In the context of Indian economy, 'Open Market Operations' refers to

The correct answer is C because Open Market Operations (OMO) are a key monetary policy tool used by the Reserve Bank of India (RBI). Through OMO, the RBI directly buys or sells government securities (bonds) in the open market. Analysis of options: A) borrowing by scheduled banks from the RBI refers to facilities like the Repo Rate or Marginal Standing Facility, not OMO. OMO involves outright purchase or sale of securities. B) lending by commercial banks to industry and trade is a core function of commercial banks, not a monetary policy tool used by the RBI known as OMO. C) purchase and sale of government securities by the RBI is the precise definition of Open Market Operations. The RBI uses this to inject liquidity (by buying securities) or absorb liquidity (by selling securities) from the banking system, thereby influencing money supply and interest rates. D) None of the above is incorrect because C accurately defines OMO.