In a bid to prevent the possibility of manipulation in the prices of securities, especially government securities (G-Secs),.....has changed the methodology used by debt market players, including banks and primary dealers, for their valuation.

BANKING GENERAL KNOWLEDGE

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In a bid to prevent the possibility of manipulation in the prices of securities, especially government securities (G-Secs),____has changed the methodology used by debt market players, including banks and primary dealers, for their valuation.

A	Ministry of Finance
B	Ministry of Corporate Affairs
C	Securities and Exchange Board of India
D	Reserve Bank of India

Explanation:

Detailed explanation-1: -The auction procedure followed by RBI is the commonly used multiple-price sealed-bid auction. The bidders electronically submit sealed competitive bids specifying the price they are willing to pay for a particular amount of debt security.

Detailed explanation-2: -The minimum amount for bidding will be Rs. 10, 000 (face value) and in multiples in Rs. 10, 000. The maximum amount for a single non-competitive bid only for the auctions of GOI dated securities should not exceed Rs.

Detailed explanation-3: -Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Secs of longer maturities and selling equal amounts of G-Secs of shorter maturities.

Detailed explanation-4: -What is Liquidity Adjustment Facility (LAF)? A LAF is a monetary policy tool used in India by the RBI through which it injects or absorbs liquidity into or from the banking system. It was introduced as a part of the outcome of the Narasimham Committee on Banking Sector Reforms of 1998.

There is 1 question to complete.