PYQ Question

With reference to India, consider the following statements: 1. Retail investors through demat account can invest in ‘Treasury Bills’ and ‘Government of Ind

August 6, 2026 en

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?

A. 1 only
B. 1 and 2
C. 3 only
D. 2 and 3

Answer: B

Explanation

In February, 2021, RBI allowed retail investors to directly purchase government bonds by opening gilt accounts with RBI. RBI has provided retail investors with online access to the government securities market (primary and secondary) through the RBI (Retail Direct). Hence statement 1 is correct. Previously, retail investors can purchase government bonds by registering themselves on stock exchanges for non-competitive bids. Other route for retail investors is to buy government bonds is government securities (gilt) mutual funds. These are mutual funds which in turn invest in government securities. Negotiated Dealing System-Order Matching(NDS-OM) is a screen based electronic anonymous order matching system for secondary market trading in Government securities owned by RBI. The membership of the system is open to entities like Banks, Primary Dealers, Insurance Companies, Mutual Funds etc. i.e. entities who maintain SGL accounts with RBI. Hence, statement 2 is correct. Central Depository Services Ltd (CDSL) was promoted by BSE Ltd. jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank and Union Bank of India. CDSL was set up with the objective of providing convenient, dependable and secure depository services at aﬀordable cost to all market participants. A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry. Hence, statement 3 is not correct.