Central Bank Digital Currency (CBDC)

In News

  • Recently, the RBI has announced the launch of India’s Central Bank Digital Currency (CBDC) from December 1.

What is Central Bank Digital Currency (CBDC)? 

  • It is the legal tender issued by a central bank in a digital form. 
  • It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency.
    • Only its form is different.
  • It will be an electronic version of cash.
  • It will be primarily meant for retail transactions. 
  • It will be potentially available for use by all which includes the private sector, non-financial consumers and businesses.
  • It will be able to provide access to safe money for payment and settlement.
  • It will be the direct liability of the central bank.

Who can use the retail CBDC?

  • It is the first phase of a pilot project that will cover select locations and banks in a closed user group (CUG) comprising participating customers and merchants.
  • It will initially cover the four cities of:
    • Mumbai
    • New Delhi
    • Bengaluru
    • Bhubaneswar.
  • Four bankswill be involved in the controlled launch of the digital currency in these four cities: 
    • State Bank of India
    • ICICI Bank
    • Yes Bank
    • IDFC First Bank.
  • The service will be subsequently extended to the cities: Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
    • Four more banks: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will join the project later. 

How will the retail digital rupee work?

  • It will be issued in the same denominations as paper currency and coins and will be distributed through banks.
  • Users will be able to transact through a digital wallet which would be stored on mobile phones and devices.
  • Transactions can be both:
    • Person to person (P2P)
    • Person to merchant (P2M).
  • Payments to merchants can be made using QR codes displayed at merchant locations.
  • It will not earn any interest and can be converted to other forms of money like deposits with banks
  • RBI has demarcated the digital rupee into two broad categories:
    • General purpose (retail)
    • Wholesale
      • The RBI has already launched the digital rupee for the wholesale segment to settle secondary market transactions in government securities.
      • Wholesale CBDC is designed for restricted access to select financial institutions. 
      • It has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment, inter-bank market and capital market more efficiently and securely in terms of operational costs, use of collateral and liquidity management.


  • Lack of Consumer Protection: No Dispute Settlement Mechanisms and control of Securities and Exchange Board of India (SEBI). 
  • Digital Illiteracy: The population of India is currently not equipped to deal with cryptos.
  • Security Risks: Cyberattacks on wallets, exchange mechanism (Crypto jacking). 
  • Shield to Crime:  If not regulated and monitored properly, it can be used for illicit trading, criminal activities, & organised crimes. 
  • Popularity of Cryptocurrencies: RBI has repeatedly flagged concerns over money laundering, terror financing, tax evasion, etc with private cryptocurrencies like Bitcoin, Ether, etc.


  • It aims at reduction in operational costs involved in physical cash management, fostering financial inclusion, bringing resilience, efficiency and innovation in the payments system.
  • It will add efficiency to the settlement system and boost innovation in cross-border payments space.
  • It will provide the public with the uses that any private virtual currencies can provide without any associated risks.
  • It will curb issues such as money laundering, terror financing, tax evasion, etc.  
Fiat MoneyIt is a government-issued currency that is not backed by a commodity such as gold.It gives central banks greater control over the economy because they can control how much money is printed.Most modern paper currencies such as the US dollar are fiat currencies.One danger of fiat money is that governments will print too much of it, resulting in hyperinflation.

India-Israel Relations

In News

  • Recently, the President of Israel attended a cultural event at the Israel Museum to inaugurate the new exhibition titled ‘Body of Faith: Sculpture from the National Museum of India’

Israel on ties with India: Key Highlights

  • This exhibition, literally ‘spirit within matter’ in Hebrew, is yet another byproduct of the growing friendship between the Indian and Israeli nations and a reflection of the deep resonance of arts and culture that our nations share.
  • Israel’s President made a rare appearance at an exhibition here featuring Indian deities and temple rituals.
  • India and Israel are “natural allies” who are united by a fundamental commitment to the democratic ideals upon which they were founded
  • The display features 14 exquisite large-scale Indian sculptures created between the fourth and thirteenth centuries, some on loan from the National Museum in New Delhi and some from the Israel Museum’s collection.

India-Israel Relations

  • Diplomatic Relations:
    • India officially recognised Israel in 1950. Soon after, Israel established an immigration office in Bombay which was later converted into a Trade Office and subsequently a Consulate. 
    • However full diplomatic relations were established only in 1992 and Embassies were opened.
  • Economic and Commercial Relations:
    • The bilateral merchandise trade grew from USD 200 million in 1992 to USD 6.35 billion (excluding defence) during the period 2021-2022, with the balance of trade being in India’s favour.
    • India is Israel’s third-largest trade partner in Asia and seventh largest globally.
    • In recent years, bilateral trade has diversified into several sectors such as pharmaceuticals, agriculture, IT and telecom, and homeland security.
    • Israeli companies have been instrumental in transferring technology to India in areas like renewable energy, telecom, water technologies. Many of them have also set up R&D centers in India.
    • The Free Trade Agreement (FTA) between the two countries is also on cards.
  • Defence Cooperation:
    • India imports critical defence technologies from Israel. There are regular exchanges between the armed forces. 
    • There is cooperation on security issues, including a Joint Working Group on Counter-Terrorism. 
    • Indian armed forces use Israeli Phalcon AWACS (Airborne Warning And Control Systems), Heron drones and Barak anti-missile defence systems.
  • Cooperation in Agriculture:
    • A three year joint work program has been signed between the two countries in 2021 for development in agriculture cooperation.
    • It is aimed at establishing Centers of Excellence, intensifying value chains  and encouraging private investment.
    • India has benefited from Israeli expertise and technologies in horticulture mechanization, orchard and canopy management, micro- irrigation and post-harvest management.
    • Israeli drip irrigation technologies and products are now widely used in India. Some Israeli companies and experts are providing expertise to manage and improve dairy farming in India through their expertise in high milk yield. 
  • Science & Technology:
    • The two countries have established a Joint Committee on S&T, established under the S&T Cooperation Agreement signed in 1993. 
    • India-Israel Industrial R&D and Technological Innovation Fund (I4F) has been set up to secure cooperation between the Department of Science and Technology (DST), Government of India, and the Israel Innovation Authority, Government of Israel to promote, facilitate and support joint industrial R&D projects.
    • It will address the challenges in the agreed ‘Focus Sectors’. 
  • Energy:
    • Tamar and Levianthan gas fields off the coast of Israel were explored recently and India has been one of the first countries to bid for an exploration licence in order to extract and import natural gas from the fields.
    • India’s ONGC Videsh, Bharat PetroResources, Indian Oil and Oil India were awarded an exploration licence by the Israeli government, a clear sign of the ongoing diversification in ties between the two countries.

Way Ahead

  • P2P contact: Despite increasing bonhomie between the two states, the people to people contact still lacks. Increased citizens engagement will give further depth to the relations between the two countries.
  • Bigger trade volumes: Though the trade volumes between the two countries have been increasing year on year, still it’s much below its potential level. FTA should be executed soon and the trade basket must expand.
  • Striking balance: Though Israel comes across as a natural partner, India should also be concerned about the human rights issues in Palestine. So far, India has been able to balance its geostrategic needs and international morality.
  • China and Israel: Of late China’s engagement has been continuously growing with Israel primarily for the latter’s technology. India should be proactive in evolving its partnership with Israel from hereon.

Rising Remittances to India

In News

  • In a recent forecast, the World Bank (WB) stated that remittance to India is set to cross the $100-billion mark in 2022.

Key Findings

  • About: 
    • In its Migration and Development Brief, the World Bank has said India’s remittance will grow 12 percent from 7.5 percent last year, resulting in $100 billion flow as compared to $89.4 billion in 2021. 
  • Percentage of GDP:
    • Despite reaching a historic milestone at $100 billion and retaining its position as the top recipient of remittances globally, India’s remittance flows are expected to account for only 3 percent of its GDP in 2022.
  • Remittances flow to South Asia:
    • Led by strong performances in India and Nepal, the WB has predicted that this year will grow 3.5 percent to reach $163 billion in 2022. 
    • The overall remittance growth in South Asia reflects a disparity in individual country results
    • While India has gained 12 percent and Nepal 4 percent, other countries have reported an aggregate decline of 10 percent.
    • The report also says that despite global challenges in 2022, remittances to low- and middle-income countries will grow by 5% to $626 billion.
    • Reason: This is, however, a slowdown from the 6.7 percent gain of 2021, reflecting the impact of an amalgam of external global shocks (inflation, slowing demand) in destination and source countries alike, as well as domestic factors.
  • Reason for this rise: 
    • The large share of Indian migrants earning relatively high salaries in the United States, United Kingdom and East Asia.
    • There’s been a gradual shift in destinations for Indian migrants.
      • Migrants moved from largely low-skipped, informal employment in the Gulf Cooperation Council (GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the United States, the United Kingdom, and East Asia (Singapore, Japan, Australia, New Zealand).
    • A structural shift in qualifications helped them move into the highest-income-earner-category, especially in services.
    • Higher education mapped onto high income levels with direct implications for remittance flows. 
    • During the Covid-19 pandemic, Indian migrants in high-income countries benefited from work-from-home and large fiscal stimulus packages.
      • As the pandemic eased, the wage hikes and “record-high employment conditions” helped migrants send money home despite high global inflation.
    • Despite Indian migrants in the Gulf Cooperation Council returning to India during the pandemic, price support policies kept inflation at bay and demand for labour increased with higher oil prices, which in turn increased remittances for Indian labourers.
    • Depreciation of the Indian rupee to the US dollar — it fell 10 percent between January and September 2022 — proved to be advantageous for Indian migrants and increased remittance flows.
    • In 2022, vaccinations and the resumption of travel helped migrants resume work, increasing remittance to the country.
  • Global remittance: What’s predicted in 2023:
    • The growth of remittance flows into South Asia in 2023 is expected to slow to 0.7 percent. 
    • The year will stand as a test for the resilience of remittances from white-collar South Asian migrants in high-income countries.
    • Remittance flows in India, specifically, are predicted to decrease due to inflation and an economic slowdown in the United States. 
    • Decline in economic growth in the GCC coupled with a fall in oil prices will further pull remittance flows down to all South Asian countries, the report states.


  • Definition: 
    • The sum of worker’s remittances, compensation of employees, and migrants’ transfers as recorded in the IMF Balance of Payments. Workers remittances are current transfers by migrants who are considered residents in the source.
    • Remittances are a vital source of household income for low- and middle-income countries.


  • Money sent home by migrants is one of the largest financial inflows to developing countries.
  • Workers’ remittances are a significant part of international capital flows, especially with regard to labour-exporting countries.
  • Remittances can provide the receiving countries with much-needed foreign exchange.
  • Remittances are a more stable and reliable form of foreign earnings in many developing countries in comparison to FDI or international aid.
  • It helps in alleviating the Balance-Of-Payments (BOP) and the debt crisis of such countries.
  • Remittances are a stabilising factor for national currencies of developing countries.
  • Remittances are helping to meet families’ increased need for livelihood support.
  • As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable.

Way Ahead

  • Growing significance of remittances as a source of external financing for low- and middle-income countries, there is a need for better collection of data on remittances, in terms of frequency, and timely reporting.
  • Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants.
  • The World Bank is assisting member states in monitoring the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows.
    • It is working with the G20 countries and the global community to reduce remittance costs and improve financial inclusion for the poor.


In News

  • mysterious and intensely bright flash of light coming from halfway across the universe earlier this year had stunned astronomers worldwide.

Key Findings

  • The source of the intense beam has now been identified — a supermassive black hole ripping apart a star, pointing directly at Earth. 
  • The jet of light was brighter than 1,000 trillion suns
  • Scientists from multiple institutions, including India, helped trace the activity powered by the black hole, 8.5 billion light years away from Earth. 

About Black Holes

  • A black hole is a place in space where gravity pulls so much that even light cannot escape
  • The gravity is so strong because matter has been squeezed into a tiny space. This can happen when a star is dying.
  • How Do Black Holes Form:
    • Scientists think the smallest black holes formed when the universe began.
    • Stellar black holes are made when the center of a very big star falls in upon itself or collapses. When this happens, it causes a supernova. A supernova is an exploding star that blasts part of the star into space.
    • Scientists think supermassive black holes were made at the same time as the galaxy they are in.
  • Visibility: 
    • Because no light can get out, they are invisible. 
    • Space telescopes with special tools can help find black holes. 
    • The gases swirling around actually help in getting their images.
  • Size:
    • Black holes can be big or small. 
    • Scientists think the smallest black holes are as small as just one atom. These black holes are very tiny but have the mass of a large mountain. 
    • Another kind of black hole is called “stellar.” Its mass can be up to 20 times more than the mass of the sun. 
    • The largest black holes are called ‘supermassive’ and they have masses that are more than 1 million suns together. 
  • SgrA*:
    • The supermassive black hole at the center of the Milky Way galaxy is called Sagittarius A.
    • It has a mass equal to about 4 million suns and would fit inside a very large ball that could hold a few million Earths.

International Day of Persons with Disabilities

In News

  • President to conferred National Awards for outstanding work towards empowerment of persons with disabilities on International Day of Persons with Disabilities on 3rd December.

About International Day of Persons with Disabilities

  • The annual observance of the International Day of Disabled Persons was proclaimed in 1992, by the United Nations General Assembly resolution 47/3.
  • The observance of the Day aims to promote an understanding of disability issues and mobilize support for the dignity, rights and well-being of persons with disabilities.
  •  It also seeks to increase awareness of gains to be derived from the integration of persons with disabilities in every aspect of political, social, economic and cultural life.


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