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MONEY MARKET
BY SHEKINAH ROY ROHANN PRADHAN MUNTAZIR ABBAS SHAHJAHAN MALIK PARAG BANDHATE SHIVANI NANDWANA
INTRODUCTION
The Money Market is a market for lending and borrowing of short term funds. It deals in funds and financial instruments having a maturity period of one day to one year. It covers money and financial assets that are close substitutes of money. The instruments in the money market are of short term nature and highly liquid.
It is not a single market but a collection of different markets. It is a wholesale market for short term debt instruments. DEFINITION : Money Market refers to a mechanism whereby on the one hand borrowers manage to obtain short term loanable funds and on the other, lenders succeed in getting creditworthy borrowers for their
SHORTAGE OF FUNDS IN THE MONEY MARKET SEASONAL STRINGENCY OF FUNDS INADEQUATE BANKING FACILITIES INADEQUATE CREDIT INSTRUMENTS
STRUCTURE
ORGANISED SECTOR
CALL MONEY MARKET
REPO MARKET
UNORGANISED SECTOR
Indigenous Bankers Money Lenders Chit Funds
It helps in allocation of short term funds through inter bank transactions and money market instruments.
It also provides funds in non inflationary way to the government to meet its deficits.
RBI
Banks
Financial Institutions
Government
Corporates
Institutional Players
CONCLUSION
The detailed analysis of the Indian Money Market suggests that the Money Market in India does not satisfy the criteria of a developed money market but shows symptoms of an under developed money market. Moreover in terms of organisation, resources,elasticity and stability it is not comparable to foreign money markets.
It lacks number of sub-markets and does not attract foreign funds. But the deficiencies of the Indian Money Market are slowly but steadily overcome by the policy measures undertaken by the RBI from time to time.