interest rates are expected to rise in the near future.
  • Budgeting and Financial Planning: Fixed payments make it easier for borrowers to budget and plan their finances since they know exactly how much they need to allocate for their loan payments.
  • Potential Cost: Fixed interest rates tend to be initially higher than prevailing floating rates. Borrowers opting for a fixed rate might end up paying more initially compared to what they would have paid with a floating rate if rates remain relatively stable or decrease.
• For lenders:
  • Interest Rate Risk Mitigation: Lenders are less exposed to interest rate risks when borrowers opt for fixed rates. They can better manage their own interest rate risk since they know the interest income they'll receive remains constant.
  • Lending Profitability: Fixed-rate loans typically come with higher initial interest rates compared to floating-rate loans. This can lead to increased lending profitability for lenders, especially if rates remain stable or decline.
  • Potential Lower Loan Demand: Higher initial fixed rates might deter some potential borrowers who are attracted to lower initial payments offered by floating rates.
  • Limited Flexibility: Lenders might have less flexibility in adjusting loan terms for borrowers with fixed-rate loans, as the interest rate remains constant regardless of market conditions.

Source: https://indianexpress.com/article/explained/explained-economics/rbi-fixed-rate-regime-personal-loan-8898445/

What is the News ?

Recently, the Technology Development Board under Department of Science and Technology (TDB-DST) collaborated with M/s Chemlife Innovations pvt ltd.  for innovation in the Bio-Trace Minerals Project.

Facts About:

How does the collaboration between TDB and Chemlife Innovations align with India’s strategic framework for livestock development?

• The collaboration between TDB and Chemlife Innovations aligns with India’s strategic framework, including the National Livestock Mission, which seeks to enhance livestock productivity, optimize feed resources, and infuse technology into livestock management. By developing bio-trace minerals for animal feed, the project addresses crucial aspects of animal nutrition, aligning seamlessly with the mission’s objectives.

What innovative technology does Chemlife Innovations employ in their project, and how does it contribute to sustainability?

• Chemlife Innovations employs the “Accelerated Natural Bio Transformation” (ANBioT) technology, which facilitates chelation reactions using a proprietary nutrient medium. This technology operates under milder conditions and is eco-friendly, aligning with principles of sustainability by reducing environmental impact and resource consumption.

How does the use of pupa proteins contribute to the project’s eco-friendly approach?

• Pupa proteins, rich in hydroxy amino acids, are utilized in the project as an alternative to imported ligands. This economical alternative not only enhances the project’s economic viability but also aligns with India’s goal of self-sufficiency, reducing reliance on imported resources and promoting sustainable practices.

What certifications does Chemlife Innovations hold, and how do they attest to the company’s commitment to quality?

• Chemlife Innovations holds Global Certification for Animal Feed Additive Quality and Feed Safety, as well as the esteemed FAMI-QS certification. These certifications validate the company’s commitment to producing high-quality and safe products, maintaining global standards in their operations.

How does the project contribute to the circular economy, and what role does repurposing silk worm pupae meal play?

• The project contributes to the circular economy by repurposing silk worm pupae meal, reducing waste generated by the silk industry. By using locally available by-products, the project aligns with principles of sustainability, economic viability, and import substitution goals.

How does the project’s innovative product “MinBioZen” address livestock health and sustainability?

• “MinBioZen” is an innovative bio-trace mineral product developed by Chemlife Innovations. It integrates bioavailability and stability, optimizing livestock health and growth. This product showcases the company’s dedication to innovation and environmental stewardship, aligning with the goals of sustainable resource utilization.

Source: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjUsaL43aGBAxVEwjgGHU5XAs8QFnoECBQQAQ&url=https%3A%2F%2Fpib.gov.in%2FPressReleaseIframePage.aspx%3FPRID%3D1950125&usg=AOvVaw16iXZ25GRw2ND9aklzZ5ri&opi=89978449

What is the News ?

A Chennai-based start-up AgniKul Cosmos, has commenced the process of integrating its cutting-edge Agnibaan SOrTeD rocket at its private Launchpad in Sriharikota.

Facts About:

• The integration process was initiated on Independence Day on August 15, 2023.
• A successful launch would make AgniKul the second Indian space tech start-up to send its launch vehicle into space after Skyroot Aerospace.
• AgniKul: Established in 2017, by aerospace engineers Srinath Ravichandran and Moin SPM, along with IIT-Madras faculty member Prof. Sathyanarayan R Chakravarthy.

About Agnibaan SOrTeD (SubOrbital Technological Demonstrator):-

Type: single-stage launch vehicle.

Powered by: AgniKul’s patented Agnilet engine.

• Agnilet engine: It is the world’s sole single-piece 3D-printed engine.
• It is a single-piece, 6 kilonewton (kN) semi-cryogenic engine.
• Initial trial: early 2021.
• Verified at the Vikram Sarabhai Space Centre (VSSC) in Thiruvananthapuram.
• 3D printing: uses materials such as plastics and metals to convert products envisaged on computer-aided design to real three-dimensional items.

Payloads: up to 100 kg.

Altitude: 700 km

• It can carry payloads in five different configurations. (LVM3-M2 rocket)

Stages: It is a customizable launch vehicle that could be launched in one or two stages.

Unique feature: unlike traditional sounding rockets that launch from guide rails, it will lift off vertically and follow a predetermined trajectory to perform a precisely orchestrated set of maneuvers during flight.

The rocket’s first stage could have up to seven Agnilet engines, depending on the mission, which are powered by Liquid Oxygen and Kerosene.

The rocket is also designed for launch from more than 10 different launch ports.

To ensure its compatibility with multiple launch ports, AgniKul has built a launch pedestal named ‘Dhanush’.

• It will support the rocket’s mobility across all its configurations.

Source: https://economictimes.indiatimes.com/news/science/chennai-based-agnikul-prepares-for-maiden-sub-orbital-flight-of-agnibaan-rocket/articleshow/102805834.cms?from=mdr

What is the News ?

India’s first 3D printed Post Office was inaugurated in Bengaluru’s Cambridge Layout.

Facts About:

• India’s pioneering 3D-printed post office located in Bengaluru’s Cambridge Layout was recently inaugurated.

3D Printed Post Office 

• Swift Build: The 3D-printed post office was constructed in just 43 days, surpassing the original deadline by two days.
• Construction Team: Larsen & Toubro Limited undertook the project in collaboration with IIT Madras.

Technological Process

• Spatial Dimension: The post office covers an area of 1,021 square feet and was created using advanced 3D concrete printing.
• Automated Procedure: Robotic printers used an automated process to layer concrete according to the approved design.
• Strong Bonding: A specially formulated quick-hardening concrete ensured strong bonding between layers.
• Rapid Construction: With robotic precision and pre-embedded designs, the project was completed in just 43 days, far shorter than the conventional 6 to 8 months.

Advantages of 3D Printing

• Cost-Effective: The project cost ?23 lakhs, indicating a 30-40% cost reduction compared to traditional methods.
• Showcasing Technology: The project highlighted concrete 3D printing technology using indigenous machinery and robots, showcasing its scalability.

Distinctive Features

• Continuous Perimeter: The project boasted continuous perimeter construction without vertical joints.
• Flexibility: The 3D printing accommodated curved surfaces and different site dimensions, overcoming flat wall limitations.
• Structural Innovation: Continuous reinforced concrete footing and three-layer walls were created, enhancing structural integrity.
• Reduced Timeline: The innovative technique drastically reduced the construction timeline to 43 days, minimizing material wastage.

Source: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwi88OSW3aGBAxVDTWwGHafnBzMQFnoECB8QAQ&url=https%3A%2F%2Fwww.thehindu.com%2Fnews%2Fcities%2Fbangalore%2Findia-first-3d-printed-post-office-is-now-open-for-business-in-bengaluru%2Farticle67208897.ece&usg=AOvVaw1xcvOgM9Z66xFGFeSZ-7W_&opi=89978449

What is the News ?

 New data from the Aqueduct Water Risk Atlas of World Resources Institute (WRI) has been released.

Facts About:

What does it mean for a country to be exposed to extreme water stress?

• Extreme water stress signifies that a country uses more than 80% of its renewable water supply for activities such as irrigation, livestock, industry, and domestic needs. This reliance makes them vulnerable to water scarcity during periods of drought.

How does the WRI define the term ‘water stress’?

• A region is deemed ‘water stressed’ when the demand for water surpasses the available volume or when water quality limitations restrict its use for various purposes.

Which regions and countries are the most water-stressed according to the report?

• The most water-stressed regions are West Asia, North Africa, and South Asia. Notable water-stressed countries include Bahrain, Cyprus, Kuwait, Lebanon, Oman, Qatar, and others.

How is global water demand projected to change by 2050?

• Global water demand is estimated to increase by 20-25% by 2050. Additionally, watersheds facing unpredictable water supplies are expected to rise by 19%. This could result in 100% of West Asia and North Africa’s population facing extreme water stress by 2050.

What are the implications of high water stress beyond immediate concerns?

• The report emphasizes that extreme water stress affects not only consumers and industries but also has far-reaching political implications. Water stress can impact political stability, making it a critical issue to address for global leaders.

What are the economic implications of solving global water challenges?

• According to WRI’s findings, addressing global water challenges would cost around 1% of the global GDP or 29 cents per person per day from 2015 to 2030. Despite the costs, the potential economic benefits and stability improvements make it a worthwhile investment.

Source: https://chinawaterrisk.org/useful-links/aquaduct-water-risk-atlas/