UPSC Prelims 1995 · General Studies
Question 4: Economy and Social Development
To prevent recurrence of scams in Indian Capital Market, the Government of India has assigned regulatory powers to
AnswerThe answer is (a).
SEBI, the Securities and Exchange Board of India, began in 1988 as an administrative body and was given statutory powers by the SEBI Act of 1992, after the securities scam of 1992 exposed how weak the existing controls were. It regulates stock exchanges, brokers, mutual funds and the issue of securities, and protects investors. The RBI regulates banks and the money market, not the capital market. Remember: capital market regulator is SEBI.
Why each option is right or wrong
- (a) Right: the statutory regulator of the securities market since 1992.
- (b) The RBI regulates banks, credit and money; it does not regulate stock exchanges and securities issues.
- (c) SBI is a commercial bank, not a regulator.
- (d) IDBI was a development finance institution lending to industry; it had no regulatory powers over the capital market.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1995, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.