UPSC Previous Year Question | Prelims GS | 2024

Consider the following statements: 1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India. 2. In India, Foreign Institutional Investors can hold Government Securities (G-Secs). 3. In India, Stock Exchanges can offer separate trading platforms for debts. Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 3 only
  3. 1, 2 and 3
  4. 2 and 3 only

Answer

Correct Answer

2 and 3 only

Explanation

Statement 1 is incorrect: NBFCs are not generally eligible to access the RBI's Liquidity Adjustment Facility (LAF), which is available to eligible banks and other specified institutions subject to RBI conditions. Statement 2 is correct: Foreign Institutional Investors, now generally covered under the Foreign Portfolio Investor framework, are permitted to invest in Government Securities within prescribed limits and rules. Statement 3 is correct: Indian stock exchanges can provide separate platforms or segments for debt securities. Thus, statements 2 and 3 are correct.

Topics: banking and financial markets, g-secs and debt trading platforms, indian economy, rbi facilities and market participants