1. Retail investors through demat accounts can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in the 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?
(a) 1 only
(b) 1 and 2
(c) 3 only
(d) 2 and 3
Answer: b
Explanation:
Retail investors are allowed participation on a “non-competitive” basis in select auctions of dated Government of India (GoI) securities and Treasury Bills; stock exchanges have launched debt trading (G-Secs as also corporate bonds) segment to cater to the needs of retail investors in Demat form.
Hence, statement 1 is correct.
The securities can be bought/sold in the secondary market through Negotiated Dealing System-Order Matching (NDS-OM)
In August 2005, RBI introduced an anonymous screen-based order-matching module called NDS-OM. This is an order-driven electronic system, where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants.
Hence, statement 2 is correct.
NDS-OM is operated by the Clearing Corporation of India Limited (CCIL) on behalf of the RBI.
What is a Depository?
A depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities.
It can be compared with a bank, which holds the funds for depositors. A Bank – Depository analogy is given in the following table:
BANK-DEPOSITORY – AN ANALOGY
| BANK | DEPOSITORY |
| Holds funds in an account | Holds securities in an account |
| Transfers funds between accounts on the instruction of the account holder | Transfers securities between accounts on the instruction of the BO account holder |
| Facilitates transfer without having to handle money | Facilitates transfer of ownership without having to handle securities |
| Facilitates safekeeping of money | Facilitates safekeeping of securities |
At present, two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are registered with SEBI.
RBI has no role in Central Depository Services (India) Limited (CDSL).
Hence, statement 3 is incorrect.
Read: Solved Economy PYQs With Explanation 2021 UPSC Prelims