Netherland-3rd largest Export Destination, World First EV Battery Passport, Variable Rate Reverse Repo

• According to the Commerce Ministry data, the Netherlands has emerged as India’s third largest export destination after the U.S. and UAE during 2023-24.
• Even though, India’s merchandise exports contracted by 3.1% in 2023-24
• The main commodities that registered healthy export growth in the Netherlands include petroleum products ($14.29 billion), electrical goods, chemicals, and pharmaceuticals in the last fiscal.
• India’s trade surplus with the Netherlands rose to $17.4 billion in FY24 from $13 billion in FY23.

Dig Deeper: Which are the top export items of India in the financial year 2023-24?

• SEBI has formed an ad-hoc committee under Usha Thorat to review the ownership and economic structure of clearing corporations and suggest measures to ensure the corporations function as resilient, independent and neutral risk managers.
• The 2018 report of the committee on the review of regulations and relevant circulars about Market Infrastructure institutions (MIIs), headed by R. Gandhi (referred to as Gandhi Committee).
• It noted ownership of MIIs should be dispersed and widely held.
• It highlighted that most clearing corporations in India were 100% owned by a single exchange, given such corporations are risk-bearing MIIs, they should be widely held.
• Listing of clearing corporations should not be permitted being sensitive and high risk-bearing and risk-managing entities.
• There should be no stipulation on the quantum of profit to be made by MIIs but monitoring of reasonableness of the charges levied by MIIs should be preferred.
• Given the novation function of the clearing corporations,

Issues in functioning as an Independent Risk Manager

• As all clearing corporations under the regulatory purview of SEBI are subsidiaries of their parent exchanges.
• The dominance in ownership exposes them to the expectations of shareholders of the parent exchange.
• They are dependent for capital infusion and augmentation of reserves, including for any shortfall in the corpus of the settle guarantee fund.
• Infusion of capital in a clearing corporation by a parent exchange might be at odds with the economic interest of an exchange shareholder.

• Investment is needed towards enhancing capabilities in technology and human and regulatory resources.
• As public utilities make reasonable profits to sustain their operations, to ensure market stability.
• With a substantial rise in trading volumes particularly in the derivatives segment, need to augment their settlement guarantee funds.

Dig Deeper: Read about the Clearing Corporations of India and their parent exchanges.  

• Volvo Cars is launching the world’s first EV battery passport recording the origins of raw materials, components, recycled content and carbon footprint for its flagship EX90 SUV, which is about to start production, the Swedish automaker told Reuters.
• The passport was developed by Volvo, owned by China’s Geely, in partnership with U.K. start-up Circulor which uses blockchain to map supply chains for companies.
• Battery passports will be mandatory for EVs sold in the EU from February 2027.
• Volvo owners can access a simplified version of the passport using a QR code on the inside of the driver’s door.

EV Battery Passport

• The battery passport is a digital record linked to each vehicle’s unique identification number and accessible via a QR code. 
• The passport will contain up to 90 distinct pieces of information categorized into seven key areas: general battery and manufacturer information, compliance and certifications, battery carbon footprint, supply chain due diligence, materials and composition, circularity and resource efficiency, and performance and durability​​.
• This comprehensive data set will provide unprecedented insight into the environmental impact and ethical implications of battery production, addressing growing concerns about the sourcing of critical raw materials like cobalt, lithium, nickel, and manganese. 

Dig Deeper: Checkwhether environmental and social impact assessment is compulsory for renewable energy plants in India. Coal-based power in the overall energy basket of India.

• The Reserve Bank of India (RBI) absorbed surplus liquidity aggregating ₹44,430 crore through two variable Rate Reverse Repo (VRRR) auctions of three days tenor.
• The objective of establishing VRRR auction as the liquidity management tool is to strengthen the Reserve Bank’s control over liquidity.
• The RBI pays interest to the banks for lending money to it. The interest rate is determined by the market forces of demand and supply of liquidity.
• On the first 3 days VRRR auction, the central bank accepted the funds at a weighted average rate (WAR) of 6.48%. In the second VRRR auction at a WAR of 6.49%.
• Liquidity surplus with banks was mainly on account of month-end government spending.
• RBI’s dividend pay-out announcement (of ₹2.1-lakh crore) in end-May and the post-election pent-up spending by the government, should bode well for banking system liquidity.

Rebalancing surplus liquidity

• The Reserve Bank has been rebalancing the liquidity surplus by shifting it from the fixed rate overnight reverse repo window to the variable rate reverse repo (VRRR) auctions of longer maturity.
• The banks can bid for the amount and the rate at which they are willing to lend money to the RBI.
• The RBI decides the cut-off rate and the amount based on the bids received, banks can not bid at or below the repo rate.
• The banks that have placed their bids at or above the cut-off rate are allotted funds.

Dig Deeper: Read about RBI’s various tools to manage liquidity.

• Researchers at Columbia University suggested that when the bacteria Klebsiella pneumoniae is infected by bacteriophages (viruses that infect bacteria) they use a non-coding RNA with specific motifs (or structures) that could bind to reverse transcriptase and instruct cells to create DNA.
• This DNA copy has multiple copies of a gene that can create a specific protein.
• The researchers dubbed this protein ‘Neo’ for a “never-ending open-reading frame”.
• It could place the bacterial cell in a state of suspended animation, blocking its replication, and thus stalling the replication of the invading bacteriophage as well. Thus, the infection is stopped in its tracks.
• Recent discoveries including the role of reverse transcriptase in bacterial defence against bacteriophages hint at the potential of innovative applications in biotechnology and medicine.

Reverse Transcriptase

• Reverse transcriptase (RT), also known as RNA-dependent DNA polymerase, is a DNA polymerase enzyme that transcribes single-stranded RNA into DNA
• The enzyme reverse transcriptase became crucial for detecting the SARS-CoV-2 virus, forming a cornerstone of molecular diagnostics.
• Reverse transcriptase challenged the central dogma of molecular biology by showing RNA could create DNA.
• Reverse transcriptases shaped the human genome by inserting retroelements, which recent studies suggest play roles in physiological processes and neuropsychiatric diseases.
• This underscores the enzyme’s fundamental role in both prokaryotic and eukaryotic systems.

Dig Deeper: What are the retroelements in the Human genome?