To understand the Payments and Settlement System (PSS) in India, we must first clearly distinguish two closely related concepts—Payment and Settlement. These two terms may appear similar, but in financial systems they represent different stages of the same transaction process. Let us understand them. Payment and Settlement Payment A payment refers to the act of…
To begin with, we must understand the philosophy behind cooperative banking. A Cooperative Bank is a financial institution that is owned, controlled, and operated by its members. These members usually belong to the same locality, profession, or community, and they come together voluntarily to pool their financial resources. Instead of profit maximization like commercial banks,…
Before studying the different categories of banks in India, it is important to understand that the Indian banking system is not a single uniform structure. Instead, it is a carefully designed institutional framework where different types of banks perform specialized roles to meet the diverse financial needs of the economy. At the apex of this…
At its core, banking refers to the system of financial institutions that accept deposits from the public and use those funds to provide loans and other financial services. Banks perform the role of financial intermediaries. This means they act as a bridge between two groups: Instead of savers directly lending money to borrowers (which would…
With increasing globalisation of trade, investment, and digital business, taxation has moved beyond national boundaries. Income is often earned in one country, booked in another, and controlled from a third. To deal with these complexities, countries rely on international tax treaties, multilateral frameworks, and anti-avoidance rules. This section brings together the most important global and…
A tax haven is a country or territory that offers very low or zero tax rates, along with high financial secrecy, making it attractive for individuals and companies seeking to reduce or avoid tax liabilities in their home countries. Tax havens play a crucial role in debates around tax justice, global inequality, and base erosion…
Money laundering is the process by which illegally obtained income (“dirty money”) is made to appear legitimate. The central objective is to conceal the true source and ownership of funds, so that they cannot be traced back to criminal activity. In the context of public finance and governance, money laundering is a serious threat to…
Black money is one of the most persistent challenges in India’s public finance and governance framework. It represents income or assets that are generated through illegal means or concealed from authorities, and therefore not reported for tax purposes. In essence, black money is unaccounted wealth that exists outside the formal economic system. What is Black…
In discussions on taxation, two terms frequently appear together but mean very different things: tax evasion and tax avoidance. Understanding this distinction is crucial—not only for conceptual clarity but also for answering ethics-, governance-, and revenue-related questions in UPSC. Tax Evasion — Illegal Non-Payment of Taxes Tax evasion refers to the illegal practice of deliberately…
Taxation is not a static system; it evolves with economic realities, market behaviour, and technological change. In recent years, the Government of India has introduced new taxes and significant reforms to address issues of equity, efficiency, transparency, and revenue mobilisation, especially in capital markets and the digital economy. Reintroduction of Long-Term Capital Gains (LTCG) Tax…
