Self Regulatory Organisation for fintechs

GS Paper - 3 (Economy)

Reserve Bank of India (RBI) Governor Shaktikanta Das has asked fintech entities to form a Self-Regulatory Organisation (SRO). An SRO can help in establishing codes of conduct for its members that foster transparency, fair competition, and consumer protection. It can act as a watchdog and encourage members to adopt responsible and ethical practices. It can provide a link between the regulator and market participants through a less formal set-up.

What is an SRO?

• An SRO is a non-governmental organisation that sets and enforces rules and standards relating to the conduct of entities in the industry (members) with the aim of protecting the customer and promoting ethics, equality, and professionalism. SROs typically collaborate with all stakeholders in framing rules and regulations.
• Their self-regulatory processes are administered through impartial mechanisms such that members operate in a disciplined environment and accept penal actions by the SRO.
• An SRO is expected to address concerns beyond the narrow self-interests of the industry, such as to protect workers, customers or other participants in the ecosystem.
• Regulations, standards, and dispute resolution and enforcement by an SRO get legitimacy not just by mutual agreement of its members, but also by the efficiency with which self-regulation is perceived to be administered.
• Such regulations supplement, but do not replace, applicable laws or regulations, according to the Reserve Bank of India.

What is the need for an SRO?

• As regulators continue to contemplate, implement, and refine regulations for the orderly development of the fintech sector, SROs could play a pivotal role in the fintech industry by promoting responsible practices and maintaining ethical standards.
• There have been many instances where a few fintech players were involved in unethical practices such as charging exorbitant higher interest rates and harassment of borrowers for recovering loans.

What are the benefits of an SRO?

• SROs are widely considered experts in their fields and so have in-depth knowledge of the markets they operate in. This is helpful to their members as they can be called in to participate in deliberations and learn more about the nuances of the industry.
• Formation of SROs ensures member organisations follow a certain standard of conduct that helps promote ethical ways of doing business, which can lead to enhanced confidence in the ecosystem.
• They can serve as a watchdog to guard against unprofessional practices within an industry or profession.

What are the functions of an SRO?

• The recognised SRO will serve as a two-way communication channel between its members and the RBI.
• It will work towards establishing minimum benchmarks and standards and help instil professional and healthy market behaviour among its members.
• SROs will impart training to the staff of its members and others and will conduct awareness programmes. It will establish a uniform grievance redressal and dispute management framework across its members.

Supreme Court restores party symbol for Ladakh

GS Paper - 2 (Polity)

The Supreme Court on 6 September 2023 restored to the National Conference, its party symbol – the plough – after the Ladakh administration refused to allot the symbol to the party’s candidates for the upcoming election to the Ladakh Autonomous Hill Development Council (LAHDC) in Kargil. 

How did the matter of the symbol for NC candidates reach the courts?

• With the announcement of the LAHDC polls for Kargil, the election commissioner for the UT of Ladakh refused to allot the symbol of the plough to the NC.
• In its arguments against reserving the plough symbol for the NC, the Ladakh administration said that no state party, including the NC, is a recognised party in Ladakh, and that the NC could therefore not claim its plough symbol in the UT.
• However, the NC challenged this decision in the High Court of J&K and Ladakh and the courts ruled in their favour.
• The NC and Congress have a seat-sharing agreement for the upcoming election to 26 seats in the Hill Council. Polls for the council were slated for 10 September 2023 however the 6 September 2023 order by the Supreme Court is likely to push the election further.

What is the LAHDC?

• The Ladakh Autonomous Hill Development Councils were constituted under the Ladakh Autonomous Hill Development Councils Act, 1997.
• For effective governance in the districts comprising Ladakh – Leh and Kargil – two councils were constituted in 1995 (LAHDC, Leh) and 2003 (LAHDC, Kargil). The law was deemed to come into force from June 1995.

What are the powers of the LAHDC?

• Powers to both councils include drafting development plans for the region, formulation of budgets for both districts, implementation of movement schemes, promotion of language and culture, public health, education, local road transport and its development among other concerns.
• Small-scale industries, non-conventional energy and tourism also form part of the 28 subjects under the LAHDC’s ambit in governance in the Ladakh region.
• The Hill Councils also have the authority to levy and collect taxes and other fees in their jurisdiction.

Scientists grew whole model of human embryo

GS Paper - 3 (Biotechnology)

Scientists have successfully grown a “human embryo” in the lab without using an egg or sperm. They used a mix of stem cells — early cells that have the ability to differentiate into other types of cells — that were able to spontaneously assemble into an embryo-like structure, mimicking molecular characteristics of an early embryo.

How was the embryo model created?

• The scientists have called it one of the most complete models of a 14-day-old human embryo.
• Several teams have been working on developing these human embryo-like models — around six such models have been published this year itself.
• None of them fully replicate the processes that happen during the early stages of embryo development, but all of them add to their understanding.
• The researchers from Israel used a mix of stem cells and chemicals, a small portion of which was able to spontaneously assemble to form different types of cells that form the foetus, those that provide nutrients to the foetus, cells that lay out the plan for development of the body, and cells that create structures like placenta and umbilical cord to support the foetus.
• One of the problems that the team faced, however, was that only 1% of this mixture actually assembled spontaneously, making the process not very efficient.

Why are embryo models and research important?

• There is no way for scientists to ethically research the early stages of development of an embryo, as it is difficult to study it after it implants in the uterus. Scientists currently study these initial changes in various lab models or donated embryos.
• This research is crucial because the initial days of embryo development is when the majority of miscarriages and birth defects occur.
• Studying the initial stages, scientists say, may help understand genetic and inherited diseases better.
• The understanding of why some embryos develop normally, retain the proper genetic code, and implant properly in the womb while others do not, may also help in improving success rates of in vitro fertilisation.

Can lab-grown embryos be used to get pregnant?

• No. These models are meant to just study the early stages of development of a foetus.
• It is generally accepted — and legally supported in most countries — that these embryo models will be destroyed after studying the first 14 days. Attempts to implant are not allowed.
• Also, creating a lab-based model that mimics the properties of early embryos is still far from an actual embryo that can implant to the lining of the womb.