Official Answer Key & Detailed Solution
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Correct Answer: Option (D) — 2 and 3 only
Concept & Option Breakdown
Standard Reference VerifiedStatement 1 is incorrect: The Liquidity Adjustment Facility (LAF) window of the RBI is primarily accessible to Scheduled Commercial Banks and standalone Primary Dealers, not general Non-Banking Financial Companies (NBFCs). Statement 2 is correct: Foreign Institutional Investors (FIIs) / Foreign Portfolio Investors (FPIs) are permitted to invest in Government Securities (G-Secs) subject to limits prescribed periodically by the RBI and the Government of India. Statement 3 is correct: Recognized stock exchanges in India, such as NSE and BSE, operate dedicated debt segments and platforms (e.g., NDS-OM and retail debt market platforms) for trading fixed-income instruments and debt securities.
NBFCs lack direct central banking liquidity safety nets like normal LAF repos (available to banks/PDs), eliminating options containing 1.
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