Question : The Reserve Bank of India (RBI) is responsible for regulating which market?

Option 1: Money market
  

Option 2: Capital market
    

Option 3: Commodity market

  

Option 4: Real estate market

Correct Answer: Money market

Solution : The correct answer is (a) Money market.

The Reserve Bank of India (RBI) is responsible for regulating the money market in India. The money market is a segment of the financial market where short-term borrowing and lending of funds take place. It deals with instruments such as Treasury bills, commercial paper, certificates of deposit, and other short-term debt instruments. As the central bank of India, the RBI has the authority to regulate and supervise the money market to maintain stability, liquidity, and efficient functioning. It formulates policies and sets guidelines for participants in the money market, including banks, non-banking financial institutions, and other financial intermediaries.