Indian Money Market

By

Gopal Kumar (13DM041)

IMIS,PGDM(2013-2015)

Money Market-Refers to the total financial institutions which deal with short term loans in an economy within a year.

It is entirely different from capital market.

Indian Money MarketOrganised Sector Unorganised Sector

Call Money MarketBill Market Commercial Bill Market Treasury Bill MarketCertificates of Deposit

MarketCommercial Papers

Market

Indigenous Bankers

Money Lenders

Call Money Market:Principle component of IMM. Extremely short period loans. Very short maturity overnight to fourteen days loans.

Purposes:Business purpose between two individuals

To deal in Stock exchange & bullion markets Inter-Bank borrowings To provide greater liquidity

Bill Market: Specializes in sale & purchase of commercial bills & treasury bills.

Features:Post Dated cheques Short-term borrowings(Promissory notes) Issued only by RBI

Certificates of Deposit Market: Negotiated claim issued by the Bank in return for a time deposit.

Features: Most convenient instruments to the depositors.

Offer Maximum liquidity Ideal requirement for BanksCommercial Papers Market: Short-term instrument

for raising fund by corporates.Features:Unsecured Promissory notes of short-

term maturity Driven by the demand for CP by comm.Banks Basically driven by the banks surplus fund position.

Indigenous Bankers: Generally found in rural areas which are untouched with modern banking system.

It include: Chit funds,Private firms/Individuals

Money Lenders: Mostly Confined to small town & Villages Caters to need of farmers, artisans & Small Traders Charge exorbitant interest rates

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