As we all know, the Securities & Exchange Board of India (SEBI) has taken some corrective steps to restrict the functioning of Participatory Notes (P-Notes) in Indian Stock Markets. Why are P-Notes considered dangerous for the financial markets of a country?
($1$) This allows a foreign investor to invest funds without knowing a company's history/ financial health. If the company fails, foreign investors have to lose their money. Govt of India does not want this as this will bring a bad name to the country.
($2$) P-Notes allow foreign investors to buy shares of blue-chip companies without following Know Your Customer (KYC) norms. Hence, the money invested here may not be from a valid and legal source.
($3$) P-Notes are launched to arrange funds only for social schemes. Due to the huge funds available with NRIs for the investment, they send it in bulk. Hence, the cost of such investments is very high, and it is not commercially viable for banks to accept them.

Recently, the RBI and the Securities and Exchange Board of India (SEBI) have taken various steps to control the flow of capital in the Indian economy. Which of the following is/are not included in these steps?
(1) Guidelines have been issued to restrict unregulated overseas investors through 'P-notes'.
(2)$₹$ 60,000 crore out of this fund is being provided to waive the loans on farmers.
(3) Borrowers raising external commercial borrowings of over $20 million would have to park the proceeds overseas for use as foreign currency expenditure. 

The Reserve Bank of India keeps on changing various Ratio/Rates frequently.Why is this done?
(1) To keep inflation under control.
(2) To ensure that Indian Rupee does not lose its market value.
(3) To ensure that banks do not earn huge profits at the cost of public money.

As reported in various newspapers, many banks have revised their interest rates on home loans, car loans and other such loans. Which of the following phenomenon prompted these banks to make such an upward revision in their interest rates?

($1$) RBI has revised the CRR and other such rates upward, which has created a liquidity crunch in the market.

($2$) Stock markets in the country are showing very high fluctuations, as visible through their indexes. As a result, banks have lost a huge amount of money in trading. Banks now want to recover that money by increasing their interest rates.

($3$) Banks need a huge amount of money, as they have to give revised pay to all their employees.

Very often we read in the newspapers about various measures taken up to control the flow of capital in the Indian markets. Who amongst the following is/are the regulators who can control the flow of the same in India?

(1) Indian Bank's Association

(2) RBI

(3) SEBI

Many times we read the term “Hot money” in newspapers. What is/are the characteristics of Hot money?

(1) The term is used for fresh currency notes issued by the RBI.

(2) It is the fund that flows in the market to take advantage of high-interest rates.

(3) It is the fund which is thrown in the market to create an imbalance in the stock markets.