CMA Intermediate · Financial Management and Business Data Analytics · Money Market
Which institution acts as the apex regulator of the Indian money market and conducts liquidity operations through the Liquidity Adjustment Facility?
The Reserve Bank of India is the apex regulator of the Indian money market. It manages short-term liquidity through the Liquidity Adjustment Facility using repo and reverse repo operations. SEBI, IRDAI and NSE do not perform this role, since they regulate securities, insurance and exchange trading respectively.
- ASecurities and Exchange Board of India
- BReserve Bank of IndiaCorrect
- CInsurance Regulatory and Development Authority of India
- DNational Stock Exchange of India
Explanation
The RBI regulates the money market and manages system liquidity through repo and reverse repo operations under the LAF. SEBI regulates securities markets, IRDAI regulates insurers, and NSE is only an exchange. Hence only the RBI fits the description.
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