Structure of Indian Money Market - Chart ↓
The entire coin marketplace inward Republic of Republic of India tin hold upwards divided into ii parts. They are organised coin marketplace in addition to the unorganized coin market. The unorganised coin marketplace tin too hold upwards known every bit an unauthorized coin market. Both of these components contain several constituents. The next nautical chart volition assistance y'all inward agreement the organisational construction of the Indian coin market.
Components, SubMarkets of Indian Money Market ↓
After studying inward a higher house organisational nautical chart of the Indian coin marketplace it is necessary to sympathise diverse components or sub markets inside it. They are explained below.
- Call Money Market : It an of import sub marketplace of the Indian coin market. It is too known every bit coin at telephone telephone in addition to coin at curt notice. It is too called inter banking concern loan market. In this marketplace coin is demanded for extremely curt period. The duration of such transactions is from few hours to xiv days. It is basically located inward the industrial in addition to commercial locations such every bit Mumbai, Delhi, Calcutta, etc. These transactions assistance stock brokers in addition to dealers to fulfill their fiscal requirements. The charge per unit of measurement at which coin is made available is called every bit a telephone telephone rate. Thus charge per unit of measurement is fixed yesteryear the marketplace forces such every bit the need for in addition to render of money.
- Commercial Bill Market : It is a marketplace for the curt term, self liquidating in addition to negotiable coin marketplace instrument. Commercial bills are used to finance the receive in addition to storage of agriculture in addition to industrial goods inward domestic in addition to unusual markets. The commercial nib marketplace inward Republic of Republic of India is nonetheless underdeveloped.
- Treasury Bill Market : This is a marketplace for sale in addition to buy of curt term regime securities. These securities are called every bit Treasury Bills which are promissory notes or fiscal bills issued yesteryear the RBI on behalf of the Government of India. There are ii types of treasury bills. (i) Ordinary or Regular Treasury Bills in addition to (ii) Ad Hoc Treasury Bills. The maturity menstruation of these securities attain from every bit depression every bit xiv days to every bit high every bit 364 days. They accept pop off real pop lately due to high degree of security involved inward them.
- Market for Certificate of Deposits (CDs) : It is in ane trial again an of import segment of the Indian coin market. The certificate of deposits is issued yesteryear the commercial banks. They are worth the value of Rs. 25 lakh in addition to inward multiple of Rs. 25 lakh. The minimum subscription of CD should hold upwards worth Rs. 1 Crore. The maturity menstruation of CD is every bit depression every bit iii months in addition to every bit high every bit 1 year. These are the transferable investment musical instrument inward a coin market. The regime initiated a marketplace of CDs inward lodge to widen the attain of instruments inward the coin marketplace in addition to to provide a higher flexibility to investors for investing their curt term money.
- Market for Commercial Papers (CPs) : It is the marketplace where the commercial papers are traded. Commercial newspaper (CP) is an investment musical instrument which tin hold upwards issued yesteryear a listed fellowship having working working capital missive of the alphabet to a greater extent than than or equal to Rs. five cr. The CPs tin hold upwards issued inward multiples of Rs. 25 lakhs. However the minimum subscription should at to the lowest degree hold upwards Rs. 1 cr. The maturity menstruation for the CP is minimum of iii months in addition to maximum vi months. This was introcuced yesteryear the regime inward 1990.
- Short Term Loan Market : It is a marketplace where the curt term loan requirements of corporates are met yesteryear the Commercial banks. Banks provide curt term loans to corporates inward the shape of cash credit or inward the shape of overdraft. Cash credit is given to industrialists in addition to overdraft is given to businessmen.
