2. 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.
3. Indian Money Market Sector
Organised Sector
Unorganised
ï Call Money Market
ï Indigenous Bankers
ï Bill Market
ï Commercial Bill Market
ï Treasury Bill Market
ï Certificates of Deposit
Market
ï Commercial Papers Market
ï Money Lenders
4. ï Call Money Market:Principle component of IMM.
Extremely short period loans.
Very short maturity overnight to
fourteen days loans.
ï Purposes:Business purpose between two
individuals
To deal in Stock exchange & bullion markets
Inter-Bank borrowings
To provide greater liquidity
5. ï Bill Market: Specializes in sale & purchase of commercial
bills & treasury bills.
ï§ Features:Post Dated cheques
Short-term borrowings(Promissory notes)
Issued only by RBI
ï Certificates of Deposit Market: Negotiated claim issued by
the Bank in return for a time deposit.
6. ï Features: Most convenient instruments to the depositors.
Offer Maximum liquidity
Ideal requirement for Banks
ï Commercial Papers Market: Short-term instrument for
raising fund by corporates.
ï 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.
7. ï Indigenous Bankers: Generally found in rural areas which are
untouched with modern banking system.
It include: Chit funds,Private firms/Individuals
ï Money Lenders: Mostly Confined to small town &
Villages
Caters to need of farmers, artisans &
Small Traders
Charge exorbitant interest rates