Commercial p123

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\sect\sectd\pard\plain
{\phpg\posx2080\pvpg\posy1420\absw11227\absh8373 \f10 \fs78 \cf87 \fi3912 \f10
\fs78 \cf87 CONTENTS
\par}{\phpg\posx2080\pvpg\posy1420\absw11227\absh8373 \sl-961 \par\f10 \fs78 \cf87
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 What}{\fs57 \cf125 is}
{\fs57 \cf125 Money}{\fs57 \cf125 Market? }
\par}{\phpg\posx2080\pvpg\posy1420\absw11227\absh8373 \sl-921 \f10 \fs78 \cf87
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Features}{\fs57 \cf125 of}
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Objective}{\fs57 \cf125 of}
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Importance}{\fs57 \cf125
of}{\fs57 \cf125 Money}{\fs57 \cf125 Market? }
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Composition}{\fs57 \cf125
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Instrument}{\fs57 \cf125
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Structure}{\fs57 \cf125 of}
{\fs57 \cf125 Indian}{\fs57 \cf125 Money}{\fs57 \cf125 Market? }
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Disadvantage}{\fs57 \cf125
of}{\fs57 \cf125 Money}{\fs57 \cf125 Market? }\par
}
\fs78 \cf87 Continued{\field{\*\fldinst SYMBOL 188 \\f Symbol }}{\field{\*\fldinst
SYMBOL 188 \\f Symbol }}.
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Characteristic}{\fs57 \cf125
features}{\fs57 \cf125 of}{\fs57 \cf125 a}{\fs57 \cf125 developed }
\fi539 {\fs57 \cf125 money}{\fs57 \cf125 Market? }
{\dn006 \fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Recent}{\fs57 \cf125
development}{\fs57 \cf125 in}{\fs57 \cf125 Money}{\fs57 \cf125 Market? }
{\fs37 \cf125 {\f63 \u61656\'3f}}{\fs57 \cf125 Summary }\par
}
{\phpg\posx2080\pvpg\posy1420\absw14388\absh3594 \f10 \fs77 \cf87 \fi974 \f10 \fs77
\cf87 1! What is Money Market?
{\fs49 \cf125 As}{\fs49 \cf125 per}{\fs49 \cf125 RBI}{\fs49 \cf125
definitions}{\fs49 \cf125 "}{\fs49 \cf125 A}{\fs49 \cf125 market}{\fs49
\cf125 for}{\fs49 \cf125 short}{\fs49 \cf125 terms }
\fi539 {\fs49 \cf125 financial}{\fs49 \cf125 assets}{\fs49 \cf125 that}{\fs49
\cf125 are}{\fs49 \cf125 close}{\fs49 \cf125 substitute}{\fs49 \cf125
for }
\fi539 {\fs49 \cf125 money,}{\fs49 \cf125 facilitates}{\fs49 \cf125 the}
{\fs49 \cf125 exchange}{\fs49 \cf125 of}{\fs49 \cf125 money}{\fs49 \cf125
in }
\fi539 {\fs49 \cf125 primary}{\fs49 \cf125 and}{\fs49 \cf125 secondary}{\fs49
\cf125 market"market".. }\par
}
{\phpg\posx2080\pvpg\posy6315\absw272\absh364 \f10 \fs32 \cf117 \f10 \fs32 \cf117
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\phpg\posx2620\pvpg\posy6083\absw13788\absh3752 \f10 \fs49 \cf125 \f10 \fs49
\cf125 The money market is a mechanism that deals
with the lending and borrowing of short term
funds (less than one year)year)..
A segment of the financial market in which
financial instruments with high liquidity and very
short maturities are tradedtraded.. \par
}
SYMBOL 188 \\f Symbol }}.
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 It}{\fs57 \cf125 doesn't}
{\fs57 \cf125 actually}{\fs57 \cf125 deal}{\fs57 \cf125 in}{\fs57 \cf125
cash}{\fs57 \cf125 or}{\fs57 \cf125 money }
\fi539 {\fs57 \cf125 but}{\fs57 \cf125 deals}{\fs57 \cf125 with}{\fs57 \cf125
substitute}{\fs57 \cf125 of}{\fs57 \cf125 cash}{\fs57 \cf125 like}{\fs57 \cf125
trade }
\fi540 {\fs57 \cf125 bills,}{\fs57 \cf125 promissory}{\fs57 \cf125 notes}
{\fs57 \cf125 &}{\fs57 \cf125 govt}{\fs57 \cf125 papers }
\fi539 {\fs57 \cf125 which}{\fs57 \cf125 can}{\fs57 \cf125 converted}{\fs57
\cf125 into}{\fs57 \cf125 cash}{\fs57 \cf125 without}{\fs57 \cf125 any }
\fi539 {\fs57 \cf125 loss}{\fs57 \cf125 at}{\fs57 \cf125 low}{\fs57 \cf125
transaction}{\fs57 \cf125 costcost. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 It}{\fs57 \cf125 includes}
{\fs57 \cf125 all}{\fs57 \cf125 individual,}{\fs57 \cf125 institution}
{\fs57 \cf125 and }
\fi540 {\fs57 \cf125 intermediariesintermediaries.. }\par
}
2 ! Features of Money Market? \par
}
{\f63 \u61550\'3f} \par
}
\cf125 It is a market purely for shortshort--termsterms funds or
financial assets called near moneymoney..
It deals with financial assets having a maturity
period less than one year onlyonly..
In Money Market transaction can not take place
formal like stock exchange, only through oral
communication, relevant document and written
communication transaction can be donedone.. \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
SYMBOL 188 \\f Symbol }}..
{\fs50 \cf125 Transaction}{\fs50 \cf125 have}{\fs50 \cf125 to}{\fs50 \cf125
be}{\fs50 \cf125 conducted}{\fs50 \cf125 without}{\fs50 \cf125 the }
{\fs50 \cf125 help}{\fs50 \cf125 of}{\fs50 \cf125 brokersbrokers.. }
{\fs50 \cf125 It}{\fs50 \cf125 is}{\fs50 \cf125 not}{\fs50 \cf125 a}{\fs50
\cf125 single}{\fs50 \cf125 homogeneous}{\fs50 \cf125 market,}{\fs50
\cf125 it }
{\fs50 \cf125 comprises}{\fs50 \cf125 of}{\fs50 \cf125 several}{\fs50 \cf125
submarket}{\fs50 \cf125 like}{\fs50 \cf125 call}{\fs50 \cf125 money }
{\fs50 \cf125 market,}{\fs50 \cf125 acceptance}{\fs50 \cf125 &}{\fs50 \cf125
bill}{\fs50 \cf125 marketmarket.. }
{\fs50 \cf125 The}{\fs50 \cf125 component}{\fs50 \cf125 of}{\fs50 \cf125
Money}{\fs50 \cf125 Market}{\fs50 \cf125 are}{\fs50 \cf125 the }
{\fs50 \cf125 commercial}{\fs50 \cf125 banks,}{\fs50 \cf125 acceptance}
{\fs50 \cf125 houses}{\fs50 \cf125 &}{\fs50 \cf125 NBFC }
{\fs50 \cf125 (Non(Non--bankingbanking}{\fs50 \cf125 financial}{\fs50 \cf125
companies)companies).. }\par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
\cf87 3 ! Objective of Money Market?
{\fs50 \cf125 To}{\fs50 \cf125 provide}{\fs50 \cf125 a}{\fs50 \cf125 parking}
{\fs50 \cf125 place}{\fs50 \cf125 to}{\fs50 \cf125 employ}{\fs50 \cf125 short}
{\fs50 \cf125 term }
{\fs50 \cf125 surplus}{\fs50 \cf125 fundsfunds.. }
{\fs50 \cf125 To}{\fs50 \cf125 provide}{\fs50 \cf125 room}{\fs50 \cf125
for}{\fs50 \cf125 overcoming}{\fs50 \cf125 short}{\fs50 \cf125 term }
{\fs50 \cf125 deficits}{\fs50 \cf125 . }
{\fs50 \cf125 To}{\fs50 \cf125 enable}{\fs50 \cf125 the}{\fs50 \cf125
central}{\fs50 \cf125 bank}{\fs50 \cf125 to}{\fs50 \cf125 influence}{\fs50
\cf125 and }
{\fs50 \cf125 regulate}{\fs50 \cf125 liquidity}{\fs50 \cf125 in}{\fs50 \cf125
the}{\fs50 \cf125 economy}{\fs50 \cf125 through}{\fs50 \cf125 its }
{\fs50 \cf125 intervention}{\fs50 \cf125 in}{\fs50 \cf125 this}{\fs50 \cf125
marketmarket.. }
{\fs50 \cf125 To}{\fs50 \cf125 provide}{\fs50 \cf125 a}{\fs50 \cf125 reasonable}
{\fs50 \cf125 access}{\fs50 \cf125 to}{\fs50 \cf125 users}{\fs50 \cf125 of}
{\fs50 \cf125 shortshort-- }
{\fs50 \cf125 term}{\fs50 \cf125 funds}{\fs50 \cf125 to}{\fs50 \cf125 meet}
{\fs50 \cf125 their}{\fs50 \cf125 requirement}{\fs50 \cf125 quickly, }
{\fs50 \cf125 adequately}{\fs50 \cf125 at}{\fs50 \cf125 reasonable}{\fs50 \cf125
costcost.. }\par
}
{\phpg\posx2083\pvpg\posy1266\absw13042\absh803 \f10 \fs71 \cf87 \f10 \fs71 \cf87 4
! Importance of Money Market? \par
}
o
\par}{\phpg\posx2080\pvpg\posy3796\absw293\absh4743 \sl-475 \par\f10 \fs38 \cf117 o

\par
}
\cf125 Development of trade & industryindustry.
Development of capital marketmarket..
Smooth functioning of commercial banks.
Effective central bank controlcontrol.
Formulation of suitable monetary policypolicy..
\par}{\phpg\posx2620\pvpg\posy3566\absw13932\absh5706 \sl-950 \f10 \fs59 \cf125 Non
inflationary source of finance to
governmentgovernment. \par
}
\fs71 \cf87 5 ! Composition of Money Market?
{\fs57 \cf125 Money}{\fs57 \cf125 Market}{\fs57 \cf125 consists}{\fs57 \cf125
of}{\fs57 \cf125 a}{\fs57 \cf125 number}{\fs57 \cf125 of}{\fs57 \cf125 subsub--
}
\fi539 {\fs57 \cf125 markets}{\fs57 \cf125 which}{\fs57 \cf125 collectively}
{\fs57 \cf125 constitute}{\fs57 \cf125 the }
\fi540 {\fs57 \cf125 money}{\fs57 \cf125 marketmarket..}{\fs57 \cf125 They}{\fs57
\cf125 are, }
{\dn006 \fs37 \cf117 {\f63 \u61558\'3f}}{\fs57 \cf125 Call}{\fs57 \cf125 Money}
{\fs57 \cf125 Market }
{\dn006 \fs37 \cf117 {\f63 \u61558\'3f}}{\fs57 \cf125 Commercial}{\fs57 \cf125
bills}{\fs57 \cf125 market}{\fs57 \cf125 or}{\fs57 \cf125 discount }
\fi539 {\fs57 \cf125 market }
{\dn006 \fs37 \cf117 {\f63 \u61558\'3f}}{\fs57 \cf125 Acceptance}{\fs57 \cf125
market }
{\dn006 \fs37 \cf117 {\f63 \u61558\'3f}}{\fs57 \cf125 Treasury}{\fs57 \cf125
bill}{\fs57 \cf125 market }\par
}
\cf87 6 ! Instrument of Money Market?
{\fs49 \cf125 A}{\fs49 \cf125 variety}{\fs49 \cf125 of}{\fs49 \cf125
instrument}{\fs49 \cf125 are}{\fs49 \cf125 available}{\fs49 \cf125 in}
{\fs49 \cf125 a}{\fs49 \cf125 developed }
\fi540 {\fs49 \cf125 money}{\fs49 \cf125 marketmarket..}{\fs49 \cf125 In}
{\fs49 \cf125 India}{\fs49 \cf125 till}{\fs49 \cf125 19861986}{\fs49
\cf125 ,, only}{\fs49 \cf125 a}{\fs49 \cf125 few }
\fi540 {\fs49 \cf125 instrument}{\fs49 \cf125 were}{\fs49 \cf125
availableavailable. }
{\fs49 \cf125 They}{\fs49 \cf125 were }\par
}
{\phpg\posx2080\pvpg\posy7099\absw165\absh1122 \f10 \fs32 \cf117 {\cf117
\f0\fs42 \bullet }\f10 \fs32 \cf117
{\cf117 \f0\fs42 \bullet } \par
}
{\phpg\posx2080\pvpg\posy9384\absw165\absh396 \f10 \fs32 \cf117 {\cf117 \f0\fs42
\bullet }\f10 \fs32 \cf117 \par
}
\cf125 Treasury bills
Money at call and short notice in the call loan
market.
Commercial bills, promissory notes in the bill
market. \par
}
\fs77 \cf87 New instrument
\par}{\phpg\posx1840\pvpg\posy1583\absw13338\absh7750 \sl-892 \par\f10 \fs77
\cf87 \fi523 {\fs49 \cf125 Now,}{\fs49 \cf125 in}{\fs49 \cf125 addition}{\fs49
\cf125 to}{\fs49 \cf125 the}{\fs49 \cf125 above}{\fs49 \cf125 the}{\fs49 \cf125
following}{\fs49 \cf125 new }
\fi539 {\fs49 \cf125 instrument}{\fs49 \cf125 are}{\fs49 \cf125 available: }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Commercial}{\fs49 \cf125
papers. }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Certificate}{\fs49 \cf125
of}{\fs49 \cf125 deposit. }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 InterInter--bank ban}
{\fs49 \cf125 k}{\fs49 \cf125 participation}{\fs49 \cf125 certificates. }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Repo}{\fs49 \cf125
instrument }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Banker's}{\fs49 \cf125
Acceptance }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Repurchase}{\fs49 \cf125
agreement }
{\dn006 \fs32 \cf117 {\f63 \u61558\'3f}}{\fs49 \cf125 Money}{\fs49 \cf125 Market}
{\fs49 \cf125 mutual}{\fs49 \cf125 fund }\par
}
certificates. \par
}
\fs71 \cf87 Treasury Bills (T
}{\phpg\posx2620\pvpg\posy1275\absw13932\absh8027 \f10 \fs71 \cf87 \fi1886 (T--
Bills)Bills)
\par}{\phpg\posx2620\pvpg\posy1275\absw13932\absh8027 \sl-744 \par\par\f10 \fs71
\cf87 {\fs50 \cf125 (T(T--bills)bills)}{\fs50 \cf125 are}{\fs50 \cf125 the}{\fs50
\cf125 most}{\fs50 \cf125 marketable}{\fs50 \cf125 money}{\fs50 \cf125 market }
{\fs50 \cf125 securitysecurity.. }
{\fs50 \cf125 They}{\fs50 \cf125 are}{\fs50 \cf125 issued}{\fs50 \cf125 with}
{\fs50 \cf125 threethree--month,month,}{\fs50 \cf125 sixsix--monthmonth }
{\fs50 \cf125 and}{\fs50 \cf125 one}{\fs50 \cf125 -}{\fs50 \cf125 year}{\fs50
\cf125 maturities}{\fs50 \cf125 . }
{\fs50 \cf125 TT--billsbills}{\fs50 \cf125 are}{\fs50 \cf125 purchased}{\fs50
\cf125 for}{\fs50 \cf125 a}{\fs50 \cf125 price}{\fs50 \cf125 that}{\fs50 \cf125
is}{\fs50 \cf125 less}{\fs50 \cf125 than }
{\fs50 \cf125 their}{\fs50 \cf125 par(face)}{\fs50 \cf125 valuevalue;;}
{\fs50 \cf125 when}{\fs50 \cf125 they}{\fs50 \cf125 mature,}{\fs50 \cf125
the }
{\fs50 \cf125 government}{\fs50 \cf125 pays}{\fs50 \cf125 the}{\fs50 \cf125
holder}{\fs50 \cf125 the}{\fs50 \cf125 full}{\fs50 \cf125 par}{\fs50 \cf125
valuevalue. }
{\fs50 \cf125 TT--BillsBills}{\fs50 \cf125 are}{\fs50 \cf125 so}{\fs50 \cf125
popular}{\fs50 \cf125 among}{\fs50 \cf125 money}{\fs50 \cf125 market }
{\fs50 \cf125 instruments}{\fs50 \cf125 because}{\fs50 \cf125 of}{\fs50
\cf125 affordability}{\fs50 \cf125 to}{\fs50 \cf125 the }
{\fs50 \cf125 individual}{\fs50 \cf125 investorsinvestors.. }\par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
\fs70 \cf87 Certificate of deposit (CD)
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs56 \cf125 A}{\fs56 \cf125 CD}
{\fs56 \cf125 is}{\fs56 \cf125 a}{\fs56 \cf125 time}{\fs56 \cf125 deposit}
{\fs56 \cf125 with}{\fs56 \cf125 a}{\fs56 \cf125 bankbank}{\fs56 \cf125 .. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs56 \cf125 Like}{\fs56 \cf125 most}
{\fs56 \cf125 time}{\fs56 \cf125 deposit,}{\fs56 \cf125 funds}{\fs56
\cf125 can}{\fs56 \cf125 not }
\fi540 {\fs56 \cf125 withdrawn}{\fs56 \cf125 before}{\fs56 \cf125 maturity}{\fs56
\cf125 without}{\fs56 \cf125 paying }
\fi540 {\fs56 \cf125 a}{\fs56 \cf125 penalty}{\fs56 \cf125 . }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs56 \cf125 CD's}{\fs56 \cf125 have}
{\fs56 \cf125 specific}{\fs56 \cf125 maturity}{\fs56 \cf125 date,}{\fs56
\cf125 interest }
\fi540 {\fs56 \cf125 rate}{\fs56 \cf125 and}{\fs56 \cf125 it}{\fs56 \cf125
can}{\fs56 \cf125 be}{\fs56 \cf125 issued}{\fs56 \cf125 in}{\fs56
\cf125 any }
\fi540 {\fs56 \cf125 denominationdenomination.. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs56 \cf125 The}{\fs56 \cf125 main}
{\fs56 \cf125 advantage}{\fs56 \cf125 of}{\fs56 \cf125 CD}{\fs56 \cf125 is}
{\fs56 \cf125 their}{\fs56 \cf125 safetysafety.. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs56 \cf125 Anyone}{\fs56 \cf125 can}
{\fs56 \cf125 earn}{\fs56 \cf125 more}{\fs56 \cf125 than}{\fs56 \cf125
a}{\fs56 \cf125 saving }\par
}
account interestinterest.. \par
}
\fs77 \cf87 Commercial paper (CP)
\cf87 {\fs49 \cf125 CP}{\fs49 \cf125 is}{\fs49 \cf125 a}{\fs49 \cf125 short}
{\fs49 \cf125 term}{\fs49 \cf125 unsecured}{\fs49 \cf125 loan}{\fs49 \cf125
issued}{\fs49 \cf125 by}{\fs49 \cf125 a }
{\fs49 \cf125 corporation}{\fs49 \cf125 typically}{\fs49 \cf125 financing}
{\fs49 \cf125 day}{\fs49 \cf125 to}{\fs49 \cf125 day }
{\fs49 \cf125 operationoperation.. }
{\fs49 \cf125 CP}{\fs49 \cf125 is}{\fs49 \cf125 very}{\fs49 \cf125 safe}
{\fs49 \cf125 investment}{\fs49 \cf125 because}{\fs49 \cf125 the}{\fs49 \cf125
financial }
{\fs49 \cf125 situation}{\fs49 \cf125 of}{\fs49 \cf125 a}{\fs49 \cf125
company}{\fs49 \cf125 can}{\fs49 \cf125 easily}{\fs49 \cf125 be}{\fs49 \cf125
predicted }
{\fs49 \cf125 over}{\fs49 \cf125 a}{\fs49 \cf125 few}{\fs49 \cf125
monthsmonths.. }
{\fs49 \cf125 Only}{\fs49 \cf125 company}{\fs49 \cf125 with}{\fs49 \cf125
high}{\fs49 \cf125 credit}{\fs49 \cf125 rating}{\fs49 \cf125 issues }
{\fs49 \cf125 CP'sCP's. }\par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
Repurchase agreement (Repos) \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
\cf125 Repo is a form of overnight borrowing and is
used by those who deal in government
securitiessecurities..
They are usually very short term repurchases
agreement, from overnight to 30 days of moremore..
\par}{\phpg\posx2620\pvpg\posy3566\absw13932\absh5808 \sl-806 \f10 \fs50 \cf125 The
short term maturity and government
backing usually mean that Repos provide
lenders with extreamly low riskrisk..
Repos are safe collateral for loansloans.. \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
\fs78 \cf87 Banker's Acceptance
{\fs50 \cf125 A}{\fs50 \cf125 banker's}{\fs50 \cf125 acceptance}{\fs50 \cf125
(BA)}{\fs50 \cf125 is}{\fs50 \cf125 a}{\fs50 \cf125 shortshort--termterm }
{\fs50 \cf125 credit}{\fs50 \cf125 investment}{\fs50 \cf125 created}{\fs50
\cf125 by}{\fs50 \cf125 a}{\fs50 \cf125 nonnon--financialfinancial }
{\fs50 \cf125 firmfirm.. }
{\fs50 \cf125 BA's}{\fs50 \cf125 are}{\fs50 \cf125 guaranteed}{\fs50 \cf125
by}{\fs50 \cf125 a}{\fs50 \cf125 bank}{\fs50 \cf125 to}{\fs50 \cf125
make }
{\fs50 \cf125 payment}{\fs50 \cf125 . }
{\fs50 \cf125 Acceptances}{\fs50 \cf125 are}{\fs50 \cf125 traded}{\fs50 \cf125
at}{\fs50 \cf125 discounts}{\fs50 \cf125 from}{\fs50 \cf125 face }
{\fs50 \cf125 value}{\fs50 \cf125 in}{\fs50 \cf125 the}{\fs50 \cf125 secondary}
{\fs50 \cf125 marketmarket.. }
{\fs50 \cf125 BA}{\fs50 \cf125 acts}{\fs50 \cf125 as}{\fs50 \cf125 a}
{\fs50 \cf125 negotiable}{\fs50 \cf125 time}{\fs50 \cf125 draft}{\fs50 \cf125
for}{\fs50 \cf125 financing }
{\fs50 \cf125 imports,}{\fs50 \cf125 exports}{\fs50 \cf125 or}{\fs50 \cf125
other}{\fs50 \cf125 transactions}{\fs50 \cf125 in}{\fs50 \cf125 goodsgoods.. }
{\fs50 \cf125 This}{\fs50 \cf125 is}{\fs50 \cf125 especially}{\fs50 \cf125
useful}{\fs50 \cf125 when}{\fs50 \cf125 the}{\fs50 \cf125 credit }
{\fs50 \cf125 worthiness}{\fs50 \cf125 of}{\fs50 \cf125 a}{\fs50 \cf125
foreign}{\fs50 \cf125 trade}{\fs50 \cf125 partner}{\fs50 \cf125 is }
{\fs50 \cf125 unknownunknown.. }\par
}
\cf87 7 ! Structure of Indian Money
\fi5011 Market?
{\b \fs43 \cf125 I}{\b \fs43 \cf125 ::}{\b \fs43 \cf125 --}{\b \fs43 \cf125
ORGANISED}{\b \fs43 \cf125 STRUCTURE }
\fi897 {\fs43 \cf125 1.}{\fs43 \cf125 Reserve}{\fs43 \cf125 bank}{\fs43 \cf125
of}{\fs43 \cf125 India. }
\fi897 {\fs43 \cf125 2.}{\fs43 \cf125 DFHI}{\fs43 \cf125 (discount}{\fs43 \cf125
and}{\fs43 \cf125 finance}{\fs43 \cf125 house}{\fs43 \cf125 of}{\fs43 \cf125
India). }
\fi960 {\fs43 \cf125 3.}{\fs43 \cf125 Commercial}{\fs43 \cf125 banks }
\fi2157 {\fs43 \cf125 i.}{\fs43 \cf125 Public}{\fs43 \cf125 sector}{\fs43 \cf125
banks }
\fi4108 {\fs43 \cf125 SBI}{\fs43 \cf125 with}{\fs43 \cf125 7}{\fs43 \cf125
subsidiaries }
\fi4108 {\fs43 \cf125 Cooperative}{\fs43 \cf125 banks }
\fi4108 {\fs43 \cf125 20}{\fs43 \cf125 nationalised}{\fs43 \cf125 banks }
\fi2157 {\fs43 \cf125 ii.}{\fs43 \cf125 Private}{\fs43 \cf125 banks }
\fi4108 {\fs43 \cf125 Indian}{\fs43 \cf125 Banks }
\fi4108 {\fs43 \cf125 Foreign}{\fs43 \cf125 banks }
\fi959 {\fs43 \cf125 4.}{\fs43 \cf125 Development}{\fs43 \cf125 bank }
\fi2157 {\fs43 \cf125 IDBI,}{\fs43 \cf125 IFCI,}{\fs43 \cf125 ICICI,}{\fs43
\cf125 NABARD,}{\fs43 \cf125 LIC,}{\fs43 \cf125 GIC,}{\fs43 \cf125 UTI}
{\fs43 \cf125 etc. }\par
}
\fs77 \cf87 Continued{\field{\*\fldinst SYMBOL 188 \\f Symbol }}..
{\b \fs49 \cf125 II.}{\b \fs49 \cf125 UNORGANISED}{\b \fs49 \cf125 SECTOR }
\fi1761 {\fs49 \cf125 1.}{\fs49 \cf125 Indigenous}{\fs49 \cf125 banks }
\fi1761 {\fs49 \cf125 2}{\fs49 \cf125 Money}{\fs49 \cf125 lenders }
\fi1761 {\fs49 \cf125 3.}{\fs49 \cf125 Chits }
\fi1761 {\fs49 \cf125 4.}{\fs49 \cf125 Nidhis }
{\b \fs49 \cf125 III.}{\b \fs49 \cf125 CO--OPERATIVECO OPERATIVE}{\b \fs49 \cf125
}{\b \fs49 \cf125 S}{\b \fs49 \cf125 ECTOR }
\fi1761 {\fs49 \cf125 1.}{\fs49 \cf125 State}{\fs49 \cf125 cooperative }
\fi2812 {\fs49 \cf125 i.}{\fs49 \cf125 central}{\fs49 \cf125 cooperative}
{\fs49 \cf125 banks }
\fi4387 {\fs49 \cf125 Primary}{\fs49 \cf125 Agri}{\fs49 \cf125 credit}{\fs49
\cf125 societies }
\fi4387 {\fs49 \cf125 Primary}{\fs49 \cf125 urban}{\fs49 \cf125 banks }
\fi1761 {\fs49 \cf125 2.}{\fs49 \cf125 State}{\fs49 \cf125 Land}{\fs49 \cf125
development}{\fs49 \cf125 banks }
\fi3338 {\fs49 \cf125 central}{\fs49 \cf125 land}{\fs49 \cf125 development}{\fs49
\cf125 banks }
\fi3338 {\fs49 \cf125 Primary}{\fs49 \cf125 land}{\fs49 \cf125 development}{\fs49
\cf125 banks }\par
}
\cf87 8 ! Disadvantage of Money Market
\cf87 {\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 Purchasing}{\fs57
\cf125 power}{\fs57 \cf125 of}{\fs57 \cf125 your}{\fs57 \cf125 money}{\fs57
\cf125 goes }
\fi539 {\fs57 \cf125 down,}{\fs57 \cf125 in}{\fs57 \cf125 case}{\fs57 \cf125 of}
{\fs57 \cf125 up}{\fs57 \cf125 in}{\fs57 \cf125 inflation. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 Absence}{\fs57 \cf125 of}
{\fs57 \cf125 integration. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 Absence}{\fs57 \cf125 of}
{\fs57 \cf125 Bill}{\fs57 \cf125 market. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 No}{\fs57 \cf125 contact}
{\fs57 \cf125 with}{\fs57 \cf125 foreign}{\fs57 \cf125 Money}{\fs57 \cf125
markets. }
{\dn006 \fs37 \cf117 {\f63 \u61550\'3f}}{\fs57 \cf125 Limited}{\fs57 \cf125
instruments. }
secondary}{\fs57 \cf125 market. }
participants. }\par
}
\fs72 \cf87 9 ! Characteristic features of a
\fi1622 developed money Market?
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Highly}{\fs57 \cf125
organaised}{\fs57 \cf125 banking}{\fs57 \cf125 system }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Presence}{\fs57 \cf125 of}
{\fs57 \cf125 central}{\fs57 \cf125 bank }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Availability}{\fs57 \cf125
of}{\fs57 \cf125 proper}{\fs57 \cf125 credit}{\fs57 \cf125 instrument }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Existence}{\fs57 \cf125 of}
{\fs57 \cf125 sub }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Ample}{\fs57 \cf125
resources }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Existence}{\fs57 \cf125 of}
{\fs57 \cf125 secondary}{\fs57 \cf125 market }
{\dn006 \fs37 \cf117 {\f63 \u61553\'3f}}{\fs57 \cf125 Demand}{\fs57 \cf125 and}
{\fs57 \cf125 supply}{\fs57 \cf125 of}{\fs57 \cf125 fund }\par
}
sub--marketmarket \par
}
\fs71 \cf87 10 ! Recent development in
\fi4161 Money Market
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Integration}{\fs50 \cf125
of}{\fs50 \cf125 unorganised}{\fs50 \cf125 sector}{\fs50 \cf125 with}{\fs50
\cf125 the }
\fi539 {\fs50 \cf125 organised}{\fs50 \cf125 sector }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Widening}{\fs50 \cf125 of}
{\fs50 \cf125 call}{\fs50 \cf125 Money}{\fs50 \cf125 market }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Introduction}{\fs50 \cf125
of}{\fs50 \cf125 innovative}{\fs50 \cf125 instrument }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Offering}{\fs50 \cf125 of}
{\fs50 \cf125 Market}{\fs50 \cf125 rates}{\fs50 \cf125 of}{\fs50 \cf125
interest }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Promotion}{\fs50 \cf125
of}{\fs50 \cf125 bill}{\fs50 \cf125 culture }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Entry}{\fs50 \cf125 of}
{\fs50 \cf125 Money}{\fs50 \cf125 market}{\fs50 \cf125 mutual}{\fs50 \cf125
funds }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Setting}{\fs50 \cf125 up}
{\fs50 \cf125 of}{\fs50 \cf125 credit}{\fs50 \cf125 rating}{\fs50 \cf125
agencies }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Adoption}{\fs50 \cf125 of}
{\fs50 \cf125 suitable}{\fs50 \cf125 monetary}{\fs50 \cf125 policy }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Establishment}{\fs50 \cf125
of}{\fs50 \cf125 DFHI }
{\dn006 \fs32 \cf117 {\f63 \u61692\'3f}}{\fs50 \cf125 Setting}{\fs50 \cf125 up}
{\fs50 \cf125 of}{\fs50 \cf125 security}{\fs50 \cf125 trading}{\fs50 \cf125
corporation}{\fs50 \cf125 of}{\fs50 \cf125 India }\par
}
ltd. (STCI) \par
}
\cf87 11 ! Summary
{\dn006 \fs34 \cf117 {\f63 \u61550\'3f}}{\fs52 \cf125 The}{\fs52 \cf125 money}
{\fs52 \cf125 market}{\fs52 \cf125 specializes}{\fs52 \cf125 in}{\fs52 \cf125
debt}{\fs52 \cf125 securities }
\fi539 {\fs52 \cf125 that}{\fs52 \cf125 mature}{\fs52 \cf125 in}{\fs52 \cf125
less}{\fs52 \cf125 than}{\fs52 \cf125 one}{\fs52 \cf125 yearyear.. }
{\dn006 \fs34 \cf117 {\f63 \u61550\'3f}}{\fs52 \cf125 Money}{\fs52 \cf125
market}{\fs52 \cf125 securities}{\fs52 \cf125 are}{\fs52 \cf125 very}{\fs52
\cf125 liquid,}{\fs52 \cf125 and}{\fs52 \cf125 are }
\fi539 {\fs52 \cf125 considered}{\fs52 \cf125 very}{\fs52 \cf125 safesafe..}
{\fs52 \cf125 As}{\fs52 \cf125 a}{\fs52 \cf125 result,}{\fs52 \cf125 they}
{\fs52 \cf125 offer}{\fs52 \cf125 a }
\fi539 {\fs52 \cf125 lower}{\fs52 \cf125 return}{\fs52 \cf125 than}{\fs52 \cf125
other}{\fs52 \cf125 securitiessecurities. }
{\dn006 \fs34 \cf117 {\f63 \u61550\'3f}}{\fs52 \cf125 The}{\fs52 \cf125 easiest}
{\fs52 \cf125 way}{\fs52 \cf125 for}{\fs52 \cf125 individuals}{\fs52 \cf125 to}
{\fs52 \cf125 gain}{\fs52 \cf125 access}{\fs52 \cf125 to }
\fi539 {\fs52 \cf125 the}{\fs52 \cf125 money}{\fs52 \cf125 market}{\fs52 \cf125
is}{\fs52 \cf125 through}{\fs52 \cf125 a}{\fs52 \cf125 money}{\fs52 \cf125
market }
\fi539 {\fs52 \cf125 mutual}{\fs52 \cf125 fundfund.. }
{\dn006 \fs34 \cf117 {\f63 \u61550\'3f}}{\fs52 \cf125 TT--bill}{\fs52 \cf125
sbills are}{\fs52 \cf125 shortshort--termterm}{\fs52 \cf125 government}{\fs52
\cf125 securities }
\fi539 {\fs52 \cf125 that}{\fs52 \cf125 mature}{\fs52 \cf125 in}{\fs52 \cf125
one}{\fs52 \cf125 year}{\fs52 \cf125 or}{\fs52 \cf125 less}{\fs52 \cf125 from}
{\fs52 \cf125 their}{\fs52 \cf125 issue }
\fi539 {\fs52 \cf125 datedate.. }
{\dn006 \fs34 \cf117 {\f63 \u61550\'3f}}{\fs52 \cf125 TT--bill}{\fs52 \cf125
sbills are}{\fs52 \cf125 considered}{\fs52 \cf125 to}{\fs52 \cf125 be}
{\fs52 \cf125 one}{\fs52 \cf125 of}{\fs52 \cf125 the}{\fs52 \cf125
safest }\par
}
investmentsinvestments. \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
{\f63 \u61550\'3f} \par
}
\cf87 Continued{\field{\*\fldinst SYMBOL 188 \\f Symbol }}{\field{\*\fldinst SYMBOL
188 \\f Symbol }}.
{\fs48 \cf125 A}{\fs48 \cf125 certificate}{\fs48 \cf125 of}{\fs48 \cf125
deposit}{\fs48 \cf125 (CD)}{\fs48 \cf125 is}{\fs48 \cf125 a}{\fs48 \cf125 time}
{\fs48 \cf125 deposit}{\fs48 \cf125 with}{\fs48 \cf125 a }
{\fs48 \cf125 bankbank. }
{\fs48 \cf125 Annual}{\fs48 \cf125 percentage}{\fs48 \cf125 yield}{\fs48 \cf125
(APY)}{\fs48 \cf125 takes}{\fs48 \cf125 into}{\fs48 \cf125 account }
{\fs48 \cf125 compound}{\fs48 \cf125 interest,}{\fs48 \cf125 annual}{\fs48
\cf125 percentage}{\fs48 \cf125 rate}{\fs48 \cf125 (APR) }
{\fs48 \cf125 does}{\fs48 \cf125 notnot. }
{\fs48 \cf125 CDs}{\fs48 \cf125 are}{\fs48 \cf125 safe,}{\fs48 \cf125 but}{\fs48
\cf125 the}{\fs48 \cf125 returns}{\fs48 \cf125 aren't}{\fs48 \cf125 great,}
{\fs48 \cf125 and}{\fs48 \cf125 your }
{\fs48 \cf125 money}{\fs48 \cf125 is}{\fs48 \cf125 tied}{\fs48 \cf125 up}
{\fs48 \cf125 for}{\fs48 \cf125 the}{\fs48 \cf125 length}{\fs48 \cf125 of}
{\fs48 \cf125 the}{\fs48 \cf125 CD}{\fs48 \cf125 . }
{\fs48 \cf125 Commercial}{\fs48 \cf125 paper}{\fs48 \cf125 is}{\fs48 \cf125
an}{\fs48 \cf125 unsecured,}{\fs48 \cf125 shortshort--termterm}{\fs48 \cf125
loan }
{\fs48 \cf125 issued}{\fs48 \cf125 by}{\fs48 \cf125 a}{\fs48 \cf125
corporationcorporation..}{\fs48 \cf125 Returns}{\fs48 \cf125 are}{\fs48 \cf125
higher}{\fs48 \cf125 than}{\fs48 \cf125 TT- }
{\fs48 \cf125 bills}{\fs48 \cf125 because}{\fs48 \cf125 of}{\fs48 \cf125 the}
{\fs48 \cf125 higher}{\fs48 \cf125 default}{\fs48 \cf125 riskrisk. }
{\fs48 \cf125 Banker's}{\fs48 \cf125 acceptance}{\fs48 \cf125 (BA)}{\fs48
\cf125 are}{\fs48 \cf125 negotiable}{\fs48 \cf125 time}{\fs48 \cf125
draft }
{\fs48 \cf125 for}{\fs48 \cf125 financing}{\fs48 \cf125 transactions}{\fs48
\cf125 in}{\fs48 \cf125 goodsgoods. }
{\fs48 \cf125 Repurchase}{\fs48 \cf125 agreement}{\fs48 \cf125 (repos)}{\fs48
\cf125 are}{\fs48 \cf125 a}{\fs48 \cf125 form}{\fs48 \cf125 of }\par
}
overnight
securitiessecurities. \par
}
borrowing \par
}
backed \par
}
by \par
}
government \par
}
}

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