CSEET · Economic and Business Environment · Indian Financial Markets
In the Indian foreign exchange market, entities authorised by the RBI to deal in foreign exchange with customers, such as designated banks, are called:
Entities authorised by the RBI to deal in foreign exchange with customers, mainly designated banks, are called Authorised Dealers. Primary Dealers are different, as they deal in government securities, and the other two terms are not the standard names for forex-authorised entities.
- AAuthorised DealersCorrect
- BPrimary Dealers
- CForeign Institutional Brokers
- DMerchant Underwriters
Explanation
The RBI authorises banks and certain other entities as Authorised Dealers (AD) under foreign exchange law to handle forex transactions. Primary Dealers operate in the government securities market, not in customer forex dealing.
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