All About Money Market in India – Definitions, Features, Instruments

Hello and welcome to exampundit. Here is a PDF on All the information about Money Market in India. The PDF covers all the Money Market Instruments, Features and their definitions along with the concept of the Money Market In India.

Money Market in India

The Money Market is a very important segment of the Indian financial system. It is the market where short term monetary assets are dealt in to raise short term requirements of funds and/ or to park short term surpluses. The main characteristic of the Money Market is the liquid nature.

The money market is the market which deals with short term funds in the economy. It refers to the institutional arrangements facilitating borrowings and lending of short term funds.

Participants of money market in India:

Following are the institutions which can take part in money market:

  • Central and State Government
  • Public sector undertaking
  • Private sector companies
  • Non-banking financial institutions
  • Mutual funds
  • Insurance companies
  • Primary dealers

BASIC FUNCTIONS OF MONEY MARKET in India:

  1. Provide efficient mechanism of liquidating for commercial banks, non-banking financial institutions, business firms and other
  2. Bridge between short term surpluses and
  3. Provide a realistic price for short term
  4. Provide a platform for the Central bank of the country to control and manage the money supply.

Money Market instruments mainly include Government securities, securities issued by private sector and banking institutions—

  1. Government Securities
  2. Money at Call and Short Notice
  3. Bills Rediscounting
  4. Inter-Bank Participation
  5. Money Market Mutual Funds
  6. Call Money Market and Short-term Deposit Market
  7. Treasury Bills
  8. Certificates of Deposits
  9. Inter-Corporate Deposits
  10. Commercial Bills
  11. Commercial Paper
  12. Gilt-edged (Government ) Securities
  13. Repo Market

 

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