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Consider the following statements : a) Capital market is a market for lending and borrowing of short term funds. b) Bombay stock exchange and National stock Exchange are important parts of Money market. c) The GIFT City is to develop a world-class smart city that becomes a global financial hub with the development of an International Financial Services Centre (IFSC). Which of the above statements is/are correct?

Consider the following statements : a) Capital market is a market for lending and borrowing of short term funds. b) Bombay stock exchange and National stock Exchange are important parts of Money market. c) The GIFT City is to develop a world-class smart city that becomes a global financial hub with the development of an International Financial Services Centre (IFSC). Which of the above statements is/are correct? Correct Answer c only

The correct answer is c only.

Key Points

  • Indian Financial System:
    • Financial Markets
    • Financial Instruments
    • Financial Services
    • Financial Institutions
  • Financial Markets:
    • Financial markets refer to any marketplace where the sale and purchase of financial assets of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others. 
    • It includes the Money Market and Capital Market.
  • Money Market :
    • The money market refers to a market for lending and borrowing of short term funds. Hence, statement a is not correct.
    • It is a market for short-term instruments such as trade bills, promissory notes and government securities.
    • It consists of 
      • Organised sector:
        • RBI
        • Commercial banks
        • Co-operative banks
        • Developmental financial institution
        • Investment institution 
      • Unorganised sector :
        • Moneylenders
        • Unregulated non-banking financial intermediaries
  • Capital Market :
    • The Capital market refers to a market for long term funds.
    • Capital markets are composed of primary and secondary markets.
    • The most common capital markets are the stock market and the bond market.
    • Bombay stock exchange and National stock Exchange are important parts of the capital market and are premier exchange markets in India. Hence, statement b is not correct.
  •  Gujarat International Finance Tec-City (GIFT City):
    • GIFT City is being developed as a global financial and IT Services hub, a first of its kind in India, designed to be at par or above with globally benchmarked financial centres. Hence, statement c is correct.
    • GIFT’s Master Plan facilitates Multi Services Special Economic Zone (SEZ) with International Financial Services Centre (IFSC) status, Domestic Finance Centre and the associated Social infrastructure. 

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Related Questions

In the Money market which of the following statement's is/are incorrect?
1. The call money market deals in short-term finance repayable on demand, with a maturity period varying from one day to 14 days.
2. Treasury bills are instruments of short-term borrowing by the Government of India, issued as promissory notes under discount.
3. A reduction in the repo rate helps banks to get money at a cheaper rate.
4. Money market mutual funds invest money in specifically, high-quality and very short maturity based money market instruments.
S1: We must never allow ourselves to lapse into the evil habit of borrowing money from others.
P: We must work hard and earn money, enough for our wants.
Q: Even if we are fortunate enough to possess surplus wealth, we should take care not to lend out money indiscriminately.
R: If borrowing is bad , lending is worse.
S: Borrowing of a habitual nature prevents us from being industrious.
S6: We must not confuse money lending with generosity.

The Proper sequence should be:
Which of the following statement/s is/are reference to money markets?
1. Call money refers to borrowing/lending of funds on overnight basis.
2. Notice money refers to borrowing/lending of funds for a period exceeding 14 days.
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Consider the following statements with respect to IFSC code used in Banking System:A) IFSC Stands for Indian Financial System Code.B) It is an 11-digit alphanumeric Unique Code.C) IFSC is used be the NEFT system to route the message to the destination banks/branches.
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The global financial crisis in 2008 is considered to be the most serious worldwide financial crisis, which started with the sub-prime lending crisis in USA in 2007. The sub-prime lending crisis led to the banking crisis in 2008 with the collapse of Lehman Brothers in 2008. The sub-prime lending refers to the provision of loans to those borrowers who may have difficulties in repaying loans, and it arises because of excess liquidity following the East Asian crisis. Which one of the following sequences shows the correct precedence as per the given passage?
Two lists are given below. List A gives the names Organization, while List B gives the report published by it. Match the two correctly. List A (Organization) List B (Report) i. Bank of International Settlements a. World Development Report ii. Financial Action Task Force b. Global Financial System Report iii. World Bank c. Global Financial Stability Report iv. International Monetary Fund d. Global Money Laundering Report
Which of the following has signed an MoU with FICCI to establish a framework for collaboration for the development of Gujarat International Finance Tec-City (GIFT) IFSC as a world-class FinTech hub?
Which of the following banks has received a license from the IFSC Authority to set up its banking unit at India’s first International Financial Services Centre at GIFT City, Gujarat?