Daily News Analysis 16 June 2023

Table of Contents


  1. Compromise settlement for wilful defaulters

Facts for Prelims

  1. TN govt withdraws general consent
  2. Gender Social Norms Index (GSNI) 2023
  3. Slow Remittance inflows growth

Compromise settlement for wilful defaulters


The Reserve Bank of India (RBI) has allowed wilful defaulters and fraud cases to settle their loan dues through compromise settlements. This decision has drawn criticism from bankers who believe it burdens ordinary citizens and undermines the banking system.

What is a compromise settlement?

  1. Borrower negotiates to pay less than the total amount due to settle the loan.
  2. Banks approve such settlements, resulting in significant losses for them.

RBI\’s decision:

  1. RBI permits compromise settlements and technical write-offs for wilful defaulters and fraud cases.
  2. Banks must wait 12 months before offering fresh loans to those who settled through compromise.

Detrimental step:

  1. The RBI\’s framework is seen as compromising the banking system\’s integrity.
  2. It rewards dishonest borrowers and discourages honest borrowers.
  3. Bank unions express concern about the impact on depositors and bank employees.

Policy reversal:

  1. The RBI previously barred wilful defaulters from compromise settlements.
  2. The sudden change erodes public trust and undermines depositor confidence.

Wilful defaulters:

  1. Those who default on loan repayments despite having the means to pay.
  2. As of December 2022, there were 15,778 wilful default accounts involving Rs 340,570 crore.
  3. Public sector banks account for 85% of wilful defaults.

Importance of loan recovery:

  1. Recovery aims to protect the interests of depositors and stakeholders.
  2. Failure to recover non-performing assets (NPAs) burdens depositors and stakeholders.
  3. High levels of NPAs contribute to high interest rates in India.


The RBI\’s decision to allow compromise settlements for wilful defaulters and fraud cases raises concerns about the integrity of the banking system. It places the burden on ordinary citizens and undermines trust. Loan recovery is crucial for the interests of depositors and stakeholders, and compromise settlements should prioritize maximum recovery in the shortest time possible.

TN govt withdraws general consent


The Tamil Nadu government has decided to cancel the permission they had given to the Central Bureau of Investigation (CBI) to investigate cases in the state without asking for their permission first.

About General Consent to the CBI:

Why is the consent of states needed?

  1. The CBI needs permission from state governments before investigating crimes in their states.
  2. The law called The Delhi Special Police Establishment (DSPE) Act of 1946 requires this consent.
  3. Section 6 of the DSPE Act states that the CBI cannot exercise its powers in a state without the state government\’s consent.

What is the general consent for CBI?

  1. General consent is a type of permission given by a state government to the CBI.
  2. It allows the CBI to operate smoothly within a state without seeking fresh permission for each case.
  3. With general consent, the CBI can investigate cases and enter the state without prior permission.

Withdrawal of general consent:

  1. If a state government withdraws the general consent, the CBI can\’t register new cases involving central government officials or private individuals without the state government\’s permission.
  2. However, the CBI can continue to investigate cases that were registered before the withdrawal of general consent.
  3. Without general consent, the CBI needs to apply for permission on a case-by-case basis before taking action in that state.
  4. If specific consent is not granted, CBI officials won\’t have the power of police personnel when they enter that state.

Introduction to CBI:

  1. The Central Bureau of Investigation (CBI) is an investigative agency in India.
  2. It is responsible for investigating crimes related to corruption, economic offenses, and other high-profile cases.

Role and Jurisdiction of CBI:

  1. The CBI operates under the provisions of the Delhi Special Police Establishment (DSPE) Act, 1946.
  2. It has jurisdiction to investigate cases across India, but there are certain limitations based on the consent of state governments.

Consent of States for CBI Investigation:

  1. The DSPE Act requires the CBI to obtain the consent of state governments before it can investigate a crime within a particular state.
  2. This consent is necessary as per Section 6 of the DSPE Act, which restricts CBI\’s powers in a state without the state government\’s permission.
  3. Unlike the National Investigation Agency (NIA), which has jurisdiction across the country without consent, the CBI needs specific consent from each state.

Types of Consent:

  1. Consent can be given by a state government to the CBI in two forms: case-specific or general.
  2. Case-specific consent means permission for the CBI to investigate a particular case.

General consent, on the other hand, allows the CBI to operate smoothly within a state without seeking fresh permission for each case.

Gender Social Norms Index (GSNI) 2023


Recently, the United Nations Development Programme (UNDP) released the Gender Social Norms Index (GSNI) 2023.

About Gender Social Norms Index (GSNI) 2023:

Introduction to GSNI:

  1. The Gender Social Norms Index (GSNI) is a measure that quantifies biases against women and reflects people\’s attitudes towards women\’s roles.
  2. It focuses on four dimensions: political, educational, economic, and physical integrity.

Key Findings of GSNI 2023:

Widespread Biases:

  1. The index, which covers 85% of the global population, reveals that nearly 9 out of 10 men and women hold fundamental biases against women.
  2. Despite progress, close to 90% of people still hold at least one bias against women.

Attitudes Towards Violence:

  1. Shockingly, 25% of people believe it is justified for a man to beat his wife, highlighting persistent harmful attitudes.

Impact on Political Representation:

  1. Countries with greater bias in gender social norms tend to have lower representation of women in parliament.
  2. Indigenous women, migrant women, and women with disabilities face even greater challenges in achieving political representation due to overlapping biases.

Education and Economic Outcomes:

  1. Despite increased educational achievements for women, this progress has not translated into better economic outcomes and opportunities.

Women continue to face barriers and limited opportunities for economic empowerment.

Slow Remittance inflows growth


The World Bank\’s latest Migration and Development Brief predicts a significant slowdown in remittances to India. In 2022, remittances grew by over 24% to reach a record $111 billion. However, this growth is expected to slow down due to slower economic growth in OECD and GCC countries and the high base effect.

Reasons for Slower Growth:

  1. Slower growth in high-tech sectors in OECD countries, particularly the United States, may affect the demand for IT workers and divert remittances to informal money transfer channels.
  2. Declining oil prices in Gulf Cooperation Council (GCC) countries, which have dented growth, also contribute to the slowdown in remittances.

Projected Growth for India:

  1. India witnessed significant growth in remittances, reaching a record-high of $111 billion in 2022, but is expected to post a growth of just 0.2% in 2023.

Impact on South Asian Inflows:

  1. Remittance flows to other South Asian countries will also be limited by the demand for migrants in GCC countries, where declining oil prices are expected to slow down growth.

Top Sources of Remittances:

  1. Approximately 36% of India\’s remittances come from high-skilled Indian migrants in the US, UK, and Singapore.
  2. Favourable economic conditions, including wage hikes and higher energy prices, contribute to increased remittances.

Trends in Other Regions:

  1. Remittance flows to low- and middle-income countries are expected to moderate to 1.4% in 2023, resulting in total inflows of $656 billion.
  2. Remittance growth is projected to be the lowest in South Asia (0.3%) and highest in Latin America and the Caribbean (3.3%).

Significance of Remittances:

  1. Remittances are viewed as critical financial inflows and a source of foreign exchange for countries, especially in the aftermath of the Covid-19 pandemic.
  2. Remittances have become a financial lifeline for many economies and are considered complementary to government cash transfers.

Importance of Remittances in South Asia:

  1. Remittances accounted for a significant share of GDP in some South Asian countries, such as Nepal (23.1%) and Pakistan (7.9%).

Remittance inflows are essential for funding current account and fiscal shortfalls in countries like Tajikistan, Tonga, Lebanon, Samoa, and the Kyrgyz Republic.

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