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Current Affairs for UPSC IAS Exam – 28 March 2020


  1. RBI cuts rates, allows loan moratorium
  2. India set to participate in WHO’s medicine trial
  3. German researchers plan mass immunity study to track virus
  4. Supreme Court relaxes BS-IV deadline
  5. World is now in recession: IMF
  6. Moody’s cuts India GDP growth forecast


Focus: GS-III Indian Economy

Why in news?

  • The Reserve Bank of India (RBI) has opened up the liquidity floodgates for banks even as it reduced the key interest rate sharply by 75 bps and allowed equated monthly instalments (EMIs) to be deferred by three months in a move to fight the economic impact of the countrywide lockdown to check the spread of novel coronavirus.
  • The meeting of the Monetary Policy Committee (MPC) which was scheduled for March 31 and April 1,3, was advanced to March 27 due to the unprecedented crisis.
  • The repo rate was reduced to by 75 bps 4.4% while the reverse repo rate was cut by 90 bps point to 4%.
  • The higher reduction in the reverse repo rate was aimed at prompting banks to lend more rather than keeping their excess liquidity with the RBI.
COVID 19 The Reserve Bank of India has permitted a three-month deferral on all term loan payments repo rate cut by 0.75 percentage points to increase liquidity

What RBI had to say?

  • Everything hinges on the depth of the COVID-19 outbreak, its spread and its duration.
  • Clearly, a war effort has to be mounted to combat the virus, involving both conventional and unconventional measures.

Highlights of what RBI has done:

  • While cutting benchmark rates, the RBI has continued with its accommodative stance.
  • Apart from cutting the repo rate, RBI has also reduced the cash reserve ratio of banks which released ₹1.37 lakh crore liquidity.
  • This, along with other measures, will see an infusion of ₹3.74 lakh crore into the banking system.
  • RBI has also allowed banks to defer payment of EMIs on home, car, personal loans as well as credit card dues for three months till May 31.
  • Since non-payment will not lead to non-performing asset classification by banks, there will be no impact on credit score of the borrowers.
How they moved 
Repo rate reduced by 75 points 
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by 90 bps point to 4% 
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üquidity the RBI 

Home and auto EMIs, credit card dues deferred by three months

  • In a move to protect borrowers financially amid the nationwide lockdown, the Reserve Bank of India (RBI) has allowed all banks and financial institutions, including non-banking finance companies, to extend a three-month moratorium period on the instalments due between March 1, 2020 and May 31, 2020 for all term loans.
  • The relaxation is also applicable on consumer loans such as auto loans, home loans and personal loans, as well as credit card outstanding dues.
  • A consumer may now choose not to pay the monthly equated instalments on their loans for the next three months.
  • The repayment schedule for such loans, as also the residual tenor, will be shifted across the board by three months after the moratorium period.
  • The three-month moratorium on all term loan instalments, along with deferment of interest on working capital, will help mitigate debt servicing burden due to COVID-19 disruption, and prevent transmission of financial stress to various sectors of the economy.

Liquidity floodgates opened

  • In a move to infuse sufficient liquidity into the banking system, the Reserve Bank of India has reduced the cash reserve ratio (CRR) requirement by 100 bps, increased the cap for liquidity available under the marginal standing facility, and will auction long-term repo of ₹1 lakh crore.
  • The monetary policy committee reduced the repo rate by 75 bps to 4.4% and consequently the Marginal Standing Facility (MSF) rate was reduced to 4.65%.
  • These three measures will infuse ₹3.74 lakh crore into the banking system.
  • The cash reserve ratio — the proportion of liabilities which a bank has to set aside as cash — has been reduced from 4% to 3%.
  • The 100 bps reduction in CRR will free up ₹1.37 lakh crore liquidity for the banks.
  • Banks do not earn any interest for maintaining CRR balance. With this reduction, they can deploy the liquidity in interest-earning assets.
  • RBI also increased liquidity available to banks under the marginal standing facility from 2% of the statutory liquidity ratio (SLR) to 3% with immediate effect.
  • This measure should provide comfort to the banking system by allowing it to avail itself of an additional ₹1,37,000 crore of liquidity under the LAF window in times of stress at the reduced MSF rate announced in the MPC’s resolution.

Monetary Policy Committee (MPC)

  • The Monetary Policy Committee of India is responsible for fixing the benchmark interest rate in India.
  • The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
  • The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
  • They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.
  • The Governor of Reserve Bank of India is the chairperson ex officio of the committee.
  • The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India’s Monetary Policy.
  • The monetary policy are published after every meeting with each member explaining his opinions.
  • The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
  • Key decisions pertaining to benchmark interest rates used to be taken by the Governor of Reserve Bank of India alone prior to the establishment of the committee.
  • The Governor of RBI is appointed and can be disqualified by the Government anytime.

Cash Reserve Ratio (CRR)

  • The Reserve Bank of India or RBI mandates that banks store a proportion of their deposits in the form of cash so that the same can be given to the bank’s customers if the need arises.
  • The percentage of cash required to be kept in reserves, vis-a-vis a bank’s total deposits, is called the Cash Reserve Ratio.
  • The cash reserve is either stored in the bank’s vault or is sent to the RBI.
  • Banks do not get any interest on the money that is with the RBI under the CRR requirements.
  • The Cash Reserve Ratio in India is decided by RBI’s Monetary Policy Committee in the periodic Monetary and Credit Policy.
  • CRR is one of the major weapons in the RBI’s arsenal that allows it to maintain a desired level of inflation, control the money supply, and also liquidity in the economy.
  • The lower the CRR, the higher liquidity with the banks, which in turn goes into investment and lending and vice-versa.
  • Higher CRR can also negatively impact the economy as lesser availability of loanable funds, in turn, slows down investment. It thereby reduces the supply of money in the economy.

Statutory Liquidity Ratio (SLR)

  • Every bank must have a specified portion of their Net Demand and Time Liabilities (NDTL) in the form of cash, gold, or other liquid assets by the day’s end. The ratio of these liquid assets to the demand and time liabilities is called the Statutory Liquidity Ratio (SLR).
  • An increase in the ratio constricts the ability of the bank to inject money into the economy.
  • RBI is also responsible for regulating the flow of money and stability of prices to run the Indian economy.
  • Statutory Liquidity Ratio is one of its many monetary policies for the same.
  • SLR (among other tools) is instrumental in ensuring the solvency of the banks and cash flow in the economy.

Difference between SLR & CRR

Both SLR and CRR are the components of the monetary policy.

The following table gives a glimpse into the dissimilarities:

Statutory Liquidity Ratio (SLR) Cash Reserve Ratio (CRR)
In the case of SLR, banks are asked to have reserves of liquid assets which include both cash and gold. The CRR requires banks to have only cash reserves with the RBI
Banks earn returns on money parked as SLR Banks don’t earn returns on money parked as CRR
SLR is used to control the bank’s leverage for credit expansion. The Central Bank controls the liquidity in the Banking system with CRR.
In the case of SLR, the securities are kept with the banks themselves which they need to maintain in the form of liquid assets. In CRR, the cash reserve is maintained by the banks with the Reserve Bank of India.


Marginal Standing Facility (MSF)

  • Marginal Standing Facility (MSF) is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely.
  • Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under liquidity adjustment facility or LAF in short.
  • The MSF rate is pegged 100 basis points or a percentage point above the repo rate. Under MSF, banks can borrow funds up to one percentage of their net demand and time liabilities (NDTL).

Liquidity Adjustment Facility (LAF)

  • Liquidity Adjustment Facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements.
  • LAF is used to aid banks in adjusting the day to day mismatches in liquidity.
  • LAF consists of repo and reverse repo operations.
  • Repo or repurchase option is a collaterised lending i.e., banks borrow money from Reserve bank of India to meet short term needs by selling securities to RBI with an agreement to repurchase the same at predetermined rate and date.

Differences between LAF and MSF

 LAF- Liquidity Adjustment Facility MSF- Marginal Standing Facility
This is for short term Minimum bidding amount is 5 cr. All clients of RBI are eligible to bid. Bank cannot sell Government security to RBI that is part of bank’s SLR quota. Bank can borrow any amount of money as long as it has the securities to sell. This is for long term Minimum bidding amount is 1 cr. Only scheduled commercial banks can bid. Bank can sell the Government security from its SLR quota to RBI. Bank can maximum borrow upto 2% of its NDTL.


Focus: GS-III Science and Technology

Why in news?

  • India is all set to join World Health Organisation’s “Solidarity trial” aimed at rapid global search for drugs to treat COVID-19.
  • The country has stayed away so far from this multi-country trial “due to its small sample size and because our contribution would have looked minuscule,” said Head of Epidemiology and Communicable diseases at Indian Council of Medical Research (ICMR).

Details and India’s position

  • The Solidarity Trial will test four different drugs or combinations — remdesivir, a combination of two drugs, lopinavir and ritonavir, the two drugs plus interferon beta, and chloroquine — and will compare their effectiveness to what is called standard of care, the regular support hospitals treating COVID-19 patients use now.
  • There are 30 vaccine groups that are operational worldwide right now looking at COVID-19, with five having gone into animal-toxicity study.
  • India will express its interest to participate in the trial for the Indian population when we feel the time is right
  • While the Centre has expeditiously moved to exempt Medical Devices and Equipment manufacturing, warehousing and distribution from the lockdown, the implementation rests with State governments and local level administrators that has been clamping down on manufacturing, warehousing, distribution, of medical devices and equipment.


Focus: GS-III Disaster Management

Why in news?

  • German researchers plan to regularly test over 100,000 people to see if they have overcome infection with coronavirus (COVID-19) to track its spread, an institute behind the plan confirmed on 27th March 2020.
  • You could give immune people something similar to a vaccination certificate that could allow them exceptions from limits on their activities.

Issues with the move

  • But even if the study is approved, initial readings might not be completely reliable.
  • Tests currently available can show false positives for coronavirus antibodies, as 90% of adults already have immunity against common, harmless viruses from the same family.
High demand and issues with reagents have 
delayed testing in some countries. 
It takesa few hours to get results from the 
test, limiting haw rnany tests can be done. 
A swab is taken of the inside of a patient's nose or the back 
of their throat. This sample is then sent to a lab to test 
The RNA of the virus is extracted and purified. An enzyme, 
reverse transcriptase, converts the RNA to DNA. 
The DNA is mixed with primers, sections Of DNA designed 
to bind to characteristic parts Of the virus DNA. Repeatedly 
heating then cooling DNA with these primers and a DNA- 
building enzyme makes millions of copies of virus ONA. 
Fluorescent dye molecules bind to the virus DNA as it is 
copied. Binding makes them give off more light, which is 
used to confirm the presence of the virus in the sample, 
In some cases sample degradation or 
contamination can affect the results. 
The current tests are good for diagnosing an infection - but 
they can't tell us if someone has had it and then recovered. 
Tests that look for antibodies against the virus can do this. 
The fluorescence increases as more copies of the virus DNA 
are produced. If it crosses a certain threshold, the test is 
positive. If the virus isn't present, no ONA copies are made and 
the threshold isn't reached. Inthis case, the test is negative. 
Copying cycles 
Copying cycles 
Produced by the 
immune m. 
They remain in the 
blood some time 
after infection, 
Tests that look for proteins on the surface of the virus are also 
in development. These testsare faster, but Less accurate. 
@Andy Brunning/Compound Interest 2020 - I Twitter: @compoundchem I FB: 
This graphic is shared under a Creative Commons Attribution- NonCommercial-NoDerivatives 14_0 licence,

What are antibodies?

  • Antibodies, also known as immunoglobulins, are Y-shaped proteins that are produced by the immune system to help stop intruders from harming the body.
  • When an intruder enters the body, the immune system springs into action.
  • These invaders, which are called antigens, can be viruses, bacteria, or other chemicals.
  • When an antigen is found in the body, the immune system will create antibodies to mark the antigen for the body to destroy.

Function of Antibodies

  • The antibodies act sort of like the immune system’s scouts.
  • They find antigens, stick to them, and identify for the immune system the exact type of antigen so that it can be destroyed.
  • Each antibody is made for one and only one antigen, and it’s fitted with special receptors that will only bind to that antigen.
  • For instance, a specific antibody is created to help destroy the chickenpox virus. Only that particular antibody will attack a chickenpox virus.

How does antibody test work?

  •  Antibody tests look to see if someone has been exposed to a specific antigen, like a virus.
  • The British tests are designed to work in one of two ways. They either detect human antibodies in blood using an antigen designed to be similar to a feature of the virus. Or conversely, the test detects the virus in blood using a antibody designed to trap the virus.


Focus: GS-III Environment and Ecology

Why in news?

  • In a relief to automobile dealers, the Supreme Court on 27th March extended the March 31, 2020 deadline for the sale and registration of BS-IV emission norm-compliant vehicles because of the “extraordinary” situation arising out of the 21-day COVID-19 lockdown due to the COVID-19 pandemic.
  • The court said the first category of vehicles could be registered after the lockdown was withdrawn.
  • As for the unsold vehicles, dealers could sell 10% of the stock after the lockdown was lifted.
  • However, dealers in Delhi-NCR have been denied the relief owing to the high levels of the pollution in the national capital.
  • The FADA had filed the application for an extension of the deadline.

Federation of Automobile Dealers Associations (FADA)

  • The Federation of Automobile Dealers Associations (FADA) is an apex national body representing automobile dealers of India.
  • It was founded in 1964 by four regional Auto Trade associations to protect and promote the Indian retail automobile market.
  • It is now a registered body under the Companies Act 1956.

Bharat stage emission standards (BSES)

  • Bharat stage emission standards (BSES) are emission standards instituted by the Government of India to regulate the output of air pollutants from compression ignition engines and Spark-ignition engines equipment, including motor vehicles.
  • The standards and the timeline for implementation are set by the Central Pollution Control Board under the Ministry of Environment, Forest and Climate Change (MoEFCC).
  • The standards, based on European regulations were first introduced in 2000. Progressively stringent norms have been rolled out since then. All new vehicles manufactured after the implementation of the norms have to be compliant with the regulations.

More about BS norms

  • The abbreviation of ‘BS’ is Bharat Stage and is suffixed with the iteration of the actual emission norms.
  • The Indian emissions standards area unit supported the lines of European norms unremarkably called monetary unit a pair of, EURO 3, and so on.
  • The primary rules with the soubriquet Asian nation 2000 were introduced in 2000, with the second and third iteration introduced in 2001 and 2005 with the soubriquet BSII (BS2) and BSIII (BS3), severally.
  • Both BSIV and BSVI area unit emission norms that set the most permissible levels for pollutants emitting from a automotive or a two-wheeler exhaust.
  • Compared to the BS4, BS6 emission standards area unit stricter, whereas makers use this variation to update their vehicles with new options and safety standards, the largest or the numerous modification comes within the type of stricter permissible emission norms.


Focus: GS-III Indian Economy, Prelims

Why in news?

The COVID-19 pandemic has driven the global economy into a downturn that will require massive funding to help developing nations, IMF chief said on 27th March 2020.


  • Over 80 countries, mostly with low incomes, have already requested emergency aid from the International Monetary Fund.
  • $2.2 trillion economic package was approved by the U.S. Senate which is absolutely necessary to cushion the world’s largest economy against an abrupt drop in economic activities.

International Monetary Fund (IMF)

  • International Monetary Fund (IMF), United Nations (UN) specialized agency, founded at the Bretton Woods Conference in 1944 to secure international monetary cooperation, to stabilize currency exchange rates, and to expand international liquidity (access to hard currencies).

The IMF functions in three main areas:

  1. Overseeing the economies of member countries
  2. Lending to countries with balance of payments issues
  3. Helping member countries modernize their economies
  • The International Monetary Fund aims to reducing global poverty, encouraging international trade, and promoting financial stability and economic growth.
  • The IMF has three main functions: overseeing economic development, lending, and capacity development.
  • Through economic surveillance, the IMF monitors developments that affect member economies as well as the global economy as a whole.
  • The IMF lends to its member nations with balance of payment problems so they can strengthen their economies.
  • The group also provides assistance, policy advice, and training through its various technical assistance programs.


Focus: GS-III Indian Economy, Prelims

Why in news?

  • Moody’s Investors Service sharply cut India’s growth forecast for calendar 2020 to 2.5% from 5.3% estimated barely 10 days ago after the government ordered a nationwide lockdown to curb the spread of the coronavirus.
  • The ratings company estimates a 5% growth for calendar 2019.
  • Global Economy may Contract 0.5%.


  • A general lack of social safety nets, weak ability to provide adequate support to businesses and households, and inherent weaknesses in many major emerging market countries will amplify the effects of the coronavirus-induced shock
  • In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors.
  • The speed of the recovery will depend on to what extent job losses and loss of revenue to businesses is permanent or temporary.
  • There are significant unknowns, such as how long the virus will take to be fully contained and, by extension, how long economic activity will remain disrupted.
July 2024