The sharp slump in crude oil prices offers a silver lining to the Indian economy otherwise battered by a spate of negative factors as it helps ease pressure on the current account deficit and enables the government to improve its fiscal health if it is able to raise duties.

  • In the biggest slump since the 1991 Gulf War, crude oil prices fell as much as 33 per cent between Friday and Monday and hit a level of $33 per barrel — as Saudi Arabia and Russia signalled they would hike output despite sliding demand globally.
  • Saudi Arabia has cut its official selling prices for April for all crude grades to all destinations by between $6 and $8 a barrel, reigniting a price war among major oil-producing nations.
  • Saudi Arabia’s decision came after the collapse of the OPEC supply cut agreement with Russia last week which ended more than three years of co-operation to support the market.
  • Amid all the domestic concern around decline in GDP growth and the impact of coronavirus on global economic activity, the fall in the prices of crude augurs well for the economy as India imports more than 80% of its oil requirements.
  • According to a report by Care Ratings, in the current financial year India has imported 4.5 million barrels per day (April-January) of crude oil and the import dependency based on consumption has increased to 85 per cent as compared with it being 83.5 per cent a year ago in the same period.
  • While a decline in crude oil prices also brings inflation to lower levels, the report said, “With imports of 1651 million (4.5*366) barrels of crude oil in FY20 (till January) a dollar decrease in prices on a permanent basis would decrease the bill by roughly $1.6 billion per annum.
  • Crude oil import bill during FY19 was around $112 billion and in the current fiscal is $87.7 billion (until January). Thus the fall in crude oil prices will further aid in softening the deficit and moderating inflation.


Following a sharp decline in crude oil prices and decrease in trade from China and other countries in the wake of fear of spread of coronavirus, India’s foreign exchange reserves jumped $5.4 billion in the week ended February 28 to hit a new all-time high of $481.5 billion. The country’s forex reserves have grown by $53 billion since September 20 when the government cut corporate tax rate to attract domestic and foreign investment.


Worst single-day fall for Sensex

The benchmark index loses a whopping 1,941.67 points to close at 35,634.95

  • The Sensex lost a whopping 1,941.67 points, or 5.17%, to close at 35,634.95 : a 52-week low for the barometer : with all its 30 constituents ending the day with huge losses. 
  • The Sensex has now lost 6,639 points, or nearly 16%, from its record intra-day high of 42,273.87 that was touched on January 20. 
  • The broader Nifty plunged 538 points, or 4.90%, to close at 10,451.45.
  • The India VIX index jumped nearly 35% during intra-day trading to touch a new 52-week high of 34.4, before closing at 30.8 — 20.11% higher than Friday’s close.


 Bengaluru City gets all-women post office

  • The Department of Posts, on the occasion of International Women’s Day, launched an all-women post office.
  • Only women staff will look after the post office and attend to postal related works. The post office is located in Rajajinagar Industrial Estate.
  • According to a release, the post office was inaugurated by playback singer Latha Hamsalekha and G. Rama Prasad, AGM, Karnataka State Small Industries Development Corporation Limited, Bengaluru.


Marine protected area off the coast of Karwar

Coast has 34 species under the red list

  • The Mugali Marine Protected Area will come up off the coast of Karwar and is 6 km from the beach in the Indian waters. 
  • This area harbours spinner dolphins, bottled-nose dolphins, Bryde’s whales, spot-tail sharks, whitetip sharks and whitecheek sharks. 
  • The Mugali Marine Protected  area has 34 of the marine wildlife species categorised under the red list of the International Union for Conservation of Nature.

Sanctuary boundary

  • The wildlife board agreed to rationalise and redefine the boundary of Shettihalli Wildlife Sanctuary in Shivamogga. 
  • Mugali Marine Protected Area was officially notified on November 23, 1974.


Kyasanur Forest Disease (KFD)

  • The disease is caused by a virus belonging to the family Flaviviridae, which also includes yellow fever and dengue fever, which are transmitted by monkeys. 
  • The disease was first reported from Kyasanur Forest of Karnataka in India in March 1957.
  • The disease first manifested as an epizootic outbreak among monkeys, killing several of them in the year 1957. 
  • Hence the disease is also locally known as "monkey disease" or "monkey fever".

Signs and symptoms

  • The symptoms of the disease include a high fever with frontal headaches, followed by hemorrhagic symptoms, such as bleeding from the nasal cavity, throat, and gums, as well as gastrointestinal bleeding. 
  • Other symptoms include vomiting, muscle stiffness, tremors, absent reflexes, and mental disturbances.
  • An affected person may recover in two weeks' time, but the convalescent period is typically very long, lasting for several months.
  •  Muscle aches and weakness also occur during this period and the affected person is unable to engage in physical activities.

Prevention and treatment

  • Prevention is by vaccination, as well as preventive measures such as protective clothing, tick control, and mosquito control. 
  • The vaccine for KFDV consists of formalin-inactivated KFDV. 
  • The vaccine has a 62.4% effectiveness rate for individuals who receive two doses.


Telangana eyeing bamboo cultivation

  • The Telangana State Planning Board, along with a team of State government officials and those having expertise on bamboo visited Kudal area in Sidhudurg district of Maharashtra for two days for studying bamboo cultivation and bamboo-based industries.
  • Noting that there were good opportunities for bamboo cultivation in Telangana since the plant has several uses in housing and craft, by encouraging farmers to go for bamboo farming their incomes could be improved.
  • Bamboo could be cut for commercial purposes every year from the fourth year of planting and it would withstand adverse weather conditions too.


IAF plane to bring Indians from Iran

  • The C-17 Globemaster aircraft has a specialist medical team on board
  • India sent an IAF transport aircraft with a specialist medical team to Iran on Monday night to bring back Indians stranded in the coronavirus-hit nation.
  • According to the Indian Air Force, its C-17 Globemaster military aircraft left for Iran from the Hindon airbase.
  • About 2,000 Indians are living in Iran, a country that has witnessed increasing numbers of COVID-19 cases.
  • According to latest reports, 237 people have died of the virus infection in Iran while the number of positive cases stands at around 7,000.
  • On February 27, 76 Indians and 36 foreign nationals were brought back from the Chinese city of Wuhan by the aircraft of the Indian Air Force.
  • The aircraft had also taken a consignment of medical supplies to China to help it deal with the crisis.
  • The C-17 Globemaster is the largest military aircraft in the Indian Air Force’s inventory.
  • The plane can carry large combat equipment, troops and humanitarian aid across long distances in all weather conditions.
  • According to reports, the number of cases of novel coronavirus worldwide has crossed 1,10,000 in 100 countries and territories with more than 3,800 dead.


Madras HC dismisses M.P.’s plea on GI tag for basmati rice

Madhya Pradesh has challenged the exclusion of 13 districts from a map submitted by APEDA

  • The State of Madhya Pradesh and the Madhya Shetra Basmati Growers Association have lost two separate cases filed by them in the Madras High Court in 2016 challenging the exclusion of 13 districts in the State from a map submitted by the Agricultural and Processed Food Products Export Development Authority (APEDA) seeking Geographical Indication tag for basmati rice grown in the Indo Gangetic Plain.
  • Justices dismissed both writ petitions on the primary ground of maintainability after stating that the Geographical Indications Registry (GIR) had already issued GI tag certificates to APEDA by accepting its claim that basmati rice was grown only in the States of Punjab, Haryana, Himachal Pradesh, Delhi and Uttarakhand apart from 26 districts in Uttar Pradesh besides Jammu as well as Kathua.


The cost of a yes to a bank rescue act

  • The Yes Bank plan is risky and there is little doubt that the State Bank of India is acting at the government’s bidding.
  • The revival package announced by the Reserve Bank of India (RBI) to rescue insolvent Yes Bank smacks of desperation.


The SBI ‘lifeline’

  • SBI the anchor investor in Yes Bank equity, paying a premium of at least ₹8 on a share with face value of ₹2, and purchasing as many shares as needed to acquire a 49% stake. 
  • Simultaneously, the authorised capital of Yes Bank is to be raised from ₹800 crore to ₹5,000 crore. 
  • SBI would be investing ₹2,450 crore to become the dominant stakeholder.


Possible economic reaction

  • Firms and agents dependent on Yes Bank for credit to keep them in business may find their operations disrupted and new credit lines difficult to find,which may lead to their defaulting on debt they owe other creditors.
  • There would be adverse spin-off effects on investors in bonds and instruments issued by Yes Bank, triggering turmoil in other parts of the financial system.

The main planks

  • The RBI’s restructuring plan seems to be based on three principles. 
  • The first, the government is not expected to directly invest in Yes Bank, perhaps because that would overburden its already strained finances, weakened further by a spate of recent tax concessions. 
  • The second, Yes Bank is not to be merged with the SBI, but become a standalone subsidiary, equity in which could be sold on a later date if that proves feasible and the SBI so desires.
  • Third, investors other than the SBI must play an important role in the revival of Yes Bank, since the equity of the bank is expected to rise from ₹800 crore to anywhere between ₹5,000 crore and ₹20,000 crore, with the SBI holding only 49% of the total.

 How Yes Bank ran into crisis


How did Yes Bank go from being one of the buzziest banks to among the most stressed? To which sectors was it lending? Why have the RBI’s decisions triggered concern among depositors and bond owners?

  • On March 5, the Reserve Bank of India announced that it was superseding the Yes Bank Board of Directors for a period of 30 days “owing to serious deterioration in the financial position of the Bank”.
  • But what created panic among the general public, and in particular the deposit holders in Yes Bank, was the RBI’s decision to cap withdrawals at Rs 50,000. The RBI said it had “no alternative but to” place the Bank under moratorium “in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors…”


What caused Yes bank's problems?

  • Between 2004, when it was launched, and 2015, Yes Bank was one of the buzziest banks.
  • In 2015, UBS, a global financial services company, raised the first red flag about its asset quality.
  • The UBS report stated that Yes Bank had loaned more than its net worth to companies that were unlikely to pay back. However, Yes Bank continued to extend loans to several big firms and became the fifth-largest private sector lender.





  • But, the type of firms and sectors to which Yes Bank was lending resulted in the start of the crisis.
  • According to one estimate, as much as 25% of all Yes Bank loans were extended to Non-Banking Financial Companies, real estate firms, and the construction sector. These were the three sectors of the Indian economy that have struggled the most over the past few years.
  • As Charts 2 and 3 show, Yes Bank was overexposed to these toxic assets. It was only a matter of time that non-performing assets (NPAs) started rising in Yes Bank.
  • Still, as Chart 4 shows, Yes Bank’s NPAs were not as alarmingly high as some of the other banks in the country. But what made it more susceptible to bankruptcy was its inability to honestly recognise its NPAs — on three different occasions, the last being in November 2019, the RBI pulled it up for under-reporting NPAs — and adequately provide for such bad loans.
  • Chart 5 shows how Yes Bank fared poorly on provision coverage ratio, which essentially maps the ability of a bank to deal with NPAs.
  • While debtors failing to pay back was the central problem, what further compounded Yes Bank’s financial problems was the reaction of its depositors.
  • As Yes Bank faltered on NPAs, its share price went down and public confidence in it fell. This reflected not only in depositors shying away from opening fresh accounts but also in massive withdrawals by existing depositors, who pulled out over Rs 18,000 crore between April and September last year.
  • It is estimated that up to 20% more withdrawals could have happened between October and February.


Will Yes Bank’s fall affect other private sector banks?


  • The banking system runs on trust. The Yes Bank episode could likely push depositors away from private sector banks.


What is RBI’s solution to Yes Bank’s revival; why has it triggered a controversy?

  • On March 6, the RBI released its “draft” revival plan for Yes Bank. Accordingly, State Bank of India could pick up 49% stake, and hold on to at least 26% for the next three years.
  • While this issue is still to be settled, another decision by the RBI created consternation among investors of Yes Bank.
  • The RBI stated that the so-called Additional Tier 1 (or AT1) capital that was raised by Yes Bank would be completely written off. In other words, those who lent money to Yes Bank under the AT1 category of bonds would lose all their money.
  • As much as Rs 10,800 crore fall under this category, and many popular mutual funds like Franklin Templeton, UTI Mutual Fund, SBI Pension Fund Trust, etc. stand to lose out. Indirectly, a lot of common investors too will lose out on their investments.


Yes Bank crisis: What is AT1 capital?

  • In a bank, there are different tiers (hierarchies) of capital (money).
  • The top tier or T1 has the “equity” capital — that is, money put in by the owners and shareholders. It is the riskiest category of capital.
  • Then there are different types of bonds (such as AT1 and AT2), which a bank floats to raise money from the market.
  • Last is the depositor — the one who parks her money in the bank’s savings account.
  • The depositor’s money is the safest type of capital. When something goes wrong, the depositor is paid back first and the equity owner the last. When the going is good, the depositor earns the lowest reward (rate of return) while the equity owners earn the most profits.
  • What has created a problem is that RBI has said that capital raised via AT1 bonds, which is in the same tier of capital as equity (i.e., Tier 1), will be written off even though equity will not be.
  • Bond owners, that is the mutual funds who loaned the money to Yes Bank, argue that they are being unfairly written off. They argue that equity capital should be written off before AT1. But the RBI has thrown the rule book at them. In all likelihood, this matter will be only be decided in court.

Which strain of coronavirus has come to India? 

  • A study from China has claimed that the novel coronavirus has two strains — ‘L’ and ‘S’. The research looked at 103 coronavirus specimens and identified 149 mutations. The researchers inferred that of the two subtypes, 70% of were of type L; the remaining were of type S.
  • However, the World Health Organisation (WHO) is yet to confirm this finding.
  • The Report of the WHO-China Joint Mission on Coronavirus Disease 2019 (COVID-19) says: “Whole genome sequencing analysis of 104 strains of the COVID-19 virus isolated from patients in different localities with symptom onset between the end of December 2019 and mid-February 2020 showed 99.9% homology, without significant mutation.”
  • Scientists at the National Institute of Virology (NIV) in Pune are still working to determine which strain of the virus has come to India.

What treatment is given to the patients of COVID-19?

The mortality of the virus is a little over 3%, and for most patients the body’s own immune system succeeds in fighting the virus.

  • There is no specific treatment.
  • Patients are mostly given medicines for symptomatic relief — for example, paracetamol to bring down fever, sometimes medicines for relief from pain.
  • Care is also taken to ensure they stay hydrated.
  • This is what happened with the first three cases in India — students from Kerala, who had come back from Wuhan.
  • They showed steady improvement with symptomatic treatment, and eventually recovered and went home.
  • ICMR has obtained permission for “restricted use in public health emergency” of two second-line HIV medications to fight the novel coronavirus.
  • Top Health Ministry officials said the combination of lopinavir and ritonavir has been approved for emergency medical use. Guidelines have been framed for the use of these drugs. Officials said the drugs are to be used only for the “vulnerable”, as they are not without side effects.



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