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24th September Current Affairs

When can MPs be suspended from the House?

In News:

Eight Rajya Sabha MPs were suspended on September 21 for unruly behaviour in the House.

The government moved a motion seeking the suspension of these MPs and it was passed by voice vote.

Power to suspend Rajya Sabha MPs:

The Chairman of Rajya Sabha is empowered under Rule Number 255 to “direct any Member whose conduct is in his opinion grossly disorderly to withdraw immediately” from the House.

Unlike the Speaker, however, the Rajya Sabha Chairman does not have the power to suspend a Member. The House may, by another motion, terminate the suspension.

The House may adopt a motion suspending the Member from the service of the House for a period not exceeding the remainder of the session.

Background:

It is the role and duty of the Presiding Officer — Speaker of Lok Sabha and Chairman of Rajya Sabha — to maintain order so that the House can function smoothly.

How can suspension of MPs be justified? Isn’t this an extreme step to take in order to curb unruly behaviour?

The solution to unruly behaviour has to be long-term and consistent with democratic values.

There can be no question that the enforcement of the supreme authority of the Presiding Officer is essential for smooth conduct of proceedings. However, a balance has to be struck. It must be remembered that the job of the Presiding Officer is to run the House, not to lord over it.

About Select Committees

In News:

Recently, the government pushed through two crucial agriculture Bills in Rajya Sabha, rejecting Opposition demands that they be referred to a Select Committee of Rajya Sabha.

Proceedings were disrupted as the Opposition protested against the fact that neither Bill had been scrutinised by a parliamentary committee.

What is a Select Committee?

This is formed for examining a particular Bill and its membership is limited to MPs from one House.

They are chaired by MPs from the ruling party.

Since Select Committees are constituted for a specific purpose, they are disbanded after their report.

Background:

Parliament scrutinises legislative proposals (Bills) in two ways:

By discussing it on the floor of the two Houses:

This is a legislative requirement; all Bills have to be taken up for debate.

By referring a Bill to a parliamentary committee:

But, since Parliament meets for 70 to 80 days in a year, there is not enough time to discuss every Bill in detail on the floor of the House. In such scenarios, the bill are referred to a parliamentary committee.

Referring of Bills to parliamentary committees is not mandatory.

When does a committee examine a Bill?

Bills are not automatically sent to committees for examination.

There are three broad paths by which a Bill can reach a committee. They are:

When the minister piloting the Bill recommends to the House that his Bill be examined by a Select Committee of the House or a joint committee of both Houses.

If the minister makes no such motion, it is up to the presiding officer of the House to decide whether to send a Bill to a departmentally related Standing Committee.

Also, a Bill passed by one House can be sent by the other House to its Select Committee.

What happens after the the bill is referred to a committee?

  1. The committee undertakes a detailed examination of the Bill.
  2. It invites comments and suggestions from experts, stakeholders and citizens.
  3. The government also appears before the committee to present its viewpoint.
  4. All this results in a report that makes suggestions for strengthening the Bill.
  5. The report of the committee is of a recommendatory nature.

Time taken to submit reports:

The Bill can only progress in Parliament after the committee has submitted its report. Usually, parliamentary committees are supposed to submit their reports in three months, but sometimes it can take longer.

Basel III compliant bonds

In News:

State Bank of India has raised ₹7,000 crore by issuing Basel III compliant bonds.

Key points:

Bonds issued qualify as tier II capital of the bank, and has face value of Rs 10 lakh each.

They bear coupon rate of 6.24 per cent per annum payable annually for a tenor of 10 years.

There is call option after 5 years and on anniversary thereafter. Call option means the issuer of the bonds can call back the bonds before the maturity date by paying back the principal amount to investors.

What are Basel guidelines?

Basel guidelines refer to broad supervisory standards formulated by group of central banks- called the Basel Committee on Banking Supervision (BCBS). The set of agreement by the BCBS, which mainly focuses on risks to banks and the financial system are called Basel accord.

Basel is a city in Switzerland which is also the headquarters of Bureau of International Settlement (BIS).

The purpose of the accords is to ensure that financial institutions have enough capital on account to meet obligations and absorb unexpected losses.

BASEL-I:

Introduced in 1988.

Focused almost entirely on credit risk, it defined capital and structure of risk weights for banks.

The minimum capital requirement was fixed at 8% of risk-weighted assets (RWA).

India adopted Basel 1 guidelines in 1999.

BASEL-II:

Published in 2004.

The guidelines were based on three parameters:

Banks should maintain a minimum capital adequacy requirement of 8% of risk assets.

Banks were needed to develop and use better risk management techniques in monitoring and managing all the three types of risks that is credit and increased disclosure requirements. The three types of risk are- operational risk, market risk, capital risk.

Banks need to mandatory disclose their risk exposure to the central bank.

Basel III:

In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008.

Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive.

The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity.

CAROTAR 2020 Rules

In News:

The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) came into force on September 21.

What are these rules?

They set guidelines for enforcement of the ‘rules of origin’ for allowing preferential rate on imports under free trade agreements.

They supplement the existing operational certification procedures prescribed under different trade agreements (FTA/ PTA/ CECA/ CEPA).

Background:

They were notified on 21st August, 2020 by the Department of Revenue. 30 day period  was given to importers and other stakeholders to familiarize themselves with new provisions.

CAROTAR rules:

An importer is now required to do due diligence before importing the goods to ensure that they meet the prescribed originating criteria.

A list of minimum information which the importer is required to possess has also been provided in the rules along with general guidance.

An importer would now have to enter certain origin related information in the Bill of Entry, as available in the Certificate of Origin.

Implications:

The new norms have been framed with a view to check inbound shipments of low quality products and dumping of goods by a third country routed through an FTA partner country.

Under these rules, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it.

Significance of these rules:

The new Rules will support the importer to correctly ascertain the country of origin, properly claim the concessional duty and assist Customs authorities in smooth clearance of legitimate imports under FTAs.

The new Rules would also strengthen the hands of the Customs in checking any attempted misuse of the duty concessions under FTAs.