QUIZ – 2017: Insights Current Affairs Quiz, 23 February 2018

Solution: a.

“Meanwhile, the RBI broke its silence on the fraud and blamed internal control failures for PNB’s woes in a statement terming the incident as a ‘case of operational risk’ due to ‘delinquent behaviour’ by one or more employees.”

• Generally, operational risk is defined as any risk, which is not categorised as market or credit risk, or the risk of loss arising from various types of human or technical error. The most important type of operational risk involves breakdowns in internal controls and corporate governance (as is being recognised in the PNB scam). Such breakdowns can lead to financial loss through error, fraud, or failure to perform in a timely manner or cause the interest of the bank to be compromised.

• Credit risk or default risk involves inability or unwillingness of a customer or counter-party to meet commitments in relation to lending, trading, hedging, settlement and other financial transactions.
• Traditionally, credit risk management was the primary challenge for banks. With progressive deregulation, market risk arising from adverse changes in market variables, such as interest rate, foreign exchange rate, equity price and commodity price has become relatively more important.
• Forex risk is the risk that a bank may suffer losses as a result of adverse exchange rate movements.

https://m.rbi.org.in//scripts/NotificationUser.aspx?Id=85&Mode=0

http://www.thehindu.com/news/national/how-did-system-allow-pnb-fraud-asks-cvc/article22778169.ece;

Solution: b.

• A JPC is an ad-hoc body. It is set up for a specific object and duration. JPCs are set up by a motion passed in one house of Parliament and agreed to by the other. The details regarding membership and subjects are also decided by Parliament.
• For example, the motion to constitute a JPC on the stock market scam (2001) was moved by the government in the Lok Sabha. The motion constituted a JPC of 30 members of which 20 were from the Lok Sabha and 10 were from the Rajya Sabha.
• The mandate of a JPC depends on the motion constituting it. This need not be limited to the scrutiny of government finances.
• JPC recommendations have persuasive value but the committee cannot force the government to take any action on the basis of its report. The government may decide to launch fresh investigations on the basis of a JPC report. However, the discretion to do so rests entirely with the government. The government is required to report on the follow-up action taken on the basis of the recommendations of the JPC and other committees.

http://www.prsindia.org/theprsblog/?tag=joint-parliamentary-committee;

Improvisation: http://www.thehindu.com/todays-paper/tp-national/opposition-divided-on-jpc-probe-demand/article22820385.ece;

Solution: d.

http://www.thehindu.com/opinion/editorial/fire-and-fury/article22818648.ece;

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Solution: b.

PM Sheikh Hasina  reiterated that all countries having territorial boundaries with Myanmar should play a role in finding a solution to the Rohingya crisis. “India, China, Bangladesh, Laos, and Thailand have land borders with Myanmar but only Bangladesh gave them refuge. So all sides should be consulted in finding a solution,” she said.

http://www.thehindu.com/todays-paper/tp-international/ask-myanmar-to-take-back-rohingya-hasina/article22811117.ece;

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Solution: a.

• In arriving at its decision, the Supreme Court followed the “principle of equitable apportionment” recognised by international rules on water sharing like “the Helsinki rules, Campione rules and Berlin rules”.
• This principle of equitable apportionment, as is now intrinsically embedded generally in a pursuit for apportionment of water of an international drainage basin straddling over two or more States, predicates that every riparian State is entitled to a fair share of the water according to its need, and is imbued with the philosophy that a river has been provided by nature for the common benefit of the community as a whole through whose territory it flows even though those territories may be divided by frontiers as postulated in law.
• The Helsinki Rules of 1966 for instance recognise equitable use of water by each basin State taking into consideration the geography and hydrology of the basin, the climate, past utilisation of waters, economic and social needs, dependent population and availability of resources.

http://indianexpress.com/article/india/sc-raises-karnatakas-cauvery-share-lets-tamil-nadu-use-groundwater-5067164/;

http://www.thehindu.com/news/national/cauvery-a-national-asset-no-exclusive-ownership/article22778384.ece;

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