RBI Grade B Current Affairs — 8 November 2026

On 20 December 2021, the OECD/G20 Inclusive Framework released Model Global Anti-Base Erosion (GloBE) Rules under Pillar Two of BEPS 2.0. These rules establish a 15% global minimum corporate tax rate for multinational enterprises with annual revenues exceeding €750 million. Pillar One reallocates taxing rights to market jurisdictions. Together, the two pillars aim to curb profit-shifting to low-tax havens and ensure large corporations pay a minimum level of tax wherever they operate.

BEPS 2.0 is the OECD/G20 response to base erosion and profit shifting — the practice by which multinationals legally move profits to low-tax jurisdictions, reducing tax revenue for countries where actual economic activity occurs.

Pillar One addresses where tax is paid. It reallocates a portion of profits (Amount A) of the largest and most profitable multinationals (revenue >€20 billion, profitability >10%) to market jurisdictions — countries where consumers are located — regardless of physical presence. This is especially significant for digital economy companies like Google and Meta that generate revenue from a country without having a taxable presence there.

Pillar Two addresses how much tax is paid. The GloBE rules introduce an effective minimum tax rate of 15% via two interlocking domestic rules: the Income Inclusion Rule (IIR), where a parent company pays a top-up tax if a subsidiary is taxed below 15%, and the Undertaxed Profits Rule (UTPR), a backstop mechanism. A third rule — the Subject to Tax Rule (STTR) — applies to certain payments between related parties.

For India, BEPS 2.0 is significant on multiple fronts. India is a member of the Inclusive Framework, stands to gain from Pillar One's reallocation of digital profits, and has already enacted a Qualified Domestic Minimum Top-Up Tax (QDMTT) to retain revenue domestically. India's Equalisation Levy (digital tax) is expected to be withdrawn as part of the Pillar One deal. These dynamics sit at the intersection of international taxation, fiscal sovereignty, and G20 economic diplomacy — all high-frequency UPSC themes.

The government has approved the strategic restructuring of IDBI Bank Ltd., which involves disinvestment of government and LIC stakes to a strategic investor. Once completed, the transaction is expected to become the largest foreign direct investment ever received in India's financial sector. The move is part of India's broader disinvestment programme aimed at reducing the state's footprint in public sector banks and unlocking value from government-owned financial institutions.

IDBI Bank has a unique ownership structure: the Government of India and LIC together hold a majority stake, making it effectively a government-controlled bank. The strategic restructuring involves selling a combined stake to a private strategic investor, which could include a foreign entity, thereby triggering FDI into the banking sector.

This disinvestment is significant for several reasons. First, it represents a policy shift — moving away from the traditional model of state-owned banking toward private participation in a systemically important bank. Second, since the buyer could be a foreign entity, the transaction would constitute FDI, and given the size of IDBI Bank's balance sheet, it would be the largest single FDI inflow India's financial sector has ever seen.

For RBI, this raises regulatory questions: who can hold a banking licence, fit-and-proper criteria for large shareholders, and whether the new owner requires an RBI-approved ownership structure. RBI's guidelines on ownership and governance in private sector banks become directly relevant.

For UPSC aspirants, this connects to broader themes: disinvestment policy, the role of LIC as a government instrument, financial sector reforms since 1991, and governance of public sector enterprises. IDBI Bank was originally established under the IDBI Act, 1964, as a development finance institution before converting to a universal bank. Its transformation from DFI to commercial bank to privatisation candidate itself tells the story of India's evolving financial architecture.