CAO Daily Editorial analysis for UPSC IAS 13th-December, 2017

Current Affairs Only Daily Editorial Analysis for Competitive Exams


13th Dec, 2017

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Perils of going cashless {Digitalization}

(The Hindu)


Context

Financial Resolution and Deposit Insurance Bill (FRDI) has led to worries about the safety of bank deposits.

Why?

The Bill enables the government to seize the deposits of ordinary citizens in order to save troubled public sector banks.

“bail-in” attack on deposits

  • Bail-ins and bail-outs arise out of necessity rather than choice. Investors and deposit-holders in a troubled financial institution would surely prefer to keep it solvent, rather than the alternative which would be for them to lose the full value of their investments or deposits if the bank goes under.
  • Depositors can promptly withdraw their money from the bank by demanding cash.
  • Such an event can lead to severe bank runs and destabilise the banking system because bank deposits are only fractionally backed by actual cash.

How can cashless option sort out the issue?

  • When all, or even a predominant share, of money in the world is digital, there is no question of banks having to meet depositors’ demand for cash.
  • So a cashless world will, once and for all, free banks from the obligation to meet cash demands from depositors, thus protecting them from any liquidity crisis.
  • More importantly, it would also strip depositors of the power to withdraw their deposits in the form of cash to escape any tax or other forms of confiscation by the government.

 Other reason why banks wants to go cashless

  • Banks have been a major source of funding for governments and their economies across the world.
  • Most of such lending happens through loans which are not backed by savings but instead through fresh money creation, which in turn leads to economic crises and bank runs led by depositors.
  • A cashless world, on the other hand, makes it easier for banks to carry out their business of credit creation without the risk of having to satisfy the demand for cash from depositors.
  • Consequently, it prevents recurrent crises of liquidity that are faced by banks.

A Shared Cultural Map {International Relation}

(Indian Express)


Context

This article talks about politics and security links of Balochistan and India

In news

Gwadar and Chabahar have the potential to become part of Indian soft-power diplomacy.

The cultural ecology of Gwadar and Chabahar, defined by the idea of “Baloch”, make them suitable for such a project. Related image

Baloch Culture

  • It a semi-nomadic and pastoral community, carry the collective memory of West, Central and South Asia along with the recollections of their connections to the Greeks, as part of their cultural heritage.
  • While they are Muslims, the strains of other beliefs such as Hinduism, Zoroastrianism and Sufism influence various aspects of the Balochi cultural heritage.
  • Their language, bardic traditions and traditional knowledge skills comprising linguistics, crafts, performing arts, rituals, and pastoral and agricultural traditions recall a cultural map of different parts of Asia.
  • The Hinglaj temple is located in the Hingol National Park in Balochistan’s Lasbela District on Pakistan’s Makran coast. It has one of the 51 shaktipeeths, or major shrines associated with the cult of the Mother Goddess.

The temple, like that in Vaishno Devi in Jammu, is in a cave among rugged mountains.

The pilgrims to this shrine include not only Hindus but also the Zikri Baloch who call the pilgrimage Nani ki Haj. In spite of the political challenges in the area, the Baloch Muslims continue to protect the Hinglaj temple and ensure the success of the annual fair — a part of their vibrant cultural heritage.

Importance of Hinglaj in India

In India, Hinglaj Devi plays an important role in the cultural geography of large number of traders, pastoral and agricultural communities like Khatris, Charans and Rabaris. While the shrine is important for the Shaktas, it has a special significance for the Kan Phata Gorak Nath Yogi (torn-ear ascetics) cult.

India’s economical association with  Balochistan

  • Its shared cultural heritage with communities in India makes it amenable to soft power diplomacy.
  •  Besides being a part of road and ocean routes, Balochistan can also be a part of a skill corridor.
  • The creation of such a corridor — facilitated by shared cultural ecology and traditional knowledge systems — could lead sustainable skill programmes that draw on people-to-people contact at the grass roots level.

 

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