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?

QUESTION

Hard

Economy

Prelims 2024

Consider the following statements:

In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
In India, Stock Exchanges can offer separate trading platforms for debts.

Which of the statements given above is/are correct?

Select an option to attempt

Explanation

Statement 1 is incorrect: LAF is a facility given only to Scheduled Commercial Banks (SCBs) and certain primary dealers, since they maintain current accounts and CRR (Cash Reserve Ratio) with RBI. NBFCs do not maintain CRR/SLR with RBI, so they are outside LAF operations.
Statement 2 is correct: Foreign Institutional Investors (FIIs) are permitted to invest in Government Securities (G-Secs) in India, subject to certain regulations and limits set by the Securities and Exchange Board of India (SEBI) and RBI.
Statement 3 is correct: Stock exchanges in India can offer separate trading platforms for debt securities. For instance, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have dedicated platforms for trading in corporate bonds and government securities.