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[DAILY CURRENT AFFAIRS, 11 APRIL 2023]

BIODIVERSITY LOSS AFFECTS HUMAN HEALTH

1. Context 

Animals, plants and fungi biodiversity holds a treasure trove of chemicals that can be used to treat diseases from malaria to cancer. But its loss is driving species to extinction, dashing many hopes for medicine.

2. Key points

  • Bright reds, yellows and blues the colour of poison dart frogs offer a stark warning to curious predators.
  • The amphibians are toxic. when eaten, the chemicals on their skin can cause convulsions, muscle contractions and even death. For humans, these colours mean something more hopeful.
  • Those same poisonous chemicals could provide the key to medications that treat infections now resistant to the antibiotics, we have already developed.
  • Poison dart frogs have important medical compounds that are good anaesthetics.
  • They have good antibiotics that are on their skin that we are using now. And many that have not even been discovered or commercialised yet.

3. The basis for much-needed medicine

  • Natural compounds found in frogs, plants and many other species provide the basis for many of our medicines.
  • Paclitaxel, a drug used to treat cancer, for example, is derived from the bark of the Pacific yew tree and ziconotide a drug that is used to treat severe pain comes from cone snails.
  • Around 70 per cent of cancer medications are based on nature, according to the UN's Intergovernmental SciencePolicy Platform on Biodiversity and Ecosystem Services (IPBES).
  • But biodiversity, which includes the plants, animals, fungi and bacteria found on Earth is disappearing and so, too are the possibilities they hold.
  • Climate change and chytrid fungus have decimated our frog populations and led to a large number of extinctions.
  • Chytrid fungus causes a disease in amphibians that has wiped out as many as 90 species.
  • Maybe we don't need so many different hundreds of species of frog. But on another hand, that potential kind of treasure trove is still there.

4. Human-driven extinction

  • Around 1 million animal and plant species are currently estimated to be threatened with extinction, according to a 2019 report published by IPBES, although estimates vary wildly.
  • Experts say species are disappearing 1, 000 to 10, 000 times faster than the normal rate of extinction and humans are to blame.
  • The two things that threaten biodiversity the most at the moment are overharvesting and land conversion.
  • That's not just clearance of land for livestock to graze, but also clearance of land for food and clearance of land for food and clearance of oceans.
Since 1990, around 420 million hectares of forest an area almost the size of the European Union has been lost and turned into farmland and cleared for other uses.
Meanwhile, fish stocks are also diminishing, with figures from 2017 estimating that we have overfished a third of global stocks.
  • Human-driven climate change is also having an impact. Growing carbon dioxide levels are leading to increased ocean acidification, bleaching corals and destroying vast habitats. 
  • Rising temperatures and unsustainable harvesting are also pushing some plant species to the edge of extinction.

5. Traditional medicine

  • While the loss of biodiversity is making it more difficult to discover new medications, it is also affecting how communities access traditional medicine.
  • An estimated 4 billion people still rely primarily on natural remedies to heal themselves whether it is using latex from fig trees to treat intestinal parasites in the Amazon or neem oil to treat skin disorders in India.
  • They don't go to the pharmacy, they go to what they have collected and stored. So when those plants are difficult to access, that's putting their health at risk.
  • Around 40 per cent of the world's plant species are threatened with extinction, according to a report published by the Royal Botanic Gardens Kew in London, which is home to one of the most diverse botanical collections in the world.
  • Among the threatened plants are 723 species that are used medicinally.
  • The Pacific yew tree the source of paclitaxel, the chemotherapy drug, is now classified as near threatened under the IUCN Red List, which tracks the status of different species.

6. The Future of drug discovery

  • When thinking about drug discovery, it's hard to know exactly what humans stand to lose through the loss of species that make up a diverse natural world.
  • There is still so much to investigate. The ocean for example remains still largely undiscovered.
  • Scientists are looking to chemicals produced by sponges to provide treatment for cancers, for example. But it is more complex than simply finding and examining single species.
  • Gerwick is investigating the symbiotic relationship between the weaver shrimp and cyanobacteria.
  • The shrimps weave the bacteria into nests, which protect them from predators because of the toxic molecules the bacteria produce molecules that have the potential as a treatment for pancreatic cancer in humans.
  • So the bacterium produces these compounds and the shrimp derives benefit from it and maybe humans do as well.
  • If we lose biodiversity we are losing access to molecules and some of those molecules might be compounds that would save the life of one of our children from an infectious disease, from cancer.

7. Nature health equals human health

  • Humans are almost completely dependent on the natural world to stay healthy.
  • Beyond drug discovery, we rely on trees to take pollutants like carbon dioxide, out of the air.
  • We need working wetlands to keep the water clean and we need insects to pollinate our crops to provide us with food.
  • Measures are being taken to protect biodiversity and reverse the loss.
  • In December, 188 governments agreed to take action to put 30 per cent of the planet under protection by 2030.
  • But it is not clear whether it will be sufficient and come quickly enough.
 
For Prelims: Biodiversity, Malaria, Cancer, IUCN Red List, dart frogs, IPBES, Paclitaxel, Climate change, 
For Mains:
1. Discuss how biodiversity loss jeopardises human health. (250 Words)
 
Previous Year Questions

1. Biodiversity forms the basis for human existence in the following ways(2011)

  1. Soil formation
  2. Prevention of soil erosion
  3. Recycling of waste
  4. Pollination of crops

Select the correct answer using the codes given below:

(a.) 1, 2 and 3 only      (b.) 2, 3 and 4 only    (c.) 1 and 4 only     (d.) 1, 2, 3 and 4

Answer: D

2. Which one of the following is not a site for in-situ method of conservation of flora? (2011)

A.  Biosphere Reserve             B. Botanical Garden

C. National Park                      D.Wildlife Sanctuary

Answer: B

3. Consider the following statements(2011)

  1. Biodiversity is normally greater in the lower latitudes as compared to the higher latitudes.
  1. Along the mountain gradients, biodiversity is normally greater in the lower altitudes as compared to the higher altitudes.

Which of the statements given above is/are correct?

A. 1 only       B. 2 only       C. Both 1 and 2     D. Neither 1 nor 2

Answer: C

4. Three of the following criteria have contributed to the recognition of Western Ghats-Sri Lanka and Indo-Burma regions as hotspots of biodiversity: (2011)

  1. Species richness
  2. Vegetation density
  3. Endemism
  4. Ethno-botanical importance
  5. Threat perception
  6. Adaptation of flora and fauna to warm and humid conditions

Which three of the above are correct criteria in this context?

A. 1, 2 and 6         B. 2, 4 and 6        C. 1, 3 and 5         D.  3, 4 and 6

Answer: C

5. Two important rivers — one with its source in Jharkhand (and known by a different name in Odisha), and another, with its source in Odisha — merge at a place only a short distance from the coast of Bay of Bengal before flowing into the sea. This is an important site of wildlife and biodiversity and a protected area.

 Which one of the following could be this? (2011)

A. Bhitarkanika     B. Chandipur-on-sea     C.Gopalpur-on-sea       D. Simlipal

Answer: A

6. Human activities in the recent past have Caused the increased concentration of carbon dioxide in the atmosphere, but a lot of it does not remain in the lower atmosphere because of : (2011)

  1. its escape into the outer stratosphere.
  2. the photosynthesis by phyto-plankton in the oceans.
  3. the trapping of air in the polar ice caps.

Which of the statements given above is/are correct?

A.1 and 2     B. 2 only    C. 2 and 3       D.3 only

Answer: C

7. Which of the following can be threats to the biodiversity of a geographical area? (2012)

  1. Global warming
  2. Fragmentation of habitat
  3. Invasion of alien species
  4. Promotion of vegetarianism
Select the correct answer using the codes given below:
A. 1, 2 and 3 only  B. 2 and 3 only    C. 1 and 4 only    D. 1, 2, 3 and 4
 
Answer: A

Source: The Indian Express

WORLD TRADE ORGANISATION (WTO)

 

1. Context

After days of protracted negotiations, the 12th Ministerial Conference of the World Trade Organization on June 17, 2022, agreed to a series of deals relating to the temporary waivers on Covid-19 vaccines, a moratorium on e-commerce trade, food security, and setting limits on harmful fishing subsidies.

2. What is WTO?

  • The World Trade Organization is the only international organization that deals with the rules of trade between countries.
  • The WTO officially commenced in 1995 under the Marrakesh Agreement signed by 124 nations, replacing the General Agreement on Tariffs and Trade (GATT).
  • Currently, it has 164 members and 23 observer governments (like Iran, Iraq, Bhutan, Libya, etc).
  • According to its rules, all decisions are taken through consensus and any member can exercise a veto.
  • It aims to promote free trade, which is done through trade agreements that are discussed and signed by the member states.
  • The WTO also provides a forum for countries to negotiate trade rules and settle economic disputes between them. 

3. What is WTO's Ministerial Conference?

  • The Ministerial Conference is the WTO’s top decision-making body and usually meets every two years.
  • All members of the WTO are involved in the Ministerial Conference and they can take decisions on all matters covered under any multilateral trade agreements.
  • The WTO’s 12th Ministerial Conference was held in Geneva from 12-17 June.
  • It was supposed to end on 15 June, but with intensifying negotiations, the conference was extended by two days. 

4. Key takeaways from the meeting

4.1 Curtailing harmful fishing subsidies

  • The WTO passed a multilateral agreement that would curb ‘harmful’ subsidies on illegal, unreported, and unregulated fishing for the next four years, to better protect global fish stocks.
  • Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
  • The current agreement, which establishes new trading rules, is the second multilateral agreement in WTO history. 
  • India and other developing countries were able to win some concessions in this agreement.

4.2 Global food security

  • Members agreed to a binding decision to exempt food purchased by the UN's World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
  • In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group's members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
  • However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
  • India's key demand to allow it to export food from its public stockholdings to other countries will reportedly be discussed in the next Ministerial Conference in 2023.

4.3 E-Commerce transactions

  • Members agreed to continue the long-standing moratorium on customs duties on e-commerce transmissions.
  • It will be continued until the subsequent Ministerial Conference or until March 31, 2024, depending on whichever comes first.

4.4 Covid-19 vaccine production

  • WTO members agreed to temporarily waive intellectual property patents on Covid19 vaccines without the consent of the patent holder for 5 years so that they can more easily manufacture them domestically.
  • The current agreement is a watered-down version of the original proposal made by India and South Africa in 2020.
  • They had wanted broader intellectual property waivers on vaccines, treatments, and tests.
  • Rich pharmaceutical companies had strongly opposed this, arguing that IPs do not restrict access to Covid vaccines and that the removal of patent protections gives researchers that quickly produced life-saving vaccines, a negative message. 
  • The waiver agreed upon by the WTO was criticized by advocacy groups for being narrow in scope, as it did not cover all medical tools like diagnostics and treatments.

5. Significance of the Recent Agreements

  • The fisheries agreement is of immense significance as it is the first time that members agreed with environmental sustainability at its heart.
  • It will also help in the protection of the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries. It is only the second multilateral agreement on global trade rules struck in its 27-year history.
  • Second, the exemption of WFP's food from tariffs is vital for promoting global food security, especially in light of the global food shortages and rising prices caused by the war between Ukraine and Russia.
  • Third, the temporary waiver will contribute to ongoing efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off.

6. Issues surrounding WTO

6.1 The burden for Poor countries

  • The WTO rules include many Non-trade subjects as well. The subjects like environment, labor standards, fossil fuel subsidies, plastic pollution, and transparency in government procurement have been brought into the fold of the WTO.
  • This is expected to raise costs for the poor and developing countries and impact the competitiveness of their goods.
  • For instance, a poor country exporting cotton shirts must first meet high environmental standards at home. This will only raise costs and cut exports from poor countries.

6.2 Trade wars

  • The US administration imposed steep tariffs in January 2018 on China alleging IP violations.
  • In December 2019 the US also blocked the appointment of new nominees to WTO’s appellate body. This has paralyzed the WTO as a judge and enforcer of global trade rules.

6.3 Lack of consensus

  • The developed nations’ game plan is to put the old obligations on the back burner and push the WTO to form rules on new areas like e-commerce.
  • It is an area where the US firms have a clear edge.
  • Most WTO member countries want them to first deliver on the agreed issues like reduction in agriculture subsidies.
 
For Prelims: General Agreement on Tariffs and Trade (GATT), Marrakesh Agreement, World Trade Organisation (WTO), 12th Ministerial Conference of WTO, and UN's World Food Programme (WFP).
For Mains: 1. What have been the recent issue related to dispute settlement at WTO? Have the policies at WTO worked against the interest of emerging economies like India?(250 Words)
 

Previous year Questions

1. In the context of which of the following do you sometimes find the terms 'amber box, blue box, and green box' in the news? (UPSC 2016)
A. WTO affairs
B. SAARC affairs
C. UNFCCC affairs
D. India-EU negotiations on FTA
Answer: A
 
2. In the context of the affairs which of the following is the phrase "Special Safeguard Mechanisms" mentioned in the news frequently? (UPSC 2010)
A. United Nations Environment Program
B. World Trade Organization Agreement
C. ASEAN-India Free Trade
D. G-20 Summits
Answer: B
 
3. Consider the following statements: (UPSC 2017)
1. India has ratified the Trade Facilitation Agreement (TFA) of the WTO.
2. TFA is a part of WTO's Bali Ministerial Package of 2013.
3. TFA came into force in January 2016
Which of the statements given above is/are correct?
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3
Answer: A
 
Source: The Indian Express

TEMPO 

1. Context 

A SpaceX Falcon 9 rocket successfully launched from Florida, carrying a new NASA device that can track air pollution over North America.

2. Key points

  • The Tropospheric Emissions Monitoring of Pollution (TEMPO) instrument will allow scientists to monitor air pollutants and their emissions sources from space more comprehensively than ever before, down to the neighbourhood level.
  • This instrument will measure pollution and air quality across greater North America on an hourly basis during the daytime, all the way "from Puerto Rico up to the tar sands of Canada".
  • The data will be used by the US Environmental Protection Agency (EPA), the National Oceanic and Atmospheric Administration (NOAA) and other agencies responsible for tracking atmospheric pollution.

3. The Speciality of TEMPO

  • The TEMPO mission is about more than just studying pollution it's about improving life on Earth for all.
  • By monitoring the effects of everything from rush-hour traffic to pollution from forest fires and volcanoes, NASA data will help improve air quality across North America and Protect our planet.
  • A unique feature of TEMPO, which is about the size of a washing machine and has been described as a chemistry laboratory in space, is that will be hosted on an Intelsat communications satellite in geostationary orbit.
  • Existing pollution-monitoring satellites are in low Earth orbit, which means they can only provide observations once a day at a fixed time.
  • TEMPO will be able to measure atmospheric pollution down to a spatial resolution of 4 square miles (10 square kilometres) or neighbourhood level.

4. About Geostationary orbit

  • Geostationary orbit is a common orbit for weather satellites and communications satellites, but an air quality instrument measuring gases had not been there yet.
  • In a geostationary orbit 22, 236 miles (35, 786 kilometres) above the equator, TEMPO will match the rotation of the Earth, meaning it will stay over the same location in North America at all times.
  • The great thing about TEMPO is that for the first time, we will be able to make hourly measurements over North America, so it will be able to see What's happening over the whole day as long as the sun is up.
  • TEMPO will have multiple applications from measuring levels of various pollutants to providing air quality forecasts and helping the development of emission-control strategies.

5. Importance of the Mission

  • More than 40 per cent of the US population, 137 million people, live in places with unhealthy levels of particle pollution or ozone.
  • Air pollution is blamed for some 60, 000 premature deaths a year.
  • Among the pollutants tracked by TEMPO will be nitrogen dioxide, produced from the combustion of fossil fuels, formaldehyde and ozone.
  • The data will be made available online for members of the public to monitor air quality information in their local area.
  • TEMPO will power up at the end of May or in early June and begin producing data in October, although it will not be made available to the public until April 2024.
 
For Prelims: TEMPO, Air Pollution, NASA, Geostationary orbit, NOAA, EPA
For Mains: 
1. What is the Tropospheric Emissions Monitoring of Pollution Instrument? Discuss how it helps combat Air Pollution. (250 Words)
 
 
Previous Year Questions
 
1. In the cities of our country, which among the following atmospheric gases are normally considered in calculating the value of Air Quality Index? (UPSC 2016)
  1. Carbon dioxide
  2. Carbon monoxide
  3. Nitrogen dioxide
  4. Sulfur dioxide
  5. Methane

Select the correct answer using the code given below:

A. 1, 2 and 3 only      B. 2, 3 and 4 only   C. 1, 4 and 5 only     D. 1, 2, 3, 4 and 5

Answer: B

2. Which of the following are the reasons/factors for exposure to benzene pollution? [UPSC 2020]

  1. Automobile exhaust
  2. Tobacco smoke
  3. Wood burning
  4. Using varnished wooden furniture
  5. Using products made of polyurethane

Select the correct answer using the code given below:

A. 1, 2 and 3 only  B. 2 and 4 only   C. 1, 3 and 4 only     D. 1, 2, 3, 4 and 5

AnswerA

3. What is the ‘Greenhouse Gas Protocol’? (UPSC 2016)

(a) It is an international accounting tool for government and business leaders to understand, quantify and manage greenhouse gas emissions

(b) It is an initiative of the United Nations to offer financial incentives to developing countries to reduce greenhouse gas emissions and to adopt eco-friendly technologies.

(c) It is an inter-governmental agreement ratified by all the member countries of the United Nations to reduce greenhouse gas emissions to specified levels by the year 2022

(d) It is one of the multilateral REDD+ initiatives hosted by the World Bank

Answer: A

4. Photochemical smog is a resultant of the reaction among (UPSC 2013)

(a) NO2, O3 and peroxyacetyl nitrate in the presence of sunlight

(b) CO, O2 and peroxyacetyl nitrate in the presence of sunlight

(c) CO, CO2 and NO2 at low temperature

(d) high concentration of NO2 O3 and CO in the evening

Answer: A

For Mains:

1. Describe the key points of the revised Global Air Quality Guidelines (AQGs) recently released by the World Health Organisation (WHO). How are these different from its last update in 2005? What changes in India’s National Clean Air Programme are required to achieve revised standards? (UPSC 2021) (250 Words)

Source: The Indian Express

EMPIRES BUILDERS OF MEDIEVAL INDIA

 
 
1.Context
Within hours of the National Council of Educational Research and Training’s (NCERT) decision to remove a chapter on the Mughals from the history textbooks for Class 12 students, noted historians of the country issued a statement, denouncing the deletions
“Kings and Chronicles: The Mughal Courts” has been deleted... In medieval times, the Mughal empire and the Vijayanagara Empire were two of the most important empires... In the revised version, while the chapter on the Mughals has been deleted, the chapter on the Vijayanagara Empire has been retained.”
 
2.Background
  • It’s hard to understand the history of modern India without the contribution of the Mughals, who, including Akbar, Jahangir, Shah Jahan and Aurangzeb, were all born in undivided India; and were buried here. None of them ever left the country, not even to go on a pilgrimage to Mecca
  • It all started with Babur when he defeated Ibrahim Lodi in the First Battle of Panipat in 1526, and went on to capture all of North India in his brief reign of four years
  • Babur’s victory was to usher in a prolonged period of political stability for the next nearly 200 years
  • His grandson Akbar ruled for almost 50 years, as did Akbar’s great-grandson Aurangzeb, while his son Jahangir and Shah Jahan ruled for over 20 years each, making sure there was consistency in state policy and the development of the empire was unimpeded
  • Their influence gradually reduced from 1707 onwards, and the last Mughal, Bahadur Shah Zafar, was only a symbolic leader of the Revolt of 1857
  • However, in this symbolism lay a message; common Indians, as evidenced by the sipahis’ uprising, considered Mughals to be their kings; hence the leadership role to Zafar
  • This was a throwback to the golden era of the Great Mughals; the latter Mughals, post-1707, had done nothing to earn that kind of trust
  •  Aurangzeb’s prolonged battles in the Deccan had enfeebled the state’s finances, and his successors were unable to replenish the treasury
  • To augment resources, Aurangzeb had imposed jizyah, a tax solely on non-Muslims, which proved detrimental in the long run
  • Once Aurangzeb passed away in 1707, his successors proved incapable of ruling over a huge, unwieldy empire
3. Beginning
  • A descendant of Timur and Genghis Khan, Babur, who knew Turkish and Persian, started the practice of chronicling the events and noting down his impressions of the landscape and the artists he met
  • He thus authored a unique document Baburnama, originally in Turkish which was later translated into Persian
  • Not just Baburnama, the Ramayana, the Mahabharata and the Upanishads were also translated during the Mughal era
  • The first translations of texts like the Ramayana and Mahabharata in any language from Sanskrit was done under the Mughals. Dara Shukoh translated 25 Upanishads into Persian. He also translated Yogavashishta
  • Incidentally, Shukoh, the man who never became the king, was way ahead of the times. Eldest son of Shah Jahan, he was a Sunni Muslim who associated closely with Hindu philosophers and Christian priests
  • Shukoh clearly inherited all this from Jalaluddin Akbar, the Emperor who built Ibadat Khana where scholarly debates were held between Brahmins, Christians, Jain, Buddhist and Islamic scholars
  • It was a move way ahead of the time when one thinks until then the religion of the Emperor was supposed to be religion of the kingdom
  • The modern Ganga-Jamuni tehzeeb stems from that shared feeling, a synthesis of different cultures
  • The philosophical discussions during the time of Akbar and his son Jahangir led to intermingling among commoners
  • In Mughal India, Hindus and Muslims lived cheek by jowl in the same locality. The respect extended to places of worship
  • Often land grants for temples were made by the Mughal emperors; even the much maligned Aurangzeb, who demolished temples, issued grants
4. Empire
  • By the end of the reign of Akbar, the population of the Mughal kingdom exceeded that of entire Europe, and the Mughal wealth was unmatched
  • Shah Jahan was the first Indian ruler after Ashoka to reach Balkh and Badakshan. There was no mightier empire in the world
  • The richness was owed substantially to the Rajputs, who were sharers of power from the time of Akbar, who defeated Rana Pratap in the Battle of Haldighati, and co-opted them in his empire through matrimonial alliances
  • Most Mughal rulers after Jahangir were born to Rajput women. As a result, within the family, Hindavi was often the language of communication. Aurangzeb, incidentally, conversed in Hindi and composed in Braj bhasha
  • It’s important to remember that during the time of the Mughals, Raskhan wrote of Krishna in Hindi and Balkrishan Brahman in Persian
 
 
For Prelims: Mughals, Babarnama, Ibadat Khana
For Mains: 1. Discuss the Disintegration of Mughals that may be found in the Indian Economy and external inputs. Discuss (250 Words)
 
Previous Year Questions:
1.Consider the following:

The arrival of Babur into India led to the (UPSC 2015)

(1) introduction of gunpowder in the subcontinent

(2) introduction of the arch and dome in the region’s architecture

(3) establishment of Timurid dynasty in the region

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Answer (C)

 
 
 
Source: The Hindu

ASBA

 

1. Context

The capital markets regulator, the Securities and Exchange Board of India (SEBI), last week approved a framework for an Application Supported by a Blocked Amount (ASBA) like facility for trading in the secondary market. The facility will be optional for investors and stock brokers. The framework will be implemented in a phased manner to facilitate a smooth transition in the market.

2. What is ASBA?

  • ASBA, which was first introduced by SEBI in 2008, is an application by an investor that contains authorization to a Self-Certified Syndicate Bank (SCSB) to block in the bank account the application money for subscribing to an issue.
  • An SCSB is a recognized bank capable of providing ASBA services to its customers.
  • The application money of an investor applying through ASBA shall be debited from the bank account only if her application is selected for allotment after the basis of allotment has been finalized.
  • In public issues and rights issues, all investors have to mandatorily apply through ASBA. 

3. What has SEBI done?

  • In its board meeting on March 29, 2023, the markets regulator gave its nod for an ASBA-like facility for secondary market trading.
  • The facility is based on the blocking of funds for trading in the secondary market through UPI (Unified Payments Interface).
  • At present, ASBA is available for the primary market, wherein the initial public offering (IPO) funds only are blocked on application, and are debited only on the allotment.
  • According to discount stock broker 5paisa, the extension of ASBA to secondary markets means brokers will no longer collect margins from clients; only a block will be placed on the bank account.
  • This will not matter much for banks-cum-brokers such as ICICI, HDFC, and Axis, since it anyways works like a quasi-ASBA. However, it could matter for non-bank brokers.

4. How does ASBA work in the primary market?

  • In the ASBA system, there is explicit authorization to block the application money in the bank account.
  • When an investor makes an application for an IPO, a similar amount of funds are blocked in the ASBA bank account.
  • Such funds can not be used for any other purposes.
  • However, once the allotment is finalized, based on the number of shares allotted, the ASBA bank account will be debited, and the balance funds will be released for regular use according to 5paisa.

5. How will the ASBA facility benefit retail investors in the secondary market?

  • ASBA in secondary market trading will ensure that clients will continue to earn interest on the blocked funds in their savings account till the debit takes plac

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