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?
Answer & explanation
Answer: (c) 1, 2 and 3
All three statements hold. RBI's repo and reverse repo auctions (the LAF window) are open to scheduled commercial banks and Primary Dealers, and Standalone Primary Dealers are NBFCs registered with RBI. Foreign portfolio investors may hold G-Secs within RBI's limits, and stock exchanges run separate debt-market platforms.
- ✓ 1. LAF auctions are open to scheduled commercial banks (not RRBs) and Primary Dealers. A Standalone Primary Dealer is an NBFC registered with RBI, so this category of NBFC does reach the window. An ordinary lending NBFC has no such access, which is why the statement is loosely worded.
- ✓ 2. RBI's primer on the G-Secs market says foreign portfolio investors may take part in it within limits set from time to time (now the Fully Accessible Route), so foreign institutional money can hold G-Secs.
- ✓ 3. Exchanges host a separate debt segment. Corporate bonds trade there on an anonymous order-matching platform open to institutional and retail investors.
Remember · LAF (repo/reverse repo) is open to scheduled commercial banks and Primary Dealers, and standalone PDs are NBFCs. Foreign portfolio investors can hold G-Secs; exchanges run separate debt platforms.
Sources
- RBI, Liquidity Adjustment Facility Scheme ↗ “All Scheduled Commercial Banks (excluding Regional Rural Banks) and Primary Dealers (PDs) having Current Account and SGL Account with Reserve Bank, Mumbai will be eligible to participate in the Repo and Reverse Repo auctions.”
- RBI, Standalone Primary Dealers (Reserve Bank) Directions, 2016 ↗ “The provisions of these Directions shall apply to all Standalone Primary Dealers (SPDs) registered as Non-Banking Financial Company (NBFC) with the Bank.”
- RBI, Government Securities Market in India: A Primer ↗ “Foreign Portfolio Investors (FPIs) are allowed to participate in the G-Secs market within the quantitative limits prescribed from time to time.”
- SEBI, FAQs on the Corporate Bond market (January 2023) ↗ “Anonymous order matching platform: This platform for corporate bond trading is hosted by the stock exchanges, is similar to the capital market segment and is available to both institutional and retail investors.”
Question and answer: UPSC's official GS Paper I (2024, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·