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Money Market & its intruments.pptx
- 1. MONEY MARKET AND ITS INSTRUMENTS SUBMITTED TO DR RISHI CHAUDHARY PRESENTED BY MOKSHIT 2105130 PRANJAL 2105016 INSTITUTE OF MANGEMENT STUDIES AND RESEARCH MAHARSHI DAYANAND UNIVERSITY
- 2. FINANCIAL SYSTEM FINANCIAL MARKET MONEY MARKET INSTRUMENTS TOPICS TO BE COVERED
- 3. FINANCIAL SYSTEM FINANCIAL MARKET MONEY MARKET INSTRUMENTS TOPICS TO BE COVERED FINANCIAL SYSTEM FINANCIAL MARKET MONEY MARKET INSTRUMENTS
- 5. THREE MAIN PART OF FINANCIAL SYSTEM FINANCIAL ASSETS FINANCIAL INSTITUTION FINANCIAL MARKET
- 6. NABARD FINANCIAL ASSETS • Financial Instruments or Securities • More Liquid than Tangible assets
- 7. Provides Financial Services to Customers FINANCIAL INSTITUTIONS
- 8. FINANCIAL MARKET Banks Business Firms Financial Market Households
- 10. MONEY FINANCIAL MARKET • To start Business • To grow Business • To cover unexpected expenditure • To earn Interest • To earn Dividend
- 11. MONEY Financial Market Money Market Capital Market Short term Long term Upto 364 Days More than 364 Days
- 12. Financial Market Money Market Capital Market Short term Long term Up to 364 Days More than 364 Days Unorganised Organised No Regulatory Body Regulated by RBI • Indigenous Bankers • Unregulated Non bank Financial Intermediaries
- 13. Money Market Unorganised Organised No Regulatory Body Regulated by RBI Benefits of having a Regulatory Body • Protect Investors and Depositors • Preventing Financial Fraud and abuse • Promote stability and confidence in the Financial system
- 14. ORGANISED MONEY MARKET PARTICIPANTS Money Market Unorganised Organised No Regulatory Body Regulated by RBI Benefits of having a Regulatory Body • Protect Investors and Depositors • Preventing Financial Fraud and abuse • Promote stability and confidence in the Financial system
- 15. ORGANISED MONEY MARKET PARTICIPANTS RBI BANKS NBFCs Top Rated Corporates Individuals
- 16. ORGANISED MONEY MARKET PARTICIPANTS • BANK • NBFCs • ALL • ALL • ALL EXCEPT RBI • ALL EXCEPT RBI RBI BANKS NBFCs Top Rated Corporates Individuals
- 17. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper
- 18. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper Securities • Government issue securities at discounted price • At the time of maturity government give us face value
- 19. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper Securities • Government issue securities at discounted price • At the time of maturity government give us face value Face Value – 1lakh Discounted Price – 90k
- 20. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper Securities • Government issue securities at discounted price • At the time of maturity government give us face value Securities @Discounted Price Treasury bill 14 days 91 days 182 days 364 days X
- 21. Treasury Bill
- 22. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper Securities @Discounted Price Treasury bill 14 days 91 days 182 days 364 days Cash management bill X Less than 90 Days
- 23. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper MONEY MARKET • Issued by Bank • Raise Money for 364 days or less in exchange of this Multiple of 1 lakh Minimum amount 1 lakh 7 - 364 days
- 24. • A Bill of Exchange used to Finance working Capital requirements • Short Term • Negotiable Certificate of Deposit
- 25. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper • A Bill of Exchange used to Finance working Capital requirements • Short Term • Negotiable
- 26. Commercial Bill
- 27. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper • Also known as Overnight Borrowing Market • When bank need money for 1 to 14 days, they can borrow money in call money market
- 28. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper Schedule Commercial Banks Co operative Banks Selected AIFIs (EX- IDBI) Selected Insurance Companies (ex LIC) Selected Mutual Funds LEND BORROW • Also known as Overnight Borrowing Market • When bank need money for 1 to 14 days, they can borrow money in call money market Call Money 1 day Notice Money 1-14 days
- 29. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper MONEY MARKET TOP RATED CORPORATES ALL EXCEPT RBI
- 30. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Mutual Fund Market Commercial Paper MONEY MARKET TOP RATED CORPORATES ALL EXCEPT RBI Security Commercial paper 7 days – 364 days Multiple of 1 lakh Minimum amount 5 lakh
- 31. Commercial Paper
- 32. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Money Market Mutual Fund Commercial Paper Invests in short term debt securities Certificates of Deposit Commercial Paper Treasury Bill • Launched in 1992 in India • To provide Investors with a safe and liquid investment option • Offer better returns than traditional savings accounts
- 33. Money Market Instruments Treasury Bill Cash management bill Certificate of Deposit Commercial Bill Call Money Money Market Mutual Fund Commercial Paper Invests in short term debt securities Certificates of Deposit Commercial Paper Treasury Bill Low risk, Low ROI • Launched in 1992 in India • To provide Investors with a safe and liquid investment option • Offer better returns than traditional savings accounts