Q. Consider the following statements regarding “Market Stabilization Scheme (MSS)”:
1.It was introduced in 2014.
2.It has features of both, SLR and CRR.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B

Explanation: Market Stabilization Scheme (MSS) was introduced in 2004. Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills.

The mobilized cash is held in a separate government account with the Reserve Bank. The instrument thus has features of both, SLR and CRR.

Source: Ramesh Singh