2 June 2025

• Aviation: PM Modi addressed the IATA World Air Transport Summit at Bharat Mandapam on Day 2 of the 81st AGM.
• Finance: RBI released draft guidelines for gold loans, capping loan-to-value at 75 per cent and restricting collateral to jewellery and bank-issued coins.
• Diplomacy: Paraguay President Santiago Peña Palacios began a state visit to India (2-4 June), only the second-ever visit by a Paraguayan head of state.
• Urban planning: India's cities face a structural stormwater drainage crisis, with Delhi's drainage system designed to handle rainfall levels from 1976 norms.
• Geography: Nigeria's Alau dam collapse in Mokwa, Niger State, left over 150 dead from flooding.

GS area: Economy (Banking regulation, Financial sector)

The Reserve Bank of India released draft guidelines to reform the gold loan market. The move follows a rise in non-performing assets in this segment.

• NPAs in gold loans: stood at Rs 2,040 crore for banks and Rs 4,784 crore for non-banking financial companies at the time of the draft release.
• Loan-to-Value (LTV) cap: set at 75 per cent of the assessed value of the gold pledged. LTV is the ratio of the loan amount to the market value of the collateral.
• Permitted collateral: only gold jewellery and coins issued by banks. Other forms of gold (bars, coins from non-bank sources) are excluded.
• Valuation basis: assessed at 22-carat equivalent. The price used is the lower of the 30-day average or the previous day's price, preventing artificial inflation of collateral value.
• Borrower limits: maximum 1 kg of gold or 50 gm in coins per borrower from a single lender.
• Tenure: consumption loans capped at 12 months. Business loans evaluated on cash flow.
• Return obligation: if a lender fails to return gold within 7 working days of loan closure, a compensation of Rs 5,000 per day applies.
• Reason for regulation: gold loans grew rapidly as NBFCs offered easy access. Lax valuation and multiple loans against the same collateral across lenders inflated risk.

Static linkage: Indian economy (banking regulation, RBI functions).

GS area: Governance, Disaster Management, Environment

India's major cities face a structural crisis in stormwater infrastructure, made visible every monsoon.

• Mumbai: drainage system built in the 1860s handles only 25 mm of rainfall per hour. The city has recorded over 100 mm per hour during intense monsoon events. Mumbai has lost 80 per cent of its natural water bodies over 40 years to encroachment and construction.
• Delhi: drainage standards are based on 1976 norms set for 50 mm of rainfall per day. In May 2025 Delhi recorded 185.9 mm in a single day.
• Bengaluru: 65 per cent of its formerly interlinked lakes have been encroached. The stormwater drains are easily overwhelmed.
• Government frameworks: the Manual on Stormwater Drainage Systems (2019), AMRUT 2.0, and the Amrit Sarovar Mission address aspects of urban water management but implementation varies widely across cities.
• Model Building Bye-Laws (2016): require rainwater harvesting structures in new buildings above a threshold plot size.
• Jal Shakti Abhiyan: a campaign for water conservation and groundwater recharge across India.
• The structural problem: urbanisation converts permeable land into impervious surfaces. Rainfall that once soaked into the ground now rushes to drains. Old colonial-era drains in major cities were never designed for current population density or rainfall intensity.

Static linkage: Disaster management (urban floods), Governance (urban planning).

GS area: Economy (Aviation, Infrastructure)

PM Modi spoke at the plenary session of the World Air Transport Summit on Day 2 of the IATA AGM at Bharat Mandapam.

• India's aviation market: the third-largest domestic aviation market in the world. India is also emerging as a leader in what PM Modi described as space-aviation convergence.
• UDAN impact: over 15 million passengers have used UDAN routes since the scheme's launch. UDAN (Ude Desh ka Aam Nagrik) is a regional connectivity scheme that subsidises routes to underserved airports.
• Manufacturing ambition: India seeks investment in aircraft maintenance, repair and overhaul (MRO), and in aircraft component manufacturing under Make in India.
• Host: IndiGo airline was the domestic host of the event.
• Frequency of India hosting: 1983 was the last time India hosted the IATA AGM. The 2025 edition brought 1,600 participants.

Static linkage: Indian economy (infrastructure, transport).

GS area: International Relations, Geography

Paraguay's President Santiago Peña Palacios visited India from 2 to 4 June 2025. This was his first state visit to India and only the second-ever visit by a Paraguayan head of state.

• Capital: Asunción.
• Location: landlocked country in south-central South America. Bordered by Bolivia to the northwest, Brazil to the east and northeast, and Argentina to the south and southwest.
• Key rivers: the Paraguay River divides the country into the Chaco region (west) and the Paranaense region (east). The Paraná River forms the eastern border. The Pilcomayo River forms part of the Argentine border.
• Economy: Paraguay is a major hydroelectricity exporter. The Itaipu Dam on the Paraná River (shared with Brazil) is one of the world's largest hydroelectric dams.
• Bilateral agenda: trade, technology, and diplomatic cooperation. Paraguay recognises Taiwan rather than the People's Republic of China, which is a distinctive element in its foreign relations.

Static linkage: World geography (South America), International Relations (bilateral).

• Ahilyabai Holkar 300th anniversary: commemorations continued across India on 2 June. Lokmata Ahilyabai Holkar (1725-1795) ruled the Malwa kingdom from her capital at Maheshwar. She is known for temple construction, weaver patronage and the Maheshwari saree tradition.
• ADB loan withdrawal: the Asian Development Bank withdrew a $434.25 million loan for Assam's Karbi Anglong Solar Power Park after indigenous community protests over land acquisition. ADB headquarters is in Metro Manila, Philippines.
• IATA facts: IATA was established in April 1945, Havana, Cuba. Headquarters in Montreal, Canada. Represents 317 airlines from 120-plus countries, covering about 82 per cent of world air traffic.