UPSC Weekly Concepts Snapshot | BMS ‘hack’, Credit-Deposit Gap and GEI targets: Beyond the headlines

— This system is incorporated in an electric vehicle (EV) powered with a large-capacity lithium ion battery, and plays a key role in extending the battery’s service life and ensuring its safe use.

— Automotive is the largest segment for BMS with a 50% market share that is primarily driven by EV battery management and hybrid vehicle energy optimisation.

How does the BAT-BMS ‘hack’ work?

— The BAT-BMS app was originally developed by China’s Shenzhen Grenergy Technology as a legitimate battery management tool for Bluetooth-enabled lithium-ion batteries. The idea of having a Bluetooth connection point is to enable vehicles with these batteries to connect to the device remotely through an app and monitor the parameters of the battery on a real time basis.

— The app allows users to monitor a battery’s state of charge, voltage, current, temperature, charging cycles, and overall health. The application also enables compatible users to control charging and discharging functions, making it useful for battery diagnostics and maintenance.

— According to its Play Store listing, the app can connect wirelessly to batteries over Bluetooth Low Energy within an operating range of around 15 metres. Such apps are typically designed to be used at service centres for battery-related diagnostics.

(Graphic: Google NotebookLM generated)

— The primary concern, however, lies with the security configuration of some BMS used in low-cost EVs. The apps in question could connect to the BMS within a limited range, and be used to cut battery power, bringing the vehicle to a sudden halt.

— This was primarily a problem in electric e-rickshaws, which use low-cost Chinese-made BMS without adequate password protection or default credentials. As a result, anyone standing within Bluetooth range may be able to pair with the battery using compatible applications such as BAT-BMS and disable the battery’s discharge function. Since the discharge circuit supplies power to the motor, switching it off can immediately immobilise the vehicle.

📍UPSC Twist Points: Battery energy storage system (BESS)

— Energy storage refers to systems that can store excess renewable electricity during periods of high generation and discharge it when demand rises but power generation remains low. A range of energy storage technologies are being deployed globally. Among them, battery energy storage systems (BESS) are among the most widely used.

— BESS technology stores electricity chemically and discharges it when needed. Lithium-ion batteries, particularly lithium iron phosphate (LFP) batteries, are currently the dominant technology for grid-scale storage because of their falling costs, high efficiency, and long operational life.

ECONOMY

Credit-Deposit Gap

Core Concept:

— CASA deposits are low-cost for banks and are used to fund loans, the major source of revenue. They are considered a reliable and “sticky” source of funds for banks due to low churn, as such depositors aren’t likely to shift this money to other banks easily.

— The greater the CASA book, the higher their net interest margins tend to be. However, the shift away from low cost deposits makes banks more sensitive to interest rate movements.

— Due to this mismatch in growth, the gap between credit and deposit growth has widened from 1.8 percentage points in December to 5.4 percentage points as of June 15, according to data from the RBI. This has led to the credit-to-deposit ratio of banks — which is the percentage of a bank’s deposits deployed as loans — widening to 82.5% as of June 15 from around 75% in mid-2025.

— As CASA deposits have slowed, banks have shifted to other sources of funds such as term deposits and CDs.

— High credit-to-deposit ratio of banks is a matter of concern because CASA deposits have always been a reliable funding source for banks due to their low cost (around 3-4% interest rate) and “stickiness”.Term deposits and CDs, on the other hand, are much higher-cost (7-8% interest rate) options that ultimately squeeze the margins of banks.

— Thus, while banks have found shorter-term funding solutions as CASA growth has dried up, the over-reliance on such temporary fixes is a double-edged sword.

— Although it helps manage liquidity and fund the booming credit growth for now, a hike in interest rates by the RBI or an external crisis may hit the sector hard if CASA growth is not rejuvenated.

📍UPSC Twist Points: Debt-to-GDP ratio

— The debt-to-GDP ratio is a metric that compares a country’s public debt to its gross domestic product (GDP).

— The Centre has projected the debt-to-GDP ratio to decline to 50±1% by March 2031 from an estimated 56.1% in March 2026.

ENVIRONMENT

Greenhouse gas emission intensity (GEI) targets

Core Concept:

— GHGs are gases that trap heat in the atmosphere and contribute to the “greenhouse effect” that raises surface temperature on Earth.

— The five most abundant GHGs in the atmosphere are water vapour, carbon dioxide, methane, nitrous oxide, and ozone. Other GHGs include synthetic fluorinated gases such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).

— GEI is the amount of greenhouse gases (GHG) emitted per unit of product output, such as the quantum of gases released while producing cement.

Why is it important to have the GEI targets?

— The introduction of industry-specific targets is crucial to meet India’s climate goals. The ultimate objective is to push industries towards a low-carbon growth trajectory through reduction, removal or avoidance of GHG emissions.

📍UPSC Twist Points: Carbon Credit Trading Scheme

— GEI Target puts in place a compliance mechanism for the Carbon Credit Trading Scheme, 2023 (CCTS). The CCTS was launched to create a framework for the trading of carbon credits, to facilitate the reduction of emissions in energy intensive industries, and to support India’s climate commitments under the Paris Climate Agreement of 2015.

— The CCTS established a framework for generating, trading, and using carbon credit certificates. With the introduction of the GEI targets, industries will know what exactly to achieve in order to earn carbon credits.

— Industries will be issued carbon credits for cutting emissions intensity, which they can trade on India’s carbon market. Industries that fail to meet their obligations under the carbon trading scheme would have to buy credits to meet their compliance shortfall, or be penalised by the Central Pollution Control Board, as per the Rules.

— Carbon credits are traded through the Indian Carbon Market platform, with oversight of the Bureau of Energy Efficiency under the Union Ministry of Power. Similar carbon credit markets have been operational elsewhere in the world — in Europe and China since 2005 and 2021 respectively.

Prelims Practice MCQ

Let’s see how much can you recall

Consider the following statements:

1. Greenhouse Gas Emission Intensity measures emissions per unit of output.

2. Battery Management System ensures the safe and efficient operation of battery packs.

3. The debt-to-GDP ratio is a metric that compares a country’s public debt to its gross domestic product.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

ANSWER KEY

(c)

🚨Click Hereto read the UPSC Essentials magazine for June 2026. Share your views and suggestions in the comment box or at manas.srivastava@indianexpress.com🚨

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