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Q23 (IAS/2021) Economy › Economy Current Affairs › Capital market developments Official Key

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?

Result
Your answer: —  ·  Correct: B
Explanation

The correct answer is Option 2 (1 and 2). This is explained by the following points:

  • Statement 1 is correct: Through the RBI Retail Direct Scheme, retail investors can directly open a Gilt Securities Account (demat account) with the RBI to invest in primary issuances of Treasury Bills and Government of India Dated Securities.
  • Statement 2 is correct: The Negotiated Dealing System-Order Matching (NDS-OM) is an anonymous, screen-based electronic order matching system owned by the RBI. it is the secondary market platform for trading in Government Securities.
  • Statement 3 is incorrect: Central Depository Services Ltd (CDSL) was promoted by the Bombay Stock Exchange (BSE) in conjunction with leading banks like SBI, Bank of Baroda, and HDFC Bank. The Reserve Bank of India (RBI) does not promote CDSL; instead, the RBI regulates the banking sector and manages government debt through its own systems.

Since statements 1 and 2 are factually accurate while statement 3 contains an incorrect institutional association, Option 2 is the right choice.

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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. With reference to India, consider the following statements : 1. Retail investors through demat account can invest in 'Treasury Bills' and…
At a glance
Origin: Mixed / unclear origin Fairness: Moderate fairness Books / CA: 7.5/10 · 0/10
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This is a classic 'Market Infrastructure' question mixing current schemes (Retail Direct) with static institutional knowledge. Statements 1 and 2 are standard textbook material (Vivek Singh/Sriram), while Statement 3 tests the 'Who owns whom' framework. The key is distinguishing between the Regulator (RBI) and Market Institutions (Depositories).

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
With reference to India, can retail investors holding demat accounts subscribe to Treasury Bills in the primary market?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Retail Direct Scheme (of RBI): > p. 47
Presence: 5/5
“• Retail individual investors will be able to open a Retail Direct Gilt (RDG) Account with the RBI.• Retail individual investors will be able to purchase Govt. securities in the primary market directly as well as in the secondary market. [But still, they cannot participate in the competitive bidding process].• Retail investors can purchase Central Government Securities (Treasury Bills and Dated Securities), State Govt.”
Why this source?
  • Specifies retail individual investors can open a Retail Direct Gilt (RDG) Account with the RBI.
  • Says retail investors will be able to purchase government securities in the primary market directly as well as in the secondary market.
  • Explicitly lists Central Government Securities including Treasury Bills as purchasable by retail investors; notes a restriction on competitive bidding.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.5 Government Securities > p. 46
Presence: 3/5
“There are four kinds of government securities. • 1. Treasury bills or T-bills: These are short term debt instruments issued by the Government of India for a maturity of less than one year. Treasury bills are zero coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity. For example, a 91-day Treasury bill of ₹100/- (face value) may be issued at say ₹ 98.20, that is, at a discount of say, ₹1.80 and would be redeemed at the face value of ₹100/-. (Treasury bills are traded in money market).• 2.”
Why this source?
  • Defines Treasury Bills as Central Government short-term debt instruments (i.e., government securities).
  • Clarifies the nature of T-bills (zero-coupon, money-market instrument), confirming the instrument type that retail investors can buy via RDG.
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