Indian Money Market Detailed Description

1. Indian Money Market
By
Gopal Kumar (13DM041)
IMIS,PGDM(2013-2015)

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
 Call Money Market
 Indigenous Bankers
 Bill Market
 Commercial Bill Market
 Treasury Bill Market
 Certificates of Deposit
Market
 Commercial Papers Market
 Money Lenders

4.  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

5.  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.

6.  Features: Most convenient instruments to the depositors.
Offer Maximum liquidity
Ideal requirement for Banks
 Commercial 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.

7.  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

8. Thank You