Here is Question No. 73 a part of our series on UPSC Prelims 2021.
Q73. With reference to India, consider the following statements :
- Retail investors through demat accounts can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in the primary market.
- The ‘Negotiated Dealing System-Order Matching’ is a government securities trading
the platform of the Reserve Bank of India. - The ‘Central Depository Services Ltd’. is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange.
Which of the statements given above is/are correct?
a) 1 only
b) 1 and 2
c) 3 only
d) 2 and 3
Answer: (b)
- Statement 1 is correct: The RBI has allowed retail investors with online access to the government securities market – both primary and secondary – directly through the Reserve Bank. The facility of buying government securities directly through RBI is called RBI Retail Direct. Under it, retail investors can open and maintain a Retail Direct Gilt (RDG) account with the RBI through the dedicated online portal. The account can be opened singly or jointly with another retail investor. The gilt account is opened by the bank for individuals who wish to invest in government securities and treasury bills. Banks in effect maintain a Demat account for these instruments in the name of the individuals.
- Statement 2 is correct: The Negotiated Dealing System Order Matching is an electronic trading platform operated by the Reserve Bank of India to facilitate the issuing and exchange of government securities and other types of money market instruments.
- Statement 3 is incorrect: CDSL is promoted by BSE which later divested its stakes among nationalized banks.
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