13 September 2017-Current Affairs

  1. The Financial Resolution and Deposit Insurance Bill 2017( FRDI Bill)
  2.  Sidi Saiyyed mosque , Ahmedabad
  3. . Home Ministry clears granting citizenship to Chakma-Hajong refugees

  1. The Financial Resolution and Deposit Insurance Bill 2017( FRDI Bill)
  • Bank run
    • A bank run is a scenario where a large number of depositors, driven by a severe lack of confidence in the financial system, rush to withdraw their deposits.
    • As banks typically keep only a small percentage of their deposits at hand, a run on deposits or withdrawals can have catastrophic consequences often, actually leading to a crisis. In 1929, after a major fall in stock prices, there were a series of bank runs in the US which gradually precipitated into the Great Depression.
  • The crash of 2007-08
    • The crash of 2007-08: The norm of government bail-outs, especially of “too big to fail” organizations, had led to a culture of moral hazard where financial institutions had indulged in a series of risky and speculative practices without due regard to the interests of the stakeholders
    • Because of the increasingly interconnected nature of the modern financial system, a failure in any one sector tends to have a domino effect, which can potentially rattle the entire economy.
  • The Financial Resolution and Deposit Insurance Bill 2017 (FRDI Bill)
    • As an aftermath of the events of 2007-08, an increasing number of jurisdictions are moving towards specialized resolution frameworks for financial institutions which are characterized by heightened scrutiny and dis-incentivization of excessive risk-taking
    • The Financial Resolution and Deposit Insurance Bill 2017 (FRDI Bill), which was recently introduced in Parliament
    • Resolution Corporation (RC).
      • The FRDI Bill provides for the setting up of an independent new regulator, the Resolution Corporation (RC). The RC will consist of representatives from all financial sector regulators (the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India and the Pension Fund Regulatory and Development Authority), the ministry of finance as well as independent members.
      • The RC has been tasked with handling situations of distress in financial institutions. In order to prevent regulatory arbitrage, the FRDI Bill provides for a clear delineation of roles between the RC and the regulators.
      • The health of a financial institution will be graded on a five-point “risk to viability” scale, ranging from “low risk to viability” to “critical risk to viability”. The RC’s role in case of a healthy financial institution will be extremely limited, and confined to exchange of supervisory information. For a financial institution which is on the brink of failure, the regulators will work in tandem with the RC in attempting its revival. However, once an institution has failed, the RC will take over and oversee its orderly demise
    • Resolution tools
      • The RC has been armed with various “resolution tools”, which are a mix of traditional methods such as mergers, acquisitions and portfolio transfers and some completely novel ones like bail-in, (setting up of) bridge service providers and run-off.
      • The tool of bail-in utilizes the existing resources of the failing institution by converting debt into equity. However, this tool is not absolute. For instance, only pre-defined liabilities can be bailed in and certain liabilities like those towards depositors and employees cannot be subject to a bail-in.
      • Bridge service provider is essentially a temporary institution which is set up to take over the operations and critical functions of a financial institution, for a period of one year at the most.
      • Run-off is a specialized tool for insurance companies, which allows the present policies (e.g. life insurance policies) to run their course while discontinuing the writing of new business.
      • In choosing and applying these tools, the RC will be bound by a number of guiding principles and safeguards. A definite time-limit on the process of resolution (one year, extendable by one more year subject to certain conditions) is one of the most notable aspects of the FRDI Bill.



  1. Sidi Saiyyed mosque , Ahmedabad

Why in News?  : Recently visited by Shinzo abe, Japanese PM

  • Built in 1573 by an Abyssinian, Sidi Saiyyed under the regime of the last Sultanate of Gujarat
  • Soon after its completion, Ahmedabad was taken over by Akbar’s army and brought under Mughal regime. Under the British it served the purpose of a government office.
  • Built in an Indo-Islamic style of architecture with minarets on the sides and arched windows
  • It has gained a reputation over the years for its architectural finesse, particularly the ornate lattice work or jali(Hence often referred to as the Sidi Saiyyed Ni Jali.) 
  • The famous ‘tree of life jali’ or the latticework done the semi-circular arch has been adopted by the Indian Institute of Management Ahmedabad as their official logo




  1. Home Ministry clears granting citizenship to Chakma-Hajong refugees
  • The Union Home Ministry cleared the citizenship for over one lakh Chakma-Hajongs.
  • Originally residents of the Chittagong Hill Tracts of the former East Pakistan, they had to flee when their land was submerged by the Kaptai dam project in the 1960s. Buddhists by faith, the Chakmas faced religious persecution in East Pakistan along with the Hajongs, who are Hindus.
  • They are settled in Arunachal Pradesh since 1964. The Chakma and Hajong refugees did not have citizenship and land rights. They were provided basic amenities by the state government.
  • In 2015, Supreme Court had asked the Centre to grant citizenship to Chakma-Hajongs. Arunachal Pradesh government had earlier opposed the move and had said it would change the demography of the State.
  • The citizenship will not entitle the refugees to rights enjoyed by Scheduled Tribes in the state, including land ownership.


  1. http://www.thehindu.com/news/national/home-ministry-clears-granting-citizenship-to-chakma-hajong-refugees/article19675921.ece?homepage=true
  2. http://indianexpress.com/article/who-is/who-are-chakma-and-hajong-refugees-in-arunachal-pradesh-4841615/