1. INDIAN MONEY MARKET MADE BY: R ICHA

2. Money Market As per RBI definitions “ A market for short term financial assets that are close substitute for money, facilitates the exchange of money in primary and secondary market Deals with lending and borrowing of Short-Term funds less than a year) It deals with cash substitutes and not exactly cash. Financial instruments with high liquidity and short term maturity are traded. It includes all individuals, Institutions and intermediaries There are money market centers in India at Mumbai, Delhi & Kolkata

4. The transactions between borrowers ,lenders and middleman take place through telephone, telegraphs, mail and agents.

6. Significance of Money Market Development of trade & industry. Development of capital market. Smooth functioning of commercial banks. Effective central bank control. Formulation of suitable monetary policy. Non inflationary source of finance to Government.

7. BENEFITS OF MONEY MARKET Large number of players Inter –bank market provides basis for growth A liquid money provides effective source of short term finance to borrowers Makes effective monetary policy Facilitates government market borrowing Encourage development of non-bank entities

8. ROLE OF RBI RBI initiated a number of measures in the 'eighties to widen and deepen the money market.The main initiatives were: In order to impart liquidity to money market instruments and help the development of secondary market in such instruments, the Discount and Finance House of India (DFHI) was set up as a money market institution jointly by the Reserve Bank of India, public sector banks and financial institutions in 1988. To increase the range of money market instruments, Commercial Paper, Certificates of Deposit, and Interbank Participation Certificates were introduced in 1988-89. There is a wide range of instruments now. currently, all the money market interest rates are by and large determined by market forces.

9. Contd. The primary aim of the Reserve Bank of India's operations in the money market is to ensure that the liquidity and short-term interest rates are maintained at levels consistent with the monetary policy objectives of maintaining price stability ensuring adequate flow of credit to productive sectors of the economy bringing about orderly conditions in the foreign exchange market.

10. Indian money Market Indian money market is a mechanism that involves the lending and borrowing of short term funds Reserve Bank of India (central bank of country) is the main component of the money market with vast authority and responsibility Since Globalization of Economy in 1992 Financial institutions have extensively employed various money market instruments for financing in various sectors The performance of Indian money market has been outstanding in past 20 years The RBI has always been playing a major role in regulating and controlling the Indian market by varying CRR, SLR, Repo rates, etc

11. Contd. In order to study the money market of India in detail, we at first need to understand the parameters around which the money market in India revolves The performance of the Indian Money Market is heavily dependent on real interest rate that is the interest rate that is inflation adjusted. Though the money market is free from interest rate ceilings, structural barriers and other institutional factors can be held responsible for creating distortions in India Money Market. Apart from the call market ratt rates, the other interest rates in the Indian Money Market usually do not change in the short run. It is due to this disparity between es, the other interest rates in the Indian Money Market usually do not change in the short run. It is due to this disparity between the opposite forces that is prevalent in the money market in India that a well defined income path cannot be traced. The Indian Money Market involves a wide range of instruments. Here, maturities range from one day to a year, issued by banks and corporate of various sizes.

12. REFORMS IN INDIAN MONEY MARKET Reform in the Money Market in the Nineties In line with the deregulation and liberalization policies of 'nineties, financial sector reform was undertaken in our country early in the reform cycle.The various reforms in the money market: New Instruments New Participants Changes in the operating procedures ofmonetary policy Fine tuning of liquidity monetary policy Technological infrastructure

13. Structure of Indian Money Market I :- ORGANISED STRUCTURE 1. Reserve bank of India. 2. DFHI (discount and finance house of India). 3. Commercial banks i. Public sector banks SBI with 6 subsidiaries Cooperative banks 20 nationalized banks ii. Private banks Indian Banks Foreign banks 4. Development bank IDBI, IFCI, ICICI, NABARD, LIC, GIC, UTI.

14. Contd. UNORGANISED SECTOR 1. Indigenous banks 2 Money lenders 3 chits III. CO-OPERATIVE SECTOR 1. State cooperative central cooperative banks Primary Agri credit societies Primary urban banks 2. State Land development banks central land development banks Primary land development banks

15. INSTRUMENTS IN INDIAN MONEY MARKET Call money / Notice money market –call covernight and short notice(upto 14 days) Commercial paper Certificate of deposit Treasury bills Repurchase agreement Banks acceptance Collateralized borrowing & lending obligation(CBLO)