With reference to India, consider the following statements:
- 1.Retail investors through demat account can invest in 'Treasury Bills' and 'Government of India Debt Bonds' in primary market.
- 2.The 'Negotiated Dealing System-Order Matching' is a government securities trading platform of the Reserve Bank of India.
- 3.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?
Answer & explanation
Answer: (b) 1 and 2
Retail investors can bid for Treasury Bills and dated government bonds in RBI's primary auctions through the non-competitive route, using stock exchanges as aggregators and holding the securities in demat form. NDS-OM is RBI's electronic trading platform for government securities. CDSL was sponsored by the Bombay Stock Exchange and Bank of India; the RBI is not a promoter.
- ✓ 1. Specified stock exchanges act as aggregators in RBI's primary auctions, submitting consolidated non-competitive bids for their clients and transferring the allotted securities to them, so a demat account holder can buy in the primary market.
- ✓ 2. The RBI introduced the Negotiated Dealing System-Order Matching (NDS-OM), an anonymous screen-based order matching system for secondary-market trading in government securities, in August 2005.
- ✗ 3. SEBI's 1998 registration release says CDSL is sponsored by the Bombay Stock Exchange (BSE) and Bank of India. The RBI is not a promoter, and the depository is regulated by SEBI.
Remember · NDS-OM: RBI's screen-based G-sec trading platform (2005). Depositories: NSDL and CDSL (CDSL sponsored by BSE and Bank of India), both regulated by SEBI.
Sources
- RBI, Government Securities Market in India – A Primer (primary auctions, non-competitive bidding) ↗ “In addition to scheduled banks and primary dealers, specified stock exchanges are also permitted to act as aggregators/facilitators. These stock exchanges submit a single consolidated non-competitive bid in the auction process … In August 2005, RBI introduced an anonymous screen-based order matching module called NDS-OM. … Investors also have the option of holding G-Secs in a dematerialized account with a depository (NSDL / CDSL, etc.). This facilitates trading of G-Secs on the stock exchanges.”
- SEBI press release PR 232/98: Grant of Certificate of Registration to CDSL as a Depository (20 Aug 1998) ↗ “Central Depository Services (India) Limited is sponsored by The Stock Exchange, Mumbai (BSE) and Bank of India (BOI).”
Question and answer: UPSC's official GS Paper I (2021, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·