Which of the following provides liquidity to money market instrument by creating a secondary market where they can be traded?

Discount and Finance House of India

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National Securities Depository Limited

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State Bank of India

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Reserve Bank of India

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Over the Counter Exchange of India

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Solution

The correct option is A Discount and Finance House of India
Based on the Vaghul Commitiee's recommendation's the Reserve Bank of India had jointly set up with the public sector banks and other all India financial institutions,the Discount and Finance House of India (DFHI) to deal in money market instruments in order to provide liquidity in the money market.

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P L C

By purchasing government securities in the open market, the central bank intends to release greater money supply in the market.

List-I	List-II
(i) National Stock Exchange	(a) Marks the beginning of the process of dematerialisation of shares of the participating companies.
(ii) National Securities Depository Limited	(b) Facilitation of equal access to investors across the country.
(iii) Securities and Exchange Board of India	(c) To foster the development of an active secondary market for Government Securities.
(iv) Securities Trading Corporation of India	(d) Abolition of Capital issues control and retaining the sale authority for new capital issues

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