With reference to India, consider the following statements:Retail investors through demat account ca

Question

With reference to India, consider the following statements:Retail investors through demat account can invest in Treasury Bills and Government of India Debt Bonds in primary market.The Negotiated Dealing System-Order Matching is a government securities trading 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?

Accepted Answer

In February 2021, the RBI allowed retail investors to directly purchase government bonds by opening gilt accounts with the RBI. The 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 could purchase government bonds by registering themselves on stock exchanges for non-competitive bids. Another route for retail investors to buy government bonds is through government securities (gilt) mutual funds. These are mutual funds that, in turn, invest in government securities.The 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 the RBI. The membership of the system is open to entities like Banks, Primary Dealers, Insurance Companies, Mutual Funds, etc., i.e., entities that maintain SGL accounts with the RBI. Hence, statement 2 is correct.The 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 an affordable cost to all market participants. A Depository facilitates holding of securities in electronic form and enables securities transactions to be processed by book entry. Hence, statement 3 is not correct.Source Attribution: Livemint, CDSL India, RBI FAQ