Indian Economy Capital Markets and Financial Inclusion GS Paper III

Capital Markets and Financial Inclusion — Quick Revision

One-page UPSC revision of money vs capital markets, SEBI, exchanges, depository receipts, masala and green bonds, PMJDY, MUDRA, social security schemes and niche banks.

SyllabusGS III · Mobilisation of resources — capital markets, financial sector regulation and financial inclusion

By 2 min read Updated Oct 2026 #quick revision#economy#capital-markets

A last-week revision sheet for capital markets and financial inclusion. Expect direction-and-status questions: who regulates, who bears risk, who can lend.

Markets and Regulators

ItemFact
Money marketUp to one year; T-bills, CP, CD, call money; RBI
Capital marketLonger term; shares, bonds, debentures; SEBI
SEBI1988 (non-statutory) → SEBI Act, 1992; HQ Mumbai
AppealsSecurities Appellate Tribunal → Supreme Court
FMCMerged with SEBI, September 2015
IRDAI / PFRDAInsurance (1999 Act) / pensions (2013 Act)
FSDC2010; chaired by the Finance Minister

Market Infrastructure

ItemFact
BSE1875; Asia’s oldest; Sensex (30)
NSE1992; Nifty 50
DepositoriesDepositories Act, 1996; NSDL, CDSL
SettlementT+1 completed January 2023

Instruments

InstrumentKey point
ADR / GDRIndian companies’ shares, issued abroad
IDRForeign companies’ shares, issued in India
P-notes (ODIs)Issued by FPIs to unregistered overseas investors
Masala bondsRupee-denominated, issued abroad; investor bears currency risk
Sovereign Green BondsFirst issued January 2023
InvITs / REITsSEBI regulations, 2014

Financial Inclusion

ItemFact
DefinitionRangarajan Committee, 2008
PMJDY28 August 2014
JAMEconomic Survey 2014-15
UPINPCI, 2016
MUDRAApril 2015; SIDBI subsidiary; Shishu, Kishore, Tarun, Tarun Plus
Stand-Up IndiaApril 2016; ₹10 lakh–₹1 crore; SC/ST and women; greenfield
PMJJBY / PMSBY / APYMay 2015; life / accident / pension
Payments bankDeposits up to ₹2 lakh; no lending; Nachiket Mor Committee
Small finance bank75% priority sector lending
FI-Index2021; Access 35%, Usage 45%, Quality 20%
High-yield facts
  • SEBI’s mandate: protect investors, develop and regulate the securities market.
  • Masala bonds shift currency risk to the foreign investor.
  • Payments banks cannot lend; small finance banks can.
  • In the FI-Index, usage carries the most weight.
Traps
  • SEBI was not statutory until 1992.
  • ADR/GDR are issued abroad; IDR is issued in India.
  • MUDRA refinances; banks, NBFCs and MFIs lend.
  • PMJJBY is life cover; PMSBY is accident cover.
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