 A very good morning friends. I welcome you all to the Shankar summary 2024. Today we are going to see second part of our economics compilation video. Here are the list of articles which we are going to discuss today. Let us get started. Let us look at this quiz question. This quiz question is talking about fully accessible route mechanism for investment. Before answering, let us see in a brief about fully accessible route to get concepts clear. Reserve Bank of India RBI has introduced a separate channel of investment called fully accessible route in 2020. See, it enables the non-resident Indians, NRIs, to invest in specified government bonds. An important point to be noted here is that the eligible investors can invest in specified government securities without being subjected to any kind of investment ceilings. See, the scheme will operate along with the two existing routes of FBI like a medium term framework and voluntary retention route. See, this is the basic of our FAR. In our discussion, now let us see some facts about voluntary retention mechanism to have a clear picture of these things. See, VRR, our voluntary retention route is another scheme introduced by RBI to encourage the foreign portfolio investors for long term investments in the Indian debt markets. See, it provides operational flexibility and exemptions from certain regulatory requirements. Moreover, this route requires a retention period of over 3 years with the FBI maintaining a minimum of 75 percentage of allotted amount in India. See, the investment levels are available on tap and allotted by clearing corporation of India limited CCIL on a first come first serve basis. See, this is the base points about voluntary retention routes. So, with this basic idea, now let us go back and solve this question. See the first statement, eligible NRIs can invest in specified government securities without subjected to any kind of investment ceilings. See, this is correct as we have seen in our discussion about FAR. See the second statement, it operates alongside with two existing routes of MTF and VRR. See, this is also correct as we have seen in our discussion. So, both the statements are correct. So, the correct option is option C. Let us move on to solve the next MCQ. Look at this question. This question talks about a concept called safe harbor which was recently seen in the news. Before solving, let us see in a brief about what is safe harbor is. Firstly, safe harbor is a protection available under section 79 of the IT Act 2000. See, it is a legal immunity that online intermediaries like Insta, FB, X enjoy against the contents which are being posted on it by the users. Know that this protection is available as long as these platforms abide by the rules certain due diligence requirements such as censoring content when asked by the government or courts. See, this concept originally came from section 230 of the United States Communications Decency Act which has been termed as one of the foundational laws behind the modern internet. Okay, now we should know why this concept has flared up in the recent news. See, Digital India Act 2023 which was a policy to replace the IT Act 2000 reviews this safe harbor principle. See, as we have seen now, this is the principle which primarily shields the online platforms from the liability related to user generated content. With this removal, this can be counterproductive to the fundamental rights of expression. So, with this basics, let us go back and solve the question. See, the term safe harbor which was seen in the news is associated with, see out of four options, we know that the correct option is option A online content. See, with this basics, let us move on to the next MCQ. See, this MCQ is about the non-banking financial companies or NBFC. As we know that this is an important concept which can be asked again and again in the exam. So, in this context in our discussion today, let us see some important points about NBFC and we shall see the concepts and then we shall come again and solve this question. Okay, let us start our discussion. Non-banking financial companies or NBFCs are financial institutions that provides banking services but know that they do not hold a full banking license. In India, for example, they are registered under Companies Act 1956 whereas a commercial bank will obtain license for commercial banking business under section 22 of the Banking Regulation Act 1949. Moving on our discussion, NBFCs are regulated by variety of organizations like NBFCs like investments and credit companies, core investment companies, infrastructure finance companies are regulated by RBI. On the other hand, NBFCs like housing finance companies are regulated by National Housing Bank. Moreover, Merchant Banker Venture Capital Funds companies are regulated by SEBI. Fourthly, Insurance companies are regulated by IRDAI and fifthly, Chid fund companies are regulated by their respective state governments and finally, NIDI companies are regulated by Ministry of Corporate Affairs Government of India. See, this is why I mentioned that NBFCs are regulated by various types of organization depends upon the target group whom they work for. Okay, moving forward, let us see how NBFCs are different from banks. See, the first major difference is in relation to the demand deposits. See, while banks can accept demand deposits, NBFCs cannot accept it. Here, demand deposits are nothing but savings account. The second difference is NBFCs do not form part of the payment and settlement system while we know that banks are of course a part of the system. Thirdly, NBFCs cannot issue checkbooks. Then NBFCs cannot offer money transfer services like the traditional banks. The moving on, the next major difference is that NBFCs do not have to maintain any reserve ratio such as cash reserve ratio, statutory liquidity ratio while banks must mandatory maintain these reserve ratios. Also, NBFCs cannot provide deposit insurance facilities which are offered by the Deposit Insurance and Credit Guarantee Corporation. What does it means? It means deposit insurance is a protection mechanism provided by the government to safeguard depositors' money which is held in the banks. It assures the depositors that their funds up to a certain limit will be reimbursed even if the bank fails. In India, NBFCs cannot provide deposit insurance. So, if you deposit money in NBFC and if that NBFC becomes insolvent, then the money deposited with NBFC will be completely lost. See, there are some of the differences between the bank and NBFCs with this broad basics. Now, let us go back and solve the question. See the first statement. It says that NBFCs cannot engage in acquisition of the securities which are issued by the government. See, the statement is incorrect because NBFCs will be primarily engaged in the business of loans and advances, acquisitions of the shares, stock, bonds, debentures, etc. So, the statement one is incorrect. See, the second one. NBFCs cannot accept demand deposits like the savings account. See, of course, this is correct because we have seen in our discussion. So, the statement one alone is incorrect. So, the correct option is option B. See, the basic, let us move on to the next MCQ. Let us look at this MCQ. It talks about Financial Action Task Force or FATF. Before solving this question, we ought to know why this has appeared in the news. See, FATF or Financial Action Task Force has recently removed the Cayman Island from the gray list. See, this may lead to positive FTA flow from this region in the near future to India. See, this is the context on which the question appeared. See this question. Now, we shall discuss the basics about FATF before we are going to solve the question. So, firstly, what is Financial Action Task Force or FATF? See, FATF is an intergovernmental body established in 1989 during the G7 summit in Paris. The objective of the body is to set the standards and promote effective implementation of the legal, regulatory and operational measures for combating money laundering, terror financing and other related issues that will threat the integrity of the international financial system. See, its secretariat is located at the OECD headquarters in Paris. Note that FATF also added terror financing as the main area of focus. See, this was done after the 9-11 terror attack of the US. Then later, the focus was broadened to include restricting the funding of the weapons of mass destruction. Now, moving on a discussion, see, FATF includes 39 countries including US, India, China, Saudi Arabia, Britain, German, etc. Know an important point that India became a member of FATF in 2010. Note that the FATF plenary is the decision-making body of the FATF. It meets three times per year. Now, let us see the two types of lists of FATF. Firstly, grey list. See, officially it is termed as jurisdiction under increased monitoring. See, the countries that are considered safe haven for supporting the terror financing and money laundering are put in the FATF grey list. See, this inclusion serves as a warning to the country that it may enter blacklist. Secondly, blacklist. See, it is called a high-risk jurisdiction subject to call for action. See, these blacklist countries are often termed as non-cooperative countries or territories or NCCT. Know that these countries support terror funding and money laundering activities. FATF revives the blacklist regularly adding or deleting the entities. Know that currently North Korea, Iran, Myanmar are in the blacklist. Now, let us see what are the consequences of being put in the blacklist? See, firstly, no financial aid will be given to them by the IMF, World Bank, ADB or EU. Secondly, they also face a number of international economic and financial restrictions and sanctions. See, this is the basic about the FATF. Now, let us solve the question. See the first one. India is a member of the tax force. See, this is correct. As you have seen that, India became a member in 2010. So, the statement one is correct. See the second one. The mandate of the group is to deal with the money laundering only. See, this is wrong because we saw that the mandate of the group varies from money laundering to terror financing to weapons of mass destruction etc. So, the statement is wrong. Third one is, non-cooperative territories are placed under a great list of FATF. See, this is wrong because the technical name of blacklist is called non-cooperative territories. So, the third statement is also wrong. So, the correct option is option A. With these basics, now let us move on to the next MCQ. Look at the MCQ. It talks about an economic concept called evergreening. Okay, before solving the MCQ, we shall see about the concept of evergreening. See, the term evergreening of loan refers to a banking practice in which the bank attempts to sustain a loan which is on the brink of default by providing further loans to the same default borrower. See, it is a temporary fix that generally obscures the true condition of stressed loans and delays the recognition of the losses by the banks. See, the objective is to prevent the loans from being classified as non-performing asserts and to minimize the impact on the profitability of the banks and provisioning requirements. Simple. See, it refers to a specific types of loan where the principal payment is deferred and typically only the interest is expected to pay until the end of loan term. See, the setup allows for the indefinite postponement of the principal and operates similar to the revolving credit. Okay, now let us see the reasons for adopting this practice. Firstly, impact on the profitability. See, banks need to make higher provisions if an account turns to an NPA. As we know that NPA will significantly impact their profitability. Secondly, avoiding NPA classification. See, banks resort to evergreening to avoid classifying them as the NPA thereby delaying the recognition of losses. Thirdly, liquidity and provisioning. See, evergreening allows the banks to avoid provisioning to cover loan losses and help them to maintain liquidity. Okay. With this, let us see what are the methods of evergreening. Firstly, inter-bank arrangements. See, banks collaborate to evergreen each other's loan through sale and buyback of the loans or debt instruments. Secondly, structured deals. See, it will encourage sound borrowers to engage in the structured deal with the stressed borrowers to conceal the stress. Thirdly, internal adjustments. It involves the use of internal or office account to adjust the borrowers' repayments obligation. Fourthly, renewable loans. See, renewing the loan or dispersing the newer additional loans to the stressed borrowers are related entities which are closer to the repayment date of the earlier loans. See, with this basics about evergreening, now let us solve the question. The term evergreening makes news repeatedly in the recent past, which are the following, but I defends it. See, out of the four options, option B, a banking practice to deal with a bad loan fits the correct definition of evergreening. So, the correct option is option B. So, with this basics, let us move on to the next MCQ of the day. Look at this MCQ. It lists four types of funds and it asks us how many of them will fit into the definition of Alternative Investment Fund. Before answering this, we have to be aware about the basics of Alternate Investment Fund, AIF. Let us start our discussion. See, AIF or Alternative Investment Funds or the Special Investment category funds which are very different from the conventional investment instruments know that any AIF has two characteristics. They are the funds which are established in India and secondly, they are the privately pulled instrument vehicle which collects funds from the sophisticated investors who are both from foreign or Indian for investing. See, it pulls funds from the investors and invest them under different category of investments as specified by SEBI for the benefit of borrowers. Know that this investment vehicle must adhere to the regulations of the SEBI under SEBI Alternative Investment Fund regulations 2012. We should know that the various forms of AIF are venture capitalists, infra funds, limited liability partnership, trust, etc. Now, moving on our discussion, we shall see about three categories of the AIFs. Category 1, see, this kind of investments can invest in startups, yearly stage ventures, social ventures, SMEs and sectors in which the government or regulators consider us socially or economically desirable. See, it includes the venture capital funds like angel funds, SME funds, social venture funds, etc. Secondly, category 2, Alternative Investment Funds. Here, these are the funds which are not classified either under category 1 or under category 3. See, they do not undertake leverages or borrowing other than to meet the day-to-day operational requirements and as permitted in the regulations. Thirdly, we should know that the various types of funds are real estate fund, debt fund, private equity fund, funds for the distrust assets, etc. And finally, category 3 AIFs. See, these are the funds which employ complex or diversive traditional diverse trading strategies and may employ leverages including the investments in the listed or unlisted hedge funds, pipe funds, etc. We should know the basics that category 1 and 2 are closed ended funds and having a minimum tenure of 3 years whereas the category 3 can be either open ended or closed ended funds. Here, we should know the basic about them, right? Open ended funds can be brought or sold anytime whereas the closed ended funds can be brought only during the launch and can be redeemed only when the investment tenure is over. See, with this broad basics, let us go back and solve the MCQ related to AIF. See, out of these four funds which are listed, all four of them will fit into the definition of alternative investment funds. So, the correct option is option D. With this basics, now let us move on to the next MCQ of the day. Look at this MCQ. This MCQ is about the statements regarding credit information companies. See, the news about credit information companies often appeared in the newspaper. So, it is very important from our example's perspective. See, here two statements are given. First, we are going to see about the basics of CIC before answering this. Let us start our discussion. Firstly, credit rating agencies or CRA is a company that assigns credit ratings which rate debtor's ability to pay back the debt by making the timely principal and interest. See, they collect public data, credit transaction, payment history of the individuals and companies regarding the loan credit card etc. Note that the primary function is to gather the data from the various sources like bank, lenders, financial institutions and other rating agencies etc. See, then the CICs will compile this data and make a credit report. Okay, now with this basics, let us see the benefits of CIC. Firstly, banks, NBFCs refers to the CIC reports and scores to decides the credit worthiness of the borrowers before granting a loan or issuing a credit card. Secondly, an important point to be noted is that CICs in India are licensed by RBI and governed by credit information companies Regulation Act 2005 or CICRA and they will be often regulated by the various rules and regulations issued by the RBI. See, as per section 15 of this CICRA Act, every credit institutions like banks should be a member of at least one CIC. Moreover, CICRA acts to place that a CIC may seek and apply information from its members only. Okay, now at present, four CICs are given third week of registration by the RBI. They are Credit Information Bureau India Limited, SIBL, Equifax Credit Information Services Private Limited, Xperian Credit Information Company of India Private Limited and CRI of High Market Credit Information Services Private Limited. So, with this basics, let us now see the question. First thing, they collect the credit history of both the individuals and companies to create credit report. See, this statement is correct because as we have seen in our discussion. Secondly, know that CICs are regulated by the Reserve Bank of India. See, this is also correct and guys, I am giving an extra data that credit rating agencies which is very different from CIC, credit rating agencies are regulated by SEBI. Okay, so here both the statements are correct. So, with this basics, let us move on to the next MCQ of the day. Look at this question. It is about the concept called base erosion and profit sharing. It says that which of the following better describes the BEPS. Okay, now before answering this question, let us look at a concept which is very much related to BEPS which is called double taxation avoidance agreement or DTA. Okay, let us start our discussion. See, DTA is a treaty signed between two or more countries. The key objective of DTA is that the taxpayers in these countries can avoid being taxed twice for the same income which is generated by them. Know that it is applicable in the cases where a taxpayer residing in one country A and earn his income from other country B. Now moving on in our discussion, know that India establishes DTA with other countries through section 90 of the IT Act 1961. Presently, India has DTA with more than 80 countries. See, it is legislated on a reciprocal basis and covers residents of India as well as residents of the negotiating country. Here, you should know about an important point that an individual or a corporation, not a resident of India or the country with which India signed DTA cannot climb benefits under the DTA. Moving on our discussion, DTA can either cover all types of income or it can also target a specific type of income depending upon the types of businesses or holdings etc. Okay, now the following categories are generally covered under a double taxation avoidance agreement. They are services, salary, property, capital gains, savings or fixed deposit accounts. So, with this basics, now let us see the question. Here, DPS is very much related to the tax avoidance strategy. Let us option B. So, this basic points, let us move on to the next MCQ. Look at this MCQ. This MCQ is about the statements with reference to minimum support price or MSP. See, questions about MSP will often ask in the UPSC preliminary examinations. So, it is in our best interest to know inside out about MSP. Okay, now let us start our discussion. See, in the slides I have attached it to recent previous question based on MSP for your understanding. Please have a look at them. Now, let us see about MSP from exam perspective. Firstly, what is minimum support price or MSP? See, MSP is a form of market intervention by the government of India. It is the price at which the government purchases the crop from the farmers. Know that by doing so, it will protect the farmers against any sharp fall in the prices. Moreover, MSP is announced by the central government at the beginning of every sowing season. To be more precise, MSP is approved by Cabinet Committee of Economic Affairs, chaired by the Prime Minister on the basis of the recommendation by Commission for the Agricultural Cost and Price or CACP. Now, I am displaying the determinants of MSP for your reference. Please have a look at them. Now, let us see the objectives of MSP. See, in simple words, it is the price fixed by the government of India to protect the farmers against excessive fall in prices during the bumper production years. On the other hand, during any drought season, it will provide a guarantee price for the produce. Thirdly, it will ensure food security in the country as the crops procured under MSP is used for PDS system. See, this is all about the objectives. Now, let us see the crops which are covered under MSP. See, government announces MSP for 20 to mandated crops and FRP for sugarcane. See, among the 22 crops, 14 belong to cariff season, 6 belong to robby season and 2 belong to commercial crops. Here, I am displaying a list of crops for your reference. So, please memorize them often, as it is directly asked in the preliminary. So, with these basic points, let us move on to solving the question. Here, the first statement states that MSP is fixed by the government on the basis of the recommendations of the CACP. See, we know that it is correct. See, the second statement, the Rangarajan committee recommended that the MSP should be at least 50% more than the varied average. See, this statement is wrong because this recommendation is given by Swaminathan commission, not Rangarajan commission. See, the third statement, in India, MSP is applicable to 20 to cariff, robby and commercial crops including sugarcane. See, this is wrong because we know that sugarcane is given a separate price called FRP, which is very different from MSP. So, eliminating 2 and 3, the correct option is option A. So, this basics, let us move on to the next MCQ. Look at this MCQ. It talks about the lending instruments of the IMF. Like other questions, before answering, let us get into the basics of the various lending instruments of the International Monetary Fund. See, the first one is standby agreement. See, the standby agreement provides short-term financial assistance to the countries who are facing the balance of payment problems. Historically, it has been the IMF lending instrument most used by the advanced and emerging market countries. See, when a country receives funds via SBA, then that country must take measures to address the problems that led the country to seek funding in the first place. Moreover, SBA is provided in tranks and before each tranche is provided, the IMF reviews the country's policies. Recently, IMF provided bailout packages for the Pakistan is also provided under SBA facility. Now, the second one is standby credit facility or SCF. See, the SCF provides financial assistance to the low-income countries with short-term balance of payment needs. Note that it is one of the facilities provided under poverty reduction and growth trust PRGT of IMF. Note that both SBA and SCF are provided to avoid present prospective or potential balance of payment crisis. See, when the BOP crisis or balance of payment crisis extends for a protracted period, then the IMF provides support through extended fund facility or extended credit facility. See, both these facilities provide financial assistance to the countries which are facing serious medium-term BOP problems because of the structural weaknesses that requires time to address. To help countries implement the medium-term frameworks, these facilities offer longer program engagement, longer repayment period. See, the advanced and emerging economies are offered extended fund facility and the low-income countries are provided extended credit facility. Note that in 2019 Pakistan used the extended fund facility to get financial support from the IMF. I am moving on to our discussion. For urgent BOP needs, the IMF has rapid financing instrument facility and rapid credit facility. Here, note that this RCF or rapid credit facility appeared in 2022 preliminary question. Okay, now back to our discussion. See, both are designed to provide finding to the countries that are experiencing a sudden and unexpected BOP crisis. Here, the RFI is mainly used by the advanced and the emerging economies and RCF is mostly used by the low-income countries. The next one is short-term liquidity line or SLL. Here, the SLL is provided for IMF countries with very strong policy frameworks and fundamentals who face potential moderate short-term liquidity needs. See, these countries with strong policy frameworks fall into the BOP shocks due to external shocks. The SLL aims to minimize the risk of these shocks thereby avoiding the crisis to go into a deeper crisis and eventually spread into other countries. See, the next one is flexible credit line. See, the FCL is provided to the countries with very strong policy frameworks and track records in economic performance. Note that the financial support received under FCL is used to prevent the crisis from happening. Then comes the precautionary and liquidity line PLL. See, it is designed to meet the liquidity needs of the member countries with sound economic fundamentals but with some remaining vulnerabilities that preclude them from using the FCL facilities. To put it simply, basically countries with good economic fundamentals but not good enough to receiving funding via FCL will receive PLL facility. Finally, there is resilience and sustainability facility or RSF. See, it provides affordable long-term financing to the countries which are undertaking reforms to reduce the risks to prospective balance of payment stability including those related to climate change, pandemic preparedness, etc. See, these are all the various lending instruments of the IMF. So, to back to our discussion, see here out of these three statements, see the first one and second one, these two are correct because just now we have seen it in our discussion. Now, regarding the third statement, see India has received packages from IMF via both SBA and EAF and EFF. See, in 1981, India received EFF fund and between 1957 to 1991, India received SBA fund. Here, the correct option is option C. With this basic understanding, let us move on to the next MCQ of the day. Look at this MCQ. It talks about the institution called National Company Lord Tribunal. See, it often appeared in the news. So, the various composition and functioning of the NCLT is very important for the examination perspective. Before answering, let us go and brush up our fundamentals regarding NCLT. See, firstly, NCLT, National Company Lord Tribunal was constituted in 2016 under the Companies Act 2013. See, it is a statutory body which means created by the parliamentary law. Know that it was formed to deal with the corporate disputes that are of civil nature. This means NCLT works on the line of normal civil court in the country. But the difference is, they are constituted specifically to deal with the civil corporate disputes which are arising out of Companies Act 2013. Note that NCLT decides the matters in accordance with the principles of natural justice. Since it is performing judicial functions, it is also called a quasi-judicial authority. Now, let us see the benches of NCLT. See, it has a principle bench at New Delhi. Apart from this, it also has benches at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Gauhati, Hyderabad, Kolkatta and Mumbai. See, with this basics, now let us see the composition of the body. See, it consists of a president and some other judicial and technical members. The president of the tribunal will be appointed by the central government after consultation with Chief Justice of India. Note that the president of the NCLT must be a judge of high court or he has been a judge of the high court for five years. Now, coming to the members, the members of the tribunal are appointed by the central government based on the recommendation of the selection committee. See, this is all about the composition. Now, finally, let us see the functions of NCLT. Firstly, NCLT adjudicates the cases related to insolvency and liquidation of the corporate companies. See, this role to NCLT is mandatory under insolvency and bankruptcy code 2016. Here, note that the NCLT deals with the insolvency of only corporates under the code. But in the case of the insolvency of the individuals and partnerships, it will be dealt by debt recovery tribunal. Secondly, NCLT deals with the cases pending under Sick Industries Company Special Provisions Act 1985. See, it was enacted to detect the unbearable companies or sick companies that has potential systematic financial risk. So, if any cases are filed under such an act, it will be subsequently dealt by NCLT. Finally, NCLT plays a crucial role in facilitating the mergers and acquisitions. When two or more companies wish to merge, they must seek the approval of the NCLT. See, the tribunal examines the proposal and ensures that it is complied with the relevant law and regulations. If the merger is approved, the NCLT oversees the process of integration and ensures that the interests of all stakeholders are being protected. Note that if anyone is aggrieved by the decisions of the NCLT, then they can make an appeal before NCLAT, that is National Company Law Appliate Tribunal. And all the decisions of the National Company Law Appliate Tribunal can be challenged to Supreme Court. See, this is all regarding the discussion. So, with these basics, now let us go back and solve the MCQ. Here, let us see the first statement. It says that NCLT deals with the corporate disputes that are of both civil and criminal nature. See, this statement is incorrect because we have known from our discussion that NCLT deals with the corporate civil disputes. Secondly, the decisions of the NCLT can be directly appealed before the Supreme Court. See, this is incorrect because for such appeals, NCLT has been created. The third one is, it deals with the insolvency cases of the corporate bodies under IBC. See, this statement is correct actually because as we have seen in our discussion. So, the correct option is option A. So, with these basics, let us move on to discuss next MCQ. Look at this MCQ. What is the purpose of setting up of small finance bank in India? See, we know that small finance banks, payment banks and the nuances between them are often asked in the preliminary. So, before answering, let us go and have a basic about them. Now, let us start our discussion. Firstly, let us see about payment banks. See, there are two kinds of banking license that are granted by the Reserve Bank of India, that is, universal banking license and differentiated banking license. Payment bank comes under differentiated banking license, since it cannot offer all the services that a commercial bank offers. Note that a payment bank cannot lend. It can take deposits up to 1 lakh per account. It can issue debit cards but not credit cards. Now, what is the main aim of payment banks? See, the major objective of the payment bank is to further the financial inclusion by providing small saving accounts and payment or remittance services to the migrant laborers, low income households, small businesses and other unorganized sectors. The other functions are the payment bank can work as a BC or banking correspondent of another bank. By doing so, they can distribute the simple financial products like mutual funds, insurance products, etc. Okay. Now, with this, let us see about small finance bank. See, small finance banks are a category of banks that are established to provide basic banking services and credit facilities to the underserved sections of the population. See, it includes small business owners, MSMEs, farmers and unorganized sector. The various examples of small finance banks are Ujjivan, Capital Small Finance Bank, Uttkars, etc. Now, let us see what are the aims of small finance banks. See, the objective is to provide financial inclusion to the segments which are often excluded from the traditional banking system. See, it helps them to have access to financial products like small loans, savings, insurance, etc. Now, let us see the regulation of small finance banks. Note that they are regulated by RBI. All norms and regulations of the RBI that are applicable to the commercial banks including the requirement of CRR, SLR maintenance are generally applicable to the small finance banks. Also, according to the RBI, if any small finance bank want to become a universal bank, it has to complete satisfactory track record of performance for a minimum period of five years. See, this is regarding the discussion. With this basic, now let us go and solve the MSQ. See, here it asked about the purpose of setting up of small finance bank. See, the first statement, to supply credit to the small business units. See, it is correct since we have seen in our discussion. Secondly, credit to small and marginal farmers also correct because just know we have seen. See, the third one, it increase the young entrepreneurs to set up business particularly in the rural areas. See, this may look correct but it is not the main aim of setting up of this SFB. So, the correct option is option A. See, this is all regarding the discussion. With this, we have come to the end of the video. If you like today's video, like, comment and share with your friends. For more updates regarding UPSC preparation, subscribe to Shankar IS Academy. Thank you.