Money and banking

Indian Economic System(UPPCS)

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Concerning Money Market in India, consider the following statements:

1. The money market falls under the regulatory jurisdiction of RBI.

2. The Negotiated Dealing System is an electronic trading platform to facilitate the exchange of government securities, is operated by the National Securities Depository Limited (NSDL).

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

Explanation:

Money Market in India :

The market falls directly under the regulatory jurisdiction of RBI, which also performs the function of data collection, compilation, and regular dissemination of information relating to the money market.
important component of the money market relates to the transactions involving Government securities with either original or residual maturity of up to one year.
These would include Treasury bills transactions and Repurchase Agreement
(Repo) transactions with RBI or between the participants.
Thus, there is an overlap between the money market and the Government securities market, both of which are of direct concern to RBI.

By: Parvesh Mehta

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