2. SUBMITTED TO- SUBMITTED BY-
PROF. MANOJ ARORA JASPREET KAUR(2515)
SHEETAL(2514)
(ASST. PROF. IN COMMERCE) M.COM-2
3. Money market is a market for short term securities i.e. less than
one year. The term money market does not refer to a particular
place or a bazaar. The transaction of money market may b carried
out through telephones or e-mails. Among people who never meet
one another personally. It is regulated by the SEBI and RBI
5. Money market is just like any other market. It also has a buyer
and sellers in the form of borrowers and lenders.
For every market it deals with commodity. The market deals
with the short term financial instruments like commercial bill,
treasury bills etc.
The price is in the form of the rate of interest. That will depend
upon the demand and supply.
The buyers are the the public, business enterprises, and the
government. The sellers are the RBI, different types of organised
and unorganised banks.
The money market is not located in a particular place . The
negotiations can be carried through telephones, emials.
6. To provide a reasonable access to users of short-term funds to
meet their requirement quickly, adequately at reasonable cost.
Regulate liquidity in the economy
7. Development of trade & industry.
Smooth functioning of commercial banks.
Effective central bank control.
Formulation of suitable monetary policy
8. The Money Market is a short term market that deals
with different money market Instruments.
Money market Instruments:
Call money market
Loan market
Bill market
treasury bill market
commercial bill market
Repurchase agreement
9. The call money market deals with loan of short
duration. It mainly deals with one day loans
which may or may not be renewed the next
day. It refers to the market for a very short
period. The loans are given for a period of 24
hours. The loan period of call money cannot
exceed seven days under any circumstances.
10. As the name suggests this market deals with
short term colleteral loans .i.e. loans backed
by security. In the indian colleteral loan
market, the colleteral loans are provided by
commercial banks against securities shares
and debentures of the govt. etc. when the
loan is repaid the security is returned by the
bank. If the borrower fails to repay the loan
colleteral security becomes the property of
the bank.
11. One type of safest money market Instruments, are short term borrowing
Instruments of the central government of India.
T-bills are short term instruments issued by RBI on behalf of the
Government of India.
TYPES:-
At present, the Government of India issues three types of treasury bills
through auctions, namely, 91-day, 182-day and 364-day. There are no
treasury bills issued by State Governments
Auctioned T-bills( April, 1992):-
91-day T-bills are auctioned every week on Wednesdays, 182-day
and 364-day T-bills are auctioned every alternate week on Wednesdays.
AMOUNT :
Treasury bills are available for a minimum amount of Rs.25,000 and in
multiples of Rs. 25,000.
12. Commercial bills arise in trade transaction .
When goods are sold credit, the seller of
goods writes a bill of exchange and the buyer
of goods accepts the same.
When the trade bills are accepted by the
banks, they are called as commercial bills.
The maturity of 60-90 days depending on the
credit period prevailing in an industry.
13. Repo is a form of overnight borrowing and is used by
those who deal in government securities.
They are usually very short term repurchases agreement,
from overnight to 30 days of more.
The short term maturity and government backing usually
mean that Repos provide lenders with extreamly low ris
14. I :- ORGANISED STRUCTURE
1. Reserve bank of India.
2. Commercial banks
i. Public sector banks
SBI with 7 subsidiaries
Cooperative banks
20 nationalized banks
ii. Private banks
Indian Banks
Foreign banks
3. Development bank
IDBI, IFCI, ICICI, NABARD, LIC, GIC, UTI etc.
16. INADEQUATE INTEGRATION
SHORTAGE OF FUNDS
LACK OF UNIFORM INTEREST RATE
STRUCTURE
UNDER DEVELOPED BILL MARKET
SEASONAL SHORTAGE OF FUNDS
DEFECT CALL MONEY MARKET
17. REGULATION OF INDEGENOUS BANKS
EXPANSION OF BANKING FACILITIES
DEVELOPMENT OF BILL MARKET
WAREHOUSING FACILITIES
UNIFORMITY IN INTEREST RATES
