RBI's pilot project for facilitating frictionless credit

GS Paper - 3 (Economy)

In a move aimed at easing access to credit, the Reserve Bank of India (RBI) launched a pilot project in the form of a "Public Tech Platform for Frictionless Credit" . The move seeks to give digital information to lenders to expedite access to credit or loans.

What is the 'Public Tech Platform for Frictionless Credit'?

• It is an end-to-end digital platform that will have an open architecture, open Application Programming Interfaces (APIs), and standards to which all banks can connect in a "plug and play" model.
• The Reserve Bank Innovation Hub, a wholly-owned subsidiary of the central bank, has developed the platform.

What is frictionless credit?

• Frictionless credit is a borrowing approach that seeks to streamline the lending process for consumers.
• Unlike the traditional credit systems, where individuals need to go through extensive paperwork, credit checks and lengthy approval procedures, frictionless credit promises a smoother and faster experience.
• RBI's project is designed to smoothen Kisan Credit Card lending by automating various processes within the banks and integrating their systems with service providers.

How will the public tech platform help disburse loans?

• Before a credit or loan is approved, it often takes lenders several days, a week or even months to process several sets of information.
• Currently, data has to be sourced from credit information bureaus, account aggregators, and banks, which has led to obstacles in the timely delivery of lending.
• The public tech platform seeks to make this process seamless by providing all the required information in one place to facilitate credit.

Linkages with other services

• The public tech platform will facilitate linkages with services such as Aadhaar e-KYC, PAN validation, Aadhaar e-signing, account aggregation and house/property search data, among other things.
• On 17 August 2023, Axis Bank said that it would offer Kisan Credit Card (KCC) and unsecured MSME loans to small business customers on the public tech platform.
• As a pilot, Kisan Credit Cards will be offered in Madhya Pradesh and will be available to customers for up to Rs 1.6 lakh to begin with.
• MSME loans will be available across the country and loans up to Rs 10 lakh will be offered to customers.

Extreme heat mean for the Mediterranean Sea

GS Paper - 3 (Environment)

Frequent heat waves cause huge damage to underwater ecosystems and researchers expect more of them in the future.

What are the solutions to heat stress?

• Extreme heat has plagued the Mediterranean for weeks. Wildfires raged across at least nine countries in the region from Algeria to Greece.
• But the soaring temperatures are not only a danger for people and ecosystems on land; they’re also harming marine life.
• Without a doubt global climate change is the main reason for the heat waves in the sea. It’s causing the ocean to warm.

Why are high sea temperatures a problem?

• In a warming world, marine creatures are in danger of suffocating. Gases like oxygen and carbon dioxide dissolve better at colder temperatures, so that means the warmer the water; the less oxygen is available to breathe.
• Conversely, higher temperatures also cause an increase in metabolism, which in turn means animals have to breathe even more than usual). That combination also heightens the risk of death by starvation for marine life.
• The rise in temperature accelerates metabolism, and the organisms need more food to maintain this metabolic rate.
• Algal blooms are more common in hotter waters too. Such blooms can further deplete oxygen levels and produce toxins harmful for fish, marine mammals and birds, for instance.

What species and ecosystems are worst hit by marine heat waves?

• High water temperatures are most harmful for animals living at the bottom of oceans, lakes or rivers.
• These benthic species include corals, mussels, sponges, starfish and plants like sea grasses, and are often attached to rock or solid ground. They can’t migrate when it gets too hot.
• Scientists observed mass deaths of benthic species along thousands of kilometers of Mediterranean coastline between 2015 and 2019.
• Many benthic species are crucial to the marine ecosystem. They filter the water and keep seas, rivers and lakes clean by eating dead organisms.
• Some species are an important food source for other creatures or are harvested by humans. Benthics like soft corals, seaweed and seagrasses provide some of the main ocean habitats.
• Heat is particularly harmful for Posidonia oceanica or Neptune grass. And the large, slow-growing seagrass is found only in the Mediterranean. Previous heat waves have decimated the species, which is bad news for the climate.

What does extreme heat in the Mediterranean mean for people?

• Warming seas are already affecting fishing activities in the area. Fishermen are catching fewer familiar species and instead are finding more invasive fish which they have difficulty selling.
• Rabbitfish and lionfish are edible, but other invasive fish aren’t. Some are even poisonous, like the puffer fish.
• Habitat loss could also lead to an overall decline in fish populations, while disappearing seagrass means coasts will be more exposed to future storms.
• This could also have a knock-on effect for tourism because divers will be less likely to visit an impoverished underwater landscape.

Violation of privacy in caste survey

GS Paper - 2 (Polity)

The Supreme Court asked the petitioners challenging the Bihar caste survey what was the violation of privacy in asking people to disclose their caste after the latter contended that the exercise was clearly in violation of the top court’s nine-judge decision in the privacy case wherein it was held that the state cannot encroach on the privacy of individuals without a law to back it.

What

• If somebody is asked to give caste or sub-caste, in a state like Bihar, caste is known to neighbours… Which of these 17 questions (asked as part of the survey) invades privacy, asked Justice Sanjeev Khanna, presiding over a two-judge Bench, and said the exercise was carried out on the strength of an executive order.
• The Bench commenced hearing a batch of pleas challenging the 1 August decision of the Patna High Court, which gave the go-ahead to the caste survey.
• Some of these petitions have claimed the exercise was an infringement of the people’s right to privacy.
• The SC, he pointed out, had said that “while it intervenes to protect legitimate state interests, the state must nevertheless put into place a robust regime that ensures the fulfillment of a threefold requirement.
• These three requirements apply to all restraints on privacy (not just informational privacy). They emanate from the procedural and content based mandate of Article 21.
• The first requirement that there must be a law in existence to justify an encroachment on privacy is an express requirement of Article 21.
• For, no person can be deprived of his life or personal liberty except in accordance with the procedure established by law. The existence of law is an essential requirement.
• The caste survey, however, was carried out on the basis of an executive order, which does not even set out the aim of the exercise.
• Puttaswamy judgment says privacy can be intruded upon only by a just fair and reasonable law, with a legitimate aim, which has to stand the test of proportionality.