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INDIAN MONEY MARKET 
SUMMARY:
The seventh largest and second most populous country in the world, India has long beenconsidered a country of unrealized potential. A new spirit of economic freedom is nowstirring in the country, bringing sweeping changes in its wake. A series of ambitiouseconomic reforms aimed at deregulating the country and stimulating foreign investment hasmoved India firmly into the front ranks of the rapidly growing Asia Pacific region andunleashed the latent strengths of a complex and rapidly changing nation.India's process of economic reform is firmly rooted in a political consensus that spans her diverse political parties. India's democracy is a known and stable factor, which has taken deeproots over nearly half a century. Importantly, India has no fundamental conflict between its political and economic systems. Its political institutions have fostered an open society withstrong collective and individual rights and an environment supportive of free economicenterprise.India's time tested institutions offer foreign investors a transparent environment thatguarantees the security of their long term investments. These include a free and vibrant press,a judiciary which can and does overrule the government, a sophisticated legal and accountingsystem and a user friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity. It accounts for over 75%of its Gross Domestic Product and offers considerable scope for joint ventures andcollaborations.Today, India is one of the most exciting emerging money markets in the world. Skilledmanagerial and technical manpower that match the best available in the world and a middleclass whose size exceeds the population of the USA or the European Union, provide Indiawith a distinct cutting edge in global competition. The average turnover of the money market in India is over 
Rs. 40,000 crores daily
. This ismore than 3 percents of the total money supply in the Indian economy and 6 percent of thetotal funds that commercial banks have let out to the system. This implies that
2 percent of the annual GDP of India
gets traded in the money market in just one day. Even though themoney market is many times larger than the capital market, it is not even fraction of the dailytrading in developed markets.
 
INDIAN MONEY MARKET 
1) Meaning of Money Market:
Money market refers to the market where money and highly liquid marketablesecurities are bought and sold having a maturity period of one or less than one year. It is not a place like the stock market but an activity conducted by telephone. The money marketconstitutes a very important segment of the Indian financial system.The highly liquid marketable securities are also called as ‘ money market instruments’like treasury bills, government securities, commercial paper, certificates of deposit, callmoney, repurchase agreements etc.The major player in the money market are Reserve Bank of India (RBI), Discountand Finance House of India (DFHI), banks, financial institutions, mutual funds, government, big corporate houses. The basic aim of dealing in money market instruments is to fill the gapof short-term liquidity problems or to deploy the short-term surplus to gain income on that.
2) Definition of Money Market:
According to the McGraw Hill Dictionary of Modern Economics,
“money marketis the term designed to include the financial institutions which handle the purchase, sale, andtransfers of short term credit instruments. The money market includes the entire machineryfor the channelizing of short-term funds. Concerned primarily with small business needs for working capital, individual’s borrowings, and government short term obligations, it differsfrom the long term or capital market which devotes its attention to dealings in bonds,corporate stock and mortgage credit.”
According to the Reserve Bank of India,
“money market is the centre for dealing,mainly of short term character, in money assets; it meets the short term requirements of  borrowings and provides liquidity or cash to the lenders. It is the place where short termsurplus investible funds at the disposal of financial and other institutions and individuals are bid by borrowers’ agents comprising institutions and individuals and also the governmentitself.”
According to the Geoffrey,
“money market is the collective name given to thevarious firms and institutions that deal in the various grades of the near money.”
 
INDIAN MONEY MARKET 
3) Objectives of Money Market:
A well developed money market serves the following objectives:
Providing an equilibrium mechanism for ironing out short-term surplus and deficits.
Providing a focal point for central bank intervention for the influencing liquidity inthe economy.
Providing access to users of short-term money to meet their requirements at areasonable price.
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