ESI 247 - Nov 2023 - Day 6

ESI Current Affairs | Nov 2023 | Day 6
Topics to be covered today
• IMF Quota increase

• CAFRAL Report
• RBI Directions on Governance, Risk,
Controls and Assurance Practices
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Q1. Recently, in November 2023, The executive board of
the International Monetary Fund (IMF) has approved a
proposal to make a _____ % increase in the quota allocated
to members in proportion to their current quotas.
A. 30
B. 40
C. 50
D. 60
E. 100
C. 50
ESI Current Affairs | November 2023 | Daily@8
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The executive board of the International Monetary
Fund (IMF) has approved a proposal to make a 50 per
cent increase in the quota allocated to members in
proportion to their current quotas.
• The IMF’s board of governors conducts general quota

reviews at least every five years.
• Any changes in quotas require approval by 85 per cent
of the total voting power, and a member’s own quota
cannot be changed without its consent.
Why this increase in Quota systems?
The quota increase would enhance the IMF’s

permanent resources and strengthen the quota-based
nature of the Fund by reducing the reliance on
borrowing and thus ensuring the primary role of
quotas in fund resources.
The proposal also envisages that once quota increases are

in effect, borrowed resources comprising the bilateral
borrowing agreements and new arrangements to borrow
would be reduced to maintain the Fund’s current lending
capacity.
How does Quota system work?
• Quotas are the building blocks of the IMF’s financial and

governance structure.
• An individual member country’s quota broadly reflects its
relative position in the world economy.
• Quotas are denominated in SDRs, the IMF’s unit of
account.
• These determine the maximum amount of financial
resources a member is obliged to provide to the IMF.
• They are also key determinants of voting power besides
the maximum amount of loan a member can avail of.
How does Quota system work?
About Special Drawing Rights (SDR)
• SDR is an international reserve asset created by the IMF
in 1969.
• Purpose is to supplement its member countries’ official
reserves.
• It is based on a basket of five major currencies: U.S.
dollar, euro, Chinese renminbi, Japanese yen, and
British pound sterling.
• IMF members – and the IMF itself – hold SDRs and the
IMF has the authority to approve other holders, such as
central banks and multilateral development banks.
• Individuals and private entities cannot hold SDRs.
Q2. The first edition of the India Finance Report
has been released by CAFRAL, which is an
independent body set up by which of the
following?
A. Ministry of Finance
B. NITI Aayog
C. RBI
D. SEBI
E. World Bank
C. RBI
• The first edition of the India Finance Report has
been released.
• Published by - Centre for Advanced Financial
Research and Learning (CAFRAL).
• CAFRAL is an independent body set up by the
Reserve Bank of India
The report’s theme is “Connecting the Last Mile: Non-

Banking Financial Companies (NBFCs) in India.”
KEY FINDINGS of the REPORT
• Monetary Policy Transmission (MPT) through NBFCs

is strong, but there is a delay of nearly two years to
see its impact on their balance sheet.
• NBFCs facilitate further deepening of financial
inclusion by serving underserved subprime and
marginalized borrowers.
• Retail lending by NBFCs has grown significantly over
the last decade, increasing by 223.2%, primarily
through technology leverage.
• NBFCs are at the forefront of digital lending, with a

share of digital lending to overall lending at 60.53% for
NBFCs compared to 5.53% for banks in FY 2020.
• The rapid growth in the NBFC sector has coincided
with a decline in the share of bank credit.
• The growth of NBFCs in India has proliferated since the
global financial crisis, although they faced disruptions
and systemic spillovers in 2018-19, notably due to the
(Infrastructure Leasing & Financial Services) IL&FS
default.
A 10 per cent increase in per capita UPI transactions

usually leads to a 4.6 per cent rise in fintech lending and
1.5 per cent in lending by commercial banks.
The relationship is even stronger when the speed of

growth is considered:
a 10 per cent increase in the UPI growth rate is
associated with an almost 8.1 per cent increase in
fintech growth, compared to a 6.9 per cent
corresponding rise in SCB (scheduled commercial
banks) lending growth.
Q3. Reserve Bank of India (Information Technology
Governance, Risk, Controls and Assurance Practices)
Directions, 2023” have been recently released in November
2023. These directions will come into effect from _____
A. April 1, 2025
B. January 1, 2024
C. December 31, 2024
D. January 1, 2025
E. April 1, 2024
E. April 1, 2024
The Reserve Bank of India (RBI) has come out with a new
comprehensive master direction related to information
technology (IT) governance, risk, controls and assurance
practices for banks and NBFCs.
• These directions shall be called the “Reserve

Bank of India (Information Technology
Governance, Risk, Controls and Assurance
Practices) Directions, 2023”.
• These will come into effect from April 1, 2024.
RBI Guidelines
• REs (regulated entities) shall put in place a robust IT

Service Management Framework for supporting their
information systems and infrastructure to ensure the
operational resilience of their entire IT environment.
• The risk management policy of the RE shall include IT

related risks, including the Cyber Security related risks.
• Risk Management Committee of the Board (RMCB) in

consultation with the ITSC shall periodically review and
update the same at least on a yearly basis.
RBI Guidelines
• REs shall have a documented data migration

policy specifying a systematic process for data
migration, ensuring data integrity, completeness
and consistency.
• The policy shall contain provisions pertaining to

signoffs from business users and application
owners at each stage of migration, maintenance
of audit trails, etc.
RBI Guidelines
• Every IT application which can access or affect critical
or sensitive information, shall have necessary audit and
system logging capability and should provide audit
trails.
• REs shall analyze cyber incidents (including through

forensic analysis, if necessary) for their severity,
impact and root cause.
• They shall take measures, corrective and preventive,
to mitigate the adverse impact of incidents on
business operations.
HOME WORK QUESTION
Production Gap Report 2023

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ESI Current Affairs | Nov 2023 | Day 6

Topics to be covered today

• IMF Quota increase

• The IMF’s board of governors conducts general quota

The quota increase would enhance the IMF’s

The proposal also envisages that once quota increases are

• Quotas are the building blocks of the IMF’s financial and

The report’s theme is “Connecting the Last Mile: Non-

• Monetary Policy Transmission (MPT) through NBFCs

• NBFCs are at the forefront of digital lending, with a

A 10 per cent increase in per capita UPI transactions

The relationship is even stronger when the speed of

• These directions shall be called the “Reserve

• REs (regulated entities) shall put in place a robust IT

• The risk management policy of the RE shall include IT

• Risk Management Committee of the Board (RMCB) in

• REs shall have a documented data migration

• The policy shall contain provisions pertaining to

• REs shall analyze cyber incidents (including through

Production Gap Report 2023

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