Features providing by Indian Money Market

1. FEATURES OF INDIAN
MONEY MARKET
TERM-II
Economic Environment of
Business
PRESENTED BY:-
Kunmun Biswal-20DM020
Debipriya Banerjee-20DM034

2. CONTENTS
Features
of Indian
money
market
ORGAN-
IZED AND
UNORGA
NI-ZED
SECTOR
AB-
SENCE
OF
INTEGR
ATION
DIVERSIT
Y IN
MONEY
RATE OF
INTREST
SEASON-
AL
STRIN-
GENCY
OF FUNDS
ABSENCE
OF BILL
MARKET
CALL
MONEY
MARKET
CERTI-
FICATES
OF
DEPOSIT
COMMER-
CIAL
PAPERS
MARKETS
LIMITED
INSTRU-
MENTS

3. FEATURES OF INDIAN MONEY MARKET
Organized and Unorganized sectors
• Indian money market Consist of organised and unorganised sector
 Organized sector
• Consist of-Reserve bank of India, commercial bank
• Mainly composed of the commercial banks, cooperative banks
 Unorganised sector
• Comprises of indigenous bankers

4. Absence of integration
• Lack of integration between various sub markets, institutions
• RBI has full control over organised sector
• RBI can’t control unorganized segment

5. Diversity in money rate of interest
• Interest rate variations
• The money rates of interest also differ between different
regions
• Immobility of funds from one section to another

6. Seasonal stringency of funds
• The demand for money in Indian money market is a
seasonal in nature.
• From the end of April, the demand for more begins decrease
till the end of October.

7. Absence of bill market
• A well organized bill market is essential for the smooth working of
the credit system.
• The reasons for this situation are historical.
• In 1952, RBI started making efforts in this direction.
• A new proper bills introduced in 1970
• There has been substantial improvement since then.

8. Call money market
• Deals with day to day surplus funds of banks
• “Call Money”
• “Notice Money”
• “Term Money”
• Participants in the Indian call money market- Co-
operative Banks

9. Certificates of deposit
• CD is a money market instrument
• Governed by RBI
• Issued by Scheduled commercial banks
• Issued at a minimum price Rs 1 Lakh
• Based on funding requirements

10. Commercial papers market
• Introduced- 1990
• CP is a short term debt instrument
• It is an unsecured money market instrument

11. Limited instruments
• The supply of money market instruments are very
limited.
• Considering the varied requirements of short term funds.
• There should be well diversified mix of money market.
• To meet the varied requirement of borrowers.

12. THANK YOU