Q. 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 the 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?
(a) 1 and 2 only
(b) 3 only
(c) 1, 2 and 3
(d) 2 and 3 only
Correct answer: (d) 2 and 3 only
Question from UPSC Prelims 2024 GS Paper
Explanation:
1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
This statement is incorrect. Traditionally, Non-Banking Financial Companies (NBFCs) in India did not have direct access to the Liquidity Adjustment Facility (LAF) window of the Reserve Bank of India (RBI). The LAF is primarily available to scheduled commercial banks.
2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
This statement is correct. Foreign Institutional Investors (FIIs) are allowed to invest in Government Securities (G-Secs) in India, subject to certain limits and regulations set by the RBI and the Securities and Exchange Board of India (SEBI).
3. In India, Stock Exchanges can offer separate trading platforms for debts.
This statement is also correct. Indian stock exchanges do offer separate trading platforms for debt securities. For example, the National Stock Exchange (NSE) has a separate debt segment for trading various debt instruments, including corporate bonds, government securities, and other fixed-income securities.
Therefore, the correct answer is (d) 2 and 3 only.