Current Affairs Question - 30 November 2019

Explanation :

• The Defence Acquisition Council is Defence Ministry’s highest decision making body for capital acquisition proposals forwarded by the Indian armed forces.
• It was set up in 2001 as part of the post-Kargil reforms in defence sector.
• It has the power to approve any deviations in an acquisition, and recommends all big capital defence purchases for approval of the Cabinet committee on security (CCS) headed by Prime Minister.
• It also clears all acquisitions, which includes both imported and those produced indigenously or under a foreign license.

Objective

• To ensure expeditious procurement of the approved requirements of the Armed Forces, in terms of capabilities sought, and time frame prescribed, by optimally utilizing the allocated budgetary resources.

Functions

• in-principle approval of 15 Year Long-Term Integrated Perspective Plan for Defence Forces
• accord of Acceptance of Necessity to acquisition proposals
• categorization of the acquisition proposals relating to ‘Buy’, ‘Buy & Make’ and ‘Make’
• issues relating to Single vendor clearance
• decision regarding ‘offset’ provisions in respect of acquisition proposals above Rs. 300 crores
• decisions regarding Transfer of Technology under ‘Buy & Make’ category of acquisition proposals
• Field Trial evaluation.

Explanation :

• Shadow Banking refers to the practice of banking like activities performed by non-banking finance companies, which are not subject to strict regulation. However, these institutions function as intermediaries between the investors and the borrowers, providing credit and generating liquidity in the system.
• It includes money market funds, private equity funds, hedge funds, securitisation, securities lenders, and structured investment vehicles.
• The term “shadow bank” was coined by economist Paul McCulley in a 2007 speech at the annual financial symposium hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming.
• Unlike traditional banks, shadow banks do not take deposits. Instead, they rely on short-termfunding provided either by asset-backed commercial paper or by the repo market, in which borrowers offer collateral as security against a cash loan and then sell the security to a lender and agree to repurchase it at an agreed time in the future for an agreed price.