Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Eco presentation1[2]
1.
2. Definition - 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“.
3. Market for short-term financial
instruments
Maturities of one year or less, and
often 30 days or less
4. Trading takes place in large
financial centres
Companies and investors often
use money market securities
5. Money market instruments have
low risk
Core of the money market
consists of interbank lending
6. To provide a parking place to employ short-term
surplus funds
To provide room for overcoming short term
deficits.
To enable the central bank to influence and
regulate liquidity in the economy through
intervention in this market
7. 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.
8. ORGANISED STRUCTURE
1. Reserve bank of India.
2. DFHI (discount and finance house of India).
3. Commercial banks
i. Public sector banks
SBI with 7 subsidiaries
Cooperative banks
20 nationalised banks
ii. Private banks
Indian Banks
Foreign banks
4. Development bank
IDBI, IFCI, ICICI, NABARD, LIC, GIC, UTI etc
9. II. UNORGANISED SECTOR
1. Indigenous banks
2 Money lenders
3. Chits
4. Nidhis
III. CO-OPERATIVE SECTOR
1. State cooperative
i. Central cooperative banks
Primary Agri credit societies
Primary urban banks
2. State Land development banks
Central land development banks
Primary land development banks
11. Treasur y Bills –
Issued by the Indian government in 1917
They are short-term instruments
One of the safest money market instruments
They have 3-month, 6-month and 1-year
maturity periods
12. Repurchase Agreements –
Also known as repos
Repo transactions are allowed only between
RBI-approved securities
Repurchase agreements are sold by sellers
with a promise
13. Commercial Papers –
First issued in the Indian money market in
1990.
Promissory notes issued by companies and
financial institutions
Issued at a discounted rate of their face value
Commercial papers yield higher returns than T-
bills
14. Cer tificate of Deposit –
First introduced to the money market of India in
1989.
A certificate or deposit is a short-term
borrowing note in the form of a certificate
It usually has a term between 3 months and 5
years
The funds cannot be withdrawn on demand
15. Banker's Acceptance –
The terms for these instruments are usually 90
days, but this period can vary
Companies use the acceptance as a time draft
for financing
16. Call money market –
Maturity period varying from one day to 15 days
Interest rate paid on call money loans is called
Call Rate
17. Money Market Mutual Funds –
In 1997, only one MMMF was in operation,
and that too with very small amount of capital
The RBI has approved the establishment of
very few such funds in India
18. Purchasing power of your money goes down, in
case of up in inflation
Absence of integration
Absence of Bill market
No contact with foreign Money markets.
Limited instruments
Limited secondary market
Limited participants