Consider the following statements about lsquo Muni Bond rsquo 1 Commercial banks can issue thes...........

Economic Affairs Financial Markets

Consider the following statements about ‘Muni Bond’.

1.Commercial banks can issue these bonds on the behalf of Municipal Corporation to fund their projects.

2.These new kinds of bonds have been introduced in India after the introduction of smart cities.

3.It helps corporations to raise funds without looking for State grants or being dependent on agencies such as World Bank.

Which of the given statements is/are correct?

3 only

1 and 2 only

2 only

2 and 3 only

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Explanation:

3 only

Commercial banks can issue these bonds on behalf of Municipal Corporation to fund their projects.

This statement is incorrect. Municipal bonds, commonly known as Muni Bonds, are typically issued by municipal corporations directly to raise funds for their projects. Commercial banks may play a role in underwriting or facilitating the issuance, but they do not issue these bonds on behalf of municipal corporations.

These new kinds of bonds have been introduced in India after the introduction of smart cities.

This statement is not correct. Municipal bonds have been used in India for quite some time, and their introduction is not directly tied to the concept of smart cities. Municipal bonds have been a financial instrument used by municipalities to raise funds for various projects.

It helps corporations to raise funds without looking for State grants or being dependent on agencies such as the World Bank.

This statement is correct. Municipal bonds allow local governments (corporations) to raise funds independently, reducing their reliance on state grants or international agencies for financing.

Therefore, the correct option is 1 (3 only).