BANKING AFFAIRS

Detailed explanation-1: -The Reserve Bank regulates financial markets within the overarching statutory framework of the Reserve Bank of India Act, 1934, the Government Securities Act, 2006, Foreign Exchange Management Act, 1999, the Bilateral Netting of Qualified Financial Contracts Act, 2020 and the Payment and Settlement Systems Act, 2007.

Detailed explanation-2: -The RBI is the regulator of the money market in India under sections 45K, 45L, and 45W of the RBI Act (1934). Here are a few guidelines set by the RBI for the money market instruments: 1. Only commercial banks and select all-India financial institutions can issue CDs.

Detailed explanation-3: -RBI regulates the money market. The Money market is the market where the trading between banks and financial institutions for short term loans i.e. for less than 364 days. Certificate of Deposit, Commercial papers, and treasury bills are few of the instruments of the money market.

Detailed explanation-4: -The preamble of the Reserve Bank of India describes its main functions as ‘to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage’.

Detailed explanation-5: -Securities & Exchange Board of India (SEBI) It plays the role of stock market regulators.