UPSC Key: Cyprus, Deoxyribonucleic Acid and Interest Rate

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Important topics and their relevance in UPSC CSE exam for June 16, 2025. If you missed the June 15, 2025 UPSC CSE exam key from the Indian Express, read it here
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PM reaches Cyprus, Turkey's rival & EU chair next year, to deepen ties
Syllabus:
Preliminary Examination: Current events of national and international importance
Main Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests.
What's the ongoing story: Becoming the first Indian Prime Minister to visit Cyprus in 23 years, Prime Minister Narendra Modi reached the Mediterranean island country Sunday where he was greeted at the airport by President Nikos Christodoulides.
Key Points to Ponder:
• Map Work-Cyprus
• Cyprus is located in which sea?
• India's approach towards Cyprus in recent diplomacy-what you know about the same?
• India's relations with Cyprus are guided by which core principles?
• Know the strategic importance of Cyprus in the Eastern Mediterranean.
• How India can leverage its relationship with Cyprus in the backdrop of geopolitical tensions with Turkey?
• Turkey-Cyprus rivalry-what you know about the same?
• 'Cyprus is set to take over the Presidency of the EU'-how strengthening Indo-Cypriot ties can benefit India-EU relations.
Key Takeaways:
• Touched by this 'special gesture' of welcoming him at the airport, Modi said, 'This visit will add significant momentum to India-Cyprus relations, especially in areas like trade, investment and more.'
• The two sides are expected to sign multi-level cooperation agreements when the two leaders meet Monday for talks.
• Cyprus is the Prime Minister's first stop on a three-nation tour that will also take him to Canada for the G7 meeting and Croatia in the Balkans. Atal Bihari Vajpayee was the last Prime Minister to visit Cyprus in 2002.
• Modi's choice of Cyprus for his first foreign visit after Operation Sindoor is a signal to neighbouring Turkey which openly supported Pakistan during the recent hostilities.
• Cyprus, which has been engaged in territorial disputes with Turkey which invaded the island in 1974 and occupied its north, has consistently supported India's position on Kashmir, cross-border terrorism and UN Security Council reforms.
• Besides countering the Islamabad-Ankara alignment, the visit to the Mediterranean nation also comes at a time when Delhi is looking to build bridges with Europe – External Affairs Minister S Jaishankar just concluded a six-day visit to France and Belgium.
• The official talks Monday between the two leaders will also touch upon the India-Middle East-Europe Economic Corridor (IMEC). Cyprus's maritime connectivity and strategic location makes it a potential hub in the IMEC project, which was mooted by India during its G20 Presidency in 2023.
• Cyprus is set to hold the rotating presidency of the EU Council in 2026, and this visit by the Prime Minister will work to deepen India-EU collaboration.
• As India seeks to diversify its energy sources, Cyprus being a key player in eastern Mediterranean natural gas exploration becomes crucial. In fact, strong India-Cyprus ties may help India get broad-based EU support for its various global initiatives, besides the IMEC.
Do You Know:
• PM Modi will pay an official visit to Cyprus, Canada and Croatia from June 15-19, the MEA said Saturday. PM Modi will visit Cyprus on June 15-16, on his way to Canada to participate in the G7 Summit in Kananaskis on June 16-17, and conclude the five-day visit with an official visit to Croatia on June 18. This will be PM Modi's first foreign tour after Operation Sindoor.
• The visit will reaffirm the shared commitment of the two countries to deepen bilateral ties and strengthen India's engagement with the Mediterranean region and the European Union, as per the MEA. Cyprus had condemned the Pahalgam terror attack and indicated that it would raise the issue of cross-border terrorism emanating from Pakistan at the EU-level discussions. The visit will be timely as Cyprus is set to take over the Presidency of the Council of the EU in the first half of 2026.
• Locked in territorial disputes with Turkey and facing security challenges, Cyprus is looking to expand defence cooperation and will welcome any assistance from India. Delhi is also aiming to consolidate international support following Operation Sindoor, and the fact that Modi's stopover at Cyprus precedes his departure for Canada and attendance at the G7 Summit is also telling.
• While the agenda for the G7 huddle is focussed on building supply chains for critical minerals, energy security and countering transnational crime, discussions could be on the raging Israel-Iran conflict and containing escalation. Modi is likely to have discussions with various stakeholders on the issue and express India's oft-repeated stance on dialogue and diplomacy as the way forward.
Other Important Articles Covering the same topic:
📍PM Modi begins Cyprus, Canada, Croatia tour Sunday, 1st foreign visit after Op Sindoor
📍PM Modi in Cyprus: 3 reasons why the nation matters for India, what is the Turkey angle
THE EDITORIAL PAGE
A selfie of the nation
Syllabus:
Preliminary Examination: Indian Polity and Governance-Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc.
Mains Examination:
• General Studies I: population and associated issues
• General Studies II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
What's the ongoing story: Satish Deshpande Writes: Coming Census will be unique. Questions raised by caste count and delimitation will be answered in a particular political conjuncture
Key Points to Ponder:
• What is Census?
• What kind of data is published in the Census?
• What is the difference between Census, caste census and SECC?
• What are the main objectives for conducting the next census?
• How could the upcoming census affect political representation in various states?
• What is the significance of delimitation in relation to Lok Sabha elections?
• How might caste data collection impact future government policies?
• What are some potential challenges in implementing caste-based data in the census?
Key Takeaways:
• There are two obvious reasons the recently notified national Census of 2026-27 will be like no other Census in independent India. These have already attracted a lot of attention in the media: The counting of castes beyond the Scheduled Castes and Scheduled Tribes, and the new delimitation exercise that will determine the political weight of the states of the Union and the shape of our Parliament.
• However, the real reason the coming Census will be unique is the particular conjuncture in which the questions raised by caste and delimitation will have to be answered.
• The 84th Amendment of February 2002, enacted under the Atal Bihari Vajpayee-led NDA government, froze states' share of Lok Sabha seats to the allocations based on the 1971 Census 'until the relevant figures for the first Census taken after the year 2026 have been published' (the previous reference year had been 2000). Because seat allocation has been proportionate to population (to ensure that each parliamentarian represents roughly similar numbers of electors), this freeze was intended to forestall the apprehensions of the northern states gaining at the expense of the south.
• The circumstances surrounding caste enumeration are also very different today. The last nationwide caste count happened in the 1931 Census amidst protests from nationalist groups who saw this as a coloniser's divisive ploy. In the early 20th century, the Census did in fact help to accelerate the consolidation of caste identities because this was the moment of aggregation — a time when coalitions were being built across clusters of castes.
• First and most important, as the first national Census after Independence that will count the castes of all Indians, the coming Census will end the statistical anonymity of the so-called 'upper' castes who have benefited disproportionately from state-sponsored development.
• There is another feature of the current conjuncture that may prove to be decisive. This is the global tendency of electorally secure authoritarian regimes to produce 'alternative facts' in response to inconvenient facts. Taken to its logical end, this tendency ensures that, wherever and whenever possible, inconvenient facts are aborted before they can be born. We can only hope that the census machinery will be spared such expectations.
Do You Know:
• The Government recently said the process of data collection for the Census, along with caste enumeration, would commence early next year and give the snapshot of the country's population as on March 1, 2027. The last Census provided population data as on March 1, 2011. The next Census was due in 2020-2021, but was delayed due to Covid pandemic.
• The exercise this year will officially begin with a notification announcing the government's intent of conducting the Population Census to be published in an official gazette tentatively on June 16 this year.
• The Census would be conducted in two phases — house listing and population count. House listing, the first phase, is expected to take about 5-6 months and the population count, which is the second phase, sources said, is expected to start in February 2027 and will be completed in a month.
• The reference date for hilly areas, including the Union Territory of Ladakh, and snow-bound areas of Jammu and Kashmir, Himachal Pradesh and Uttarakhand, is October 1, 2026. For the rest of India, it is March 1, 2027. The reference date is the specific point of time for which the data on population is collected.
Other Important Articles Covering the same topic:
📍Explained: How India conducts its Census — and what is new in 2027
EXPLAINED
A-I plane crash: how DNA analysis is used to identify victims
Syllabus:
Preliminary Examination: Current events of national and international importance.
Main Examination:
• General Studies III: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, biotechnology and issues relating to intellectual property rights.
• General Studies III: Disaster and disaster management.
What's the ongoing story: After the Air India Boeing 787 Dreamliner crash in Ahmedabad, authorities are using DNA analysis to identify the remains of those killed in the accident. DNA samples from victims' family members have already been collected, and few remains have already been identified.
Key Points to Ponder:
• What is deoxyribonucleic acid (DNA)?
• What are the 4 types of DNA?
• How DNA function?
• What is the DNA analysis?
• Know the process of DNA profiling in the context of mass fatality events like the Ahmedabad air crash.
• What are the scientific and legal challenges involved in using DNA for post-mortem identification in air disasters?
• How does mitochondrial DNA help in forensic identification when traditional DNA is degraded?
Key Takeaways:
• With the exception of identical twins, every person has a unique DNA that is present in nearly every cell of their body. DNA identification is the gold standard for identifying human remains, especially after mass fatality events in which bodies might not be easy to identify otherwise.
• As soon as an individual dies, their DNA begins to degrade. Over time, this degradation can make it difficult, even impossible, for the DNA to be analysed. The extent of degradation depends on the kind of tissue DNA is extracted from and the conditions in which the body is kept, among other factors.
• DNA survives much better in cold and dry conditions, than when it is hot and humid. This is why samples have to be collected as soon as possible, and once collected, stored in as cool and dry an environment as possible. They should ideally be frozen at minus 20 degrees Celsius, or, in the case of soft tissues (skin, muscles, etc.), they may be stored in 95% ethanol.
• DNA from soft tissues degrades much faster than that from hard tissues (bones and teeth). This is because cells in hard tissues are largely protected from the effects of putrefaction and decomposition. This is why forensic investigators usually collect DNA from hard tissue.
• After plane crashes, the collection of tissue samples from the wreckage usually takes a couple of weeks. But this depends on the magnitude of the tragedy — after the September 11, 2001 attacks in New York, it took authorities 10 months to collect the samples of the nearly 3,000 victims.
• To identify who the collected DNA belongs to, reference samples are collected from biological relatives. Parents and children of the victim are ideal candidates for providing these samples, given that they share 50% of each other's' DNA.
Do You Know:
• After they samples are collected, the next step is to extract DNA from them. Subsequently, depending on the quality of the collected DNA, scientists can choose between a number of different methods of analysis.
• Short tandem repeat (STR) analysis: The method evaluates short tandem repeats, which are essentially short repeating sequences of DNA. STRs are used for DNA identification as they widely vary between individuals. 'After analysing 15 or more of these hyper-variable regions of DNA… the resulting profile can be used to ascertain family relationships with a high degree of confidence,' according to a report by the International Committee of the Red Cross (ICRC).
Note that STRs are typically found on nuclear DNA which is located within the nucleus of a cell. Therefore, to carry out STR analysis it is essential that the nuclear DNA extracted from the sample is not degraded.
• Mitochondrial DNA (mtDNA) analysis: This method is used when nuclear DNA is degraded or unavailable. Mitochondrial DNA is found within the cell's energy-producing organelles known as mitochondria. As mtDNA is present in multiple copies within the cell, it is easier to recover from human remains that are not well preserved.
• Y chromosome analysis: Humans have two types of sex chromosomes, X and Y: biological males typically have one X and one Y chromosome, and biological females typically have two X chromosomes.
• Single nucleotide polymorphisms (SNPs) analysis: The method is typically used when the DNA to be analysed is highly degraded.A SNP is a variation in the DNA sequence where a single base — A, C, G, or T — at a specific location differs among people. Given that SNPs are unique to each person, they can be used for identification purposes with the help of reference samples taken from, let's say, the victim's personal belongings such as a toothbrush and hairbrush.
Other Important Articles Covering the same topic:
📍Why a majority of aviation accidents occur during takeoff & landing
Previous year UPSC Prelims Question Covering similar theme:
1. Consider the following statements: DNA Barcoding can be a tool to:(2022)
1. assess the age of a plant or animal.
2. distinguish among species that look alike.
3. identify undesirable animal or plant materials in processed foods.
Which of the statements given above is/are correct?
(a) 1 only
(b) 3 only
(c) 1 and 2
(d) 2 and 3
2. With reference to the recent developments in science, which one of the following statements is not correct? (2019)
(a) Functional chromosomes can be created by joining segments of DNA taken from cells of different species.
(b) Pieces of artificial functional DNA can be created in laboratories.
(c) A piece of DNA taken out from an animal cell can be made to replicate outside a living cell in a laboratory.
(d) Cells taken out from plants and animals can be made to undergo cell division in laboratory petri dishes.
War in Middle East: what next
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies II: Effect of policies and politics of developed and developing countries on India's interests.
What's the ongoing story: As of June 15, Israel and Iran have exchanged four waves of strikes. Among a number of targets hit by either side, Israel's assassination of key Iranian generals on June 13 remains the most prominent outcome thus far.
Key Points to Ponder:
• Know the historical causes of the ongoing conflicts in the Middle East.
• Map Work- Middle East
• Israel's latest military operation inside Iran-what you know so far?
• Iran-Israel Conflict-know the background
• What does Israel look to achieve?
• What does this mean for Iran?
• What are Iran's choices?
Key Takeaways:
• Israel targeted the Iranian Supreme Leader's office by assassinating Ali Shamkhani, political adviser to Ali Khamenei and key overseer of the US-Iran nuclear talks. Israel is expected to continue its escalation, as the Israel Defense Forces (IDF) on Sunday afternoon issued warnings in Persian to Iranian civilians to leave military weapons production facilities.
• Israel's June 13 attack on Iran was unprecedented in scale and scope relative to any attack on Iran since the Iran-Iraq war. However, as far as Israel's long-term objective of dismantling Iran's nuclear programme is concerned, its attacks have been limited.
• In a silo, Israel's actions technically reinforce US President Donald Trump's immediate bargaining position vis-à-vis Iran in the nuclear deal negotiations, by hindering short-term progress on Iran's nuclear programme. Consequently, the US President has demanded that Iran resume talks to prevent further conflict, especially since Iranian 'hardliners' relevant to the nuclear negotiations are now dead.
• But Israel is yet to effectively hit Iran's Fordow and Khondab nuclear sites; Fordow is fully underground and central to Iran's nuclear programme. While Israel's strike on the Natanz enrichment facility was its first overt action at this scale, the plant has long been subject to Israeli sabotage operations. Israeli experts, such as former Israeli PM Ehud Barak, continually assert that neither Israeli nor American military action can eliminate Iran's nuclear programme.
Do You Know:
• Israel's claims of Iran's closeness to a nuclear weapon have been repeated across the decades and contradict both American and International Atomic Energy Agency (IAEA) assessments. Hence, Israel's two other objectives — as an assessment by British think tank Chatham House also shows — are to degrade Iranian defences and take out its operational leadership. While Israel will arguably need greater US involvement to effectively hit sites such as Fordow, its focus on Iranian personnel and conventional assets reveal that it is prepared for a slow-burn war with Iran.
• Israel's actions seem to be based on two assumptions — that all Iranian retaliation can be successfully absorbed, and that with each hit, Iran becomes weaker.
• Tactically and objectively, Israel's assessment of Iran's weaknesses has been vindicated insofar as the security of key Iranian personnel is concerned. However, notwithstanding Iran's broader conventional inferiority to Israel, Tehran has shown an ability to reciprocate Israeli attacks at a smaller scale. For instance, after Israel's attack on Iran's Asaluyeh refinery and South Pars gas fields, Iran successfully targeted the Bazan oil refinery (Israel's largest) in Haifa — crucial to the IDF's fuel needs.
• International reactions to Israel's aggression have varied. European and American reactions have focused on the dangers of Iran's nuclear programme, while not acknowledging Israel's provocations.
Other Important Articles Covering the same topic:
📍Why Israel struck Iran, what it targeted
Previous year UPSC Main Question Covering similar theme:
📍'India's relations with Israel have, of late, acquired a depth and diversity, which cannot be rolled back.' Discuss. (2018)
WHY PUNJAB IS STRUGGLING TO DIVERSIFY FROM PADDY FARMING
Syllabus:
Preliminary Examination: Economic and Social Development
Main Examination: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment
What's the ongoing story: Despite Punjab government's efforts to diversify the state's crop mix, the state is once again staring at a near-record area under paddy cultivation. Last year, Punjab saw an all-time high of 32.44 lakh hectares under paddy. Current trends suggest the acreage this year will remain in the same ballpark.
Key Points to Ponder:
• What are the major reason for the continued dominance of paddy cultivation in Punjab?
• The excessive cultivation of paddy in Punjab has led to certain environmental issues-what are they?
• Which central government scheme promotes crop diversification in India?
• The system of rice intensification (SRI) is a method used in paddy cultivation. What is its primary benefit?
• Despite multiple policy interventions, paddy continues to dominate Punjab's agriculture-discuss
Key Takeaways:
• Roughly 35-36 lakh hectares are under cultivation in Punjab during the kharif season (June to October). Last year this figure was 35.2 lakh hectares. The main crops during the kharif season are paddy (basmati and non-basmati), cotton, maize, certain pulses (like moong, urad and arhar), oilseeds (like groundnut and sesame), and sugarcane (cane is cultivated all year round).
• The problem is that growing the same crops year after year on the same land increases vulnerability to pest and disease attacks. Paddy cultivation specifically depletes soil nutrients which increases dependence on chemical fertilisers and pesticides, and guzzles water like no other crop. Punjab's groundwater table has been declining by 0.5 meters per annum on an average, largely courtesy paddy.
Do You Know:
• Punjab, through various schemes and policies, has long tried to address the paddy monoculture problem. This year, the state has launched a pilot project to divert 12,000 hectares from paddy to maize, and increase area under cotton cultivation by 15%.
• But even if these plans succeed, non-paddy kharif crops would only have an acreage of around 3.16 lakh hectares, and paddy approximately 32.04 lakh hectares. That would mean about 91% of the kharif cropped area would still be under paddy, close to last year's all-time high.
• In fact, if the cropped area during the season goes beyond last year's 35.20 lakh hectares — as it has done several times in the past — then the area under paddy could actually increase in absolute terms.
• Previous attempts at diversification have also not yielded expected results. Notably, the state in 2009 enacted the Punjab Preservation of Subsoil Water Act, which barred any nursery-sowing and transplanting before May 15 and June 15, respectively. That ended up pushing the cropping cycle back, shortening the window between the kharif harvest and the sowing of wheat (the predominant winter crop), forcing farmers to burn paddy stubble to clear fields, adding to air pollution across the region.
• There are several reasons why Punjab cannot look past paddy.
* First, plans such as the one to divert 12,000 hectares to maize simply are not ambitious enough to make any real difference, even if they succeed.
* Second, guaranteed procurement at Minimum Support Price (MSP) makes paddy more attractive than alternatives like maize or pulses which enjoy much weaker market support.
* Third, the current situation is the product of decades of flawed policy-making from the government, which has provided freebies like eight-hours of free electricity that farmers use to run irrigation pumps, and subsidies on fertilisers. These policy positions are fundamentally aligned towards the cultivation of paddy.
Other Important Articles Covering the same topic:
📍Pilot to replace paddy with water-saving kharif maize 'too little, too late': experts
Previous year UPSC Prelims Question Covering similar theme:
3. What is/are the advantage/advantages of zero tillage in agriculture? (2020)
1. Sowing of wheat is possible without burning the residue of the previous crops.
2. Without the need for a nursery of rice saplings, direct planting of paddy seeds in the wet soil is possible.
3. Carbon sequestration in the soil is possible.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Centre's rationale behind MGNREGS spending cap, the concerns with it
Syllabus:
Preliminary Examination: Economic and Social Development
Main Examination: General Studies II: Important aspects of Governance and Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.
What's the ongoing story: The Union Finance Ministry has capped spending under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at 60% of its annual allocation for the first half of Financial Year (FY) 2025-26. There was no such spending limit until now.
Key Points to Ponder:
• What is the Mahatma Gandhi National Rural Employment Guarantee Program?
• What are the objectives of MGNREGA 2025?
• 'For the first time, the government has capped spending under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)'-Know in detail
• How were the new wage rates for unskilled manual workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005 decided?
• What is the rationale provided by the Centre for imposing spending caps on MGNREGS?
• How the MGNREGS spending cap alters the demand-driven nature of the scheme?
Key Takeaways:
•The programme has been brought under the Monthly Expenditure Plan/Quarterly Expenditure Plan (MEP/QEP), a spending control mechanism introduced by the Finance Ministry in 2017. MGNREGS, which provides up to 100 days of employment to any rural household on demand, was thus far exempt from MEP/QEP on account of being demand-driven.
• MGNREGS has long been plagued with financial troubles, which are perhaps what the Finance Ministry hopes to address by implementing the MEP/QEP mechanisms.
• Data from the Ministry of Rural Development show that over the last few years, more than 70% of the budget is frequently exhausted by September, and while supplementary allocations are often made in December, even these run out by January.
• This leaves significant pending dues by the end of the FY — over the last five FYs, pending dues have ranged between Rs 15,000 crore to Rs 25,000 crore. On average, 20% of the subsequent FY's budget is spent in clearing these.
• By implementing an expenditure cap, the Finance Ministry is likely ensuring an adequate budget will remain for the latter half of the FY, so that no supplementary allocation will have to be made.
• The MGNREGS budget for FY 26 stands at Rs 86,000 crore, and FY 25 ended with pending dues of Rs 21,000 crore. As on June 12, the Centre has released 28% of FY 25-26's budget. Pending dues for FY 26 stand at Rs. 3,262 crore, and for FY 25 at Rs 19,200 crore. Just clearing these dues will exhaust approximately 50% of the budget.
Do You Know:
• Social security and welfare in India is implemented either via schemes designed and executed by the government of the day (for instance, PM Kisan Samman Nidhi or the LPG scheme), or through schemes based on specific legislation which establish certain programmes as statutory rights, like MGNREGS (based on MGNREG Act, 2005) or the Public Distribution System (based on National Food Security Act, 2013).
• The former can, and often are, altered, discontinued, or repackaged when a new government comes to power. For the latter, while the government does have the power to determine the modalities of implementing legislation, this power is conferred by the legislature and is limited in its scope.
• The MGNREGA recognises employment as a statutory right. The Act signified a critical shift from this being a negative right under Article 21 of the Constitution (which mandated that the state must not interfere with your livelihood unreasonably), to a positive statutory obligation on the government to provide employment on demand.
• The 60% spending cap ordered by the Finance Ministry makes it virtually impossible to realise an entitlement that is legally guaranteed under the Act once the ceiling is reached. Constitutional courts have held that financial inability cannot be a reason to disregard statutory or constitutional duties, including in Swaraj Abhiyan v Union of India (2016), Municipal Council, Ratlam vs Shri Vardhichand (1980), and Paschim Banga Khet Mazdoor Samity v State of W.B. (1996).
Other Important Articles Covering the same topic:
📍In a first, NREGS spend capped at 60% for first half of FY26
Previous year UPSC Prelims Question Covering similar theme:
4. Among the following who are eligible to benefit from the 'Mahatma Gandhi National Rural Employment Guarantee Act'? (2011)
(a) Adult members of only the scheduled caste and scheduled tribe households
(b) Adult members of below poverty line (BPL) households
(c) Adult members of households of all backward communities
(d) Adult members of any household
ECONOMY
SBI cuts savings account, FD rates
Syllabus:
Preliminary Examination: Current events of national and international importance.
Main Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
What's the ongoing story: The country's largest lender State Bank of India (SBI) has reduced its savings bank account rate by up to 50 basis points (bps) across all account balances, effective June 15.
Key Points to Ponder:
• What is a savings account?
• What is the interest rate in fixed deposits?
• Are interest rates good for the economy?
• Do high interest rates cause inflation?
• What explains the impact of a reduction in savings account interest rates by banks?
• A fall in fixed deposit interest rates will most likely benefit which section of the society?
• Which monetary policy stance may indirectly influence banks like SBI to lower deposit rates?
• How a reduction in deposit rates by major banks like SBI affects monetary transmission and credit flow in the economy.
Key Takeaways:
• The bank has also reduced its interest rates on fixed deposits below Rs 3 crore by 25 basis points on different maturities. The new interest rates are applicable from June 15. The move follows a 50 bps reduction in the repo rate – the key policy rate – by the Reserve Bank of India (RBI) last week.
• The reduction in interest rates by SBI on savings bank account and fixed deposits will impact depositors, especially senior citizens, who are dependent on interest earned from funds parked with banks.
• The lender has revised its savings bank deposits rate to 2.5 per cent on all account balances. Prior to this, SBI was offering a rate of 2.7 per cent on account balances below Rs 10 crore, and 3 per cent on balances of Rs 10 crore and above.
• On fixed deposit rates, or retail domestic term deposits, SBI has cut interest rates to 6.05 per cent for the general public on deposits maturing between 211 days to less than one year, compared to 6.3 per cent earlier. The lender has revised fixed deposits rate to 6.55 per cent for senior citizens on the same tenor, compared to 6.8 per cent earlier.
• For deposits maturing in one year to less than two years, the revised interest rate is 6.25 per cent compared to 6.5 per cent. Senior citizens will now be offered a rate of 6.75 per cent on the similar maturity, compared to 7 per cent earlier.
• The bank is now offering an interest rate of 6.45 per cent on term deposits maturing in two years to less than three years, as against the earlier rate of 6.7 per cent. For the same maturity, the interest rate for senior citizens has been reduced to 6.95 per cent from 7.2 per cent.
Do You Know:
• A deposit interest rate is paid by financial institutions to deposit account holders. Deposit accounts include certificates of deposit (CD), savings accounts, and self-directed deposit retirement accounts.
Other Important Articles Covering the same topic:
📍Deposit rates may remain steady as liquidity improves, inflation falls
Previous year UPSC main Question Covering similar theme:
📍Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments (2019)
PRELIMS ANSWER KEY
1.(b) 2.(a) 3.(b) 4.(d)
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Priya Kumari Shukla is a Senior Copy Editor in the Indian Express (digital). She contributes to the UPSC Section of Indian Express (digital) and started niche initiatives such as UPSC Key, UPSC Ethics Simplified, and The 360° UPSC Debate. The UPSC Key aims to assist students and aspirants in their preparation for the Civil Services and other competitive examinations. It provides valuable guidance on effective strategies for reading and comprehending newspaper content. The 360° UPSC Debate tackles a topic from all perspectives after sorting through various publications. The chosen framework for the discussion is structured in a manner that encompasses both the arguments in favour and against the topic, ensuring comprehensive coverage of many perspectives.
Prior to her involvement with the Indian Express, she had affiliations with a non-governmental organisation (NGO) as well as several coaching and edutech enterprises. In her prior professional experience, she was responsible for creating and refining material in various domains, including article composition and voiceover video production. She has written in-house books on many subjects, including modern India, ancient Indian history, internal security, international relations, and the Indian economy. She has more than eight years of expertise in the field of content writing.
Priya holds a Master's degree in Electronic Science from the University of Pune as well as an Executive Programme in Public Policy and Management (EPPPM) from the esteemed Indian Institute of Management Calcutta, widely recognised as one of the most prestigious business schools in India. She is also an alumni of Jamia Milia Islamia University Residential Coaching Academy (RCA).
Priya has made diligent efforts to engage in research endeavours, acquiring the necessary skills to effectively examine and synthesise facts and empirical evidence prior to presenting their perspective. Priya demonstrates a strong passion for reading, particularly in the genres of classical Hindi, English, Maithili, and Marathi novels and novellas. Additionally, she possessed the distinction of being a cricket player at the national level.
Qualification, Degrees / other achievements:
Master's degree in Electronic Science from University of Pune and Executive Programme in Public Policy and Management (EPPPM) from Indian Institute of Management Calcutta
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