INTRODUCTION

What is Money Market?

As per RBI definitions A market for short terms financial assets that are close
substitute for money, facilitates the exchange of money in primary and secondary
market.
The money market is a mechanism that deals ith the lending and borroing of short!
term funds "less than one year#.
A segment of the financial market in hich financial instruments ith high li$uidity
and %ery short maturities are traded.
It doesn&t actually deal in cash or money but deals ith substitute of cash like trade
bills, promissory notes ' go%t papers hich can con%erted into cash ithout any loss
at lo transaction cost.
It includes all indi%idual, institution and intermediaries.
Features of Money Market
It is a market purely for short!terms funds or financial assets called near
money.
It deals ith financial assets ha%ing a maturity period less than one year only.
1
In (oney (arket transaction cannot take place formal like stock exchange,
only through oral communication, rele%ant document and ritten
communication transaction can be done.
Transactions ha%e to be conducted ithout the help of brokers.
It is not a single homogeneous market, it comprises of se%eral submarket like
call money market, acceptance ' bill market.
The components of (oney (arket are the commercial banks, acceptance
houses ' )B*+ ")on!banking financial companies
Objective of Money Market
To pro%ide a parking place to employ short!term surplus funds.
To pro%ide room for o%ercoming short!term deficits.
To enable the central bank to influence and regulate li$uidity in the economy
through its inter%ention in this market.
To pro%ide a reasonable access to users of short!term funds to meet their
re$uirement $uickly, ade$uately at reasonable cost.
2
Importance of Money Market
,e%elopment of trade ' industry.
,e%elopment of capital market.
-mooth functioning of commercial banks.
.ffecti%e central bank control.
*ormulation of suitable monetary policy.
)on!inflationary source of finance to go%ernment.
Composition of Money Market
(oney (arket consists of a number of sub!markets, hich collecti%ely
constitute the money market. They are,
+all (oney (arket
+ommercial bills market or discount market
Acceptance market
Treasury bill market
Instrument of Money Market
A %ariety of instruments are a%ailable in a de%eloped money market. In India till /012,
only a fe instrument ere a%ailable.
They ere
3 Treasury bills
3
3 (oney at call and short notice in the call loan market.
3 +ommercial bills, promissory notes in the bill market.
New instrument
)o, in addition to the abo%e the folloing ne instruments are a%ailable4
+ommercial papers.
+ertificate of deposit.
Banker5s Acceptance
Repurchase agreement
(oney (arket mutual fund
CALL MONEY MARE!
+all money market is that part of the national money market here the day to day
surplus funds, mostly of banks are traded in.
They are highly li$uid, their li$uidity being exceeded only by cash.
The loans made in this market are of the short!term nature.
Banks borro from other banks in order to meet a sudden demand for funds, large
payments, large remittances, and to maintain cash or li$uidity ith the RBI. Thus, to
the extent that calls money is used in India for the purpose of ad6ustment of reser%es.
4
Participants in the call money market
-cheduled commercial banks
)on!scheduled commercial banks
*oreign banks
-tate, district and urban, cooperati%e banks
,iscount and *inance 7ouse of India ",*7I#
-ecurities Trading +orporation of India "-T+I#.
The ,*7I and -T+I borro as ell as lend, like
Banks and primary dealers, in the call market.
CALL RA!E"
The rate of interest paid on call loans is knon as call rate.
+all rate is highly %ariable from day to day, often from hour to hour.
It is %ery sensiti%e to changes in demand for and supply of call loans.
.ligible participants are free to decide on interest rates in call8notice money
market.
+alculation of interest payable ould be based on *I((,A&s "*ixed Income
(oney (arket and ,eri%ati%es Association of India#.
5
CALL RA!E IN IN#IA
+A99 RAT. I) I),IA has reached as high a le%el as :;< in ,ecember /0=:.
It is an alarming le%el for any short!term rate of interest to reach, and as bank
defaulted in a ma6or ay in respect of cash and li$uidity re$uirements at that time due
to the prohibiti%ely high cost of call money, it became necessary to regulate call rates
ithin reasonable limits.
Indian Banks& Association "IBA# in /0=: fixed a ceiling of />< on the le%el of call
rate.
The IBA loered this ceiling of />< to /?.>< in (arch /0=2, /; < in @une /0==,
and 1.2< in (arch /0=1, and /;.;< in April /01;.
And current call rate in India is 1<.
There are no to call rates in India4 one, the interbank call rate, and the other, the
lending rate of ,*7I.
,.A9I)A -.--IB)
,eals in the call8notice money market can be done up to >.;; pm on eekdays
and ?.:; pm on -aturdays or as specified by RBI from time to time.
9B+ATIB) B* +A99 (B).C (ARD.T I) I),IA
(umbai, +alcutta, +hennai, ,elhi, and Ahmadabad.
6
!REA"$RY %ILL" MARE!
Treasury bills "TBs#, offer short!term in%estment opportunities, generally up to one
year.
They are thus useful in managing short!term li$uidity.
Types of treasury bills through auctions
0/! ,ay, /1?! day, :2E! day, and /E! day TBs
&'( #AY !REA"$RY %ILL
Treasury bills are not self!li$uidating in the ay genuine trade bills are, although the
degree of their li$uidity is greater than that of trade bills.
If e ere to arrange short!term financial instruments according to their li$uidity, the
descending order ould be cash, call loans, treasury bills and commercial bills.
Treasury bills are highly li$uid because there cannot be a better guarantee of
repayment then the one gi%en by the go%ernment and because the central bank of
country is alays illing to purchase or discount them.
As unlike ordinary trade bills, treasury bills are claims against the go%ernment, they
do not re$uire any gardening or further endorsement or acceptance
Important )ua*ities of treasury bi**s
7igh li$uidity
Absence of risk of default
Ready a%ailability
7
Assured yield
9o transaction cost
.ligibility for inclusion in statutory li$uidity ratio "-9R#
)egligible capital depreciation
!Y+E" OF !REA"$RY %ILL"
Brdinary TBs
Ad hoc TBs
The ordinary TBs are issued to the public and the RBI for enabling the go%ernment to
meet the needs of supplementary short!term finance.
TB, also knon as ad hocs in short, has been discontinued through the signing of to
agreements beteen the go%ernment and the RBI.
The instrument of ad hoc Treasury bill and the system of issuing it ere introduced in
India in /0:=.
Ao%ernment shall maintain ith the RBI a cash balance of not less than Rs.>;crore on
*ridays and Rs.E crore on other days free of obligation to pay interest.
Fhene%er the balance falls belo these minimums, the go%ernment account ould be
replenished by the creation of ad hocs in fa%our of the RBI.
The go%ernment issued these bills to replenish their cash balance. They also pro%ide a
medium to the state go%ernments, semi!go%ernments, and foreign central banks to
in%est their temporary surpluses.
',-( #AY" !REA"$RY %ILL" MARE!
8
Fith a %ie to idening the short!term money market, and to pro%iding more outlets
for temporary surplus fund, the authorities in India had introduced, in )o%ember
/012, a ma6or inno%ation in the form of ne money market instrument! the /1?!day
Treasury bill.
It used to be sold in the market by the RBI in auctions hich ere monthly in the
beginningG they ere made fortnightly from @uly /011.
It is important to note that no specific amount of funds as sought to be raised
through the auctions of these bills.
The amount raised in each auction suspended upon the funds a%ailable ith the
market participants, and the funds they desired to in%est in these bills. Thus, the ne
bill had become a handy instrument for banks, financial institution.
The /1?!day bills could be purchased by any person resident in India, including
indi%iduals, firms, companies, banks, and financial institutions.
The /1?!day bill as $uit li$uid because of the a%ailability of refinance facility
against it and the existence of the secondary market in it.
./0(#AY !REA"$RY %ILL MARE!
Hpon discounting the /1?!day Treasury bill the authorities introduced a ne money
market instrument, namely :2E!day TBs ith effect from April /00?.
It is being auction regularly e%ery fortnight.
Its features are %ery similar to those, hich the /1?!day bill had.
The RBI dose not purchase and rediscount this bill.
9
'0(#AY" !REA"$RY %ILL" MARE!
Fith a %ie to further di%ersify the TBs marketG the authorities ha%e introduced
recently to types of /E!day TBs4
Bn April /, /00= hich is knon as intermediate treasury bill "ITB#
-econd on may ?;, /00=.
ITB has replaced the 0/!day tap Treasury bill.
It is sold only to state go%ernments, foreign central banks, and other specified bodies
in order to pro%ide them ith alternate arrangements in place of /0!day tap TBs for
in%estment of their temporary cash surplus.
It is issued in a book entry from i.e. by credit to subsidiary general ledger account.
It can be repaid8reneed at par on the expiration of /E days from the date of issue.
The disad%antage of /E!day ITB is that it is not tradable or transferable.
-ummary of TBs
Treasury bills are a%ailable for a minimum amount of Rs.?>,;;; and in multiples of
Rs. ?>,;;;. Treasury bills are issued at a discount and are redeemed at par. Treasury
bills are also issued under the (arket -tabiliIation -cheme "(--#.
0/!day T!bills are auctioned e%ery eek on Fednesdays.
/1?!day and :2E!day T!bills are auctioned e%ery alternate eek on Fednesdays.
T!bills auctions are held on the )egotiated ,ealing -ystem "),-# and the members
electronically submit their bids on the system.
10
#EFEC!" OF !REA"$RY %ILL"
Joor Cield
Absence of +ompetiti%e Bids
Absence of Acti%e Trading
Type of Day of Day of
T-bills !ction Payment"
#$-%ay We%nes%ay &ollo'in( &ri%ay
$)*-%ay We%nes%ay of non-
reportin( 'eek
&ollo'in( &ri%ay
+,--%ay We%nes%ay of
reportin( 'eek
&ollo'in( &ri%ay
COMMERCIAL %ILL" MARE!
Banks through cash credits, overdrafts, and purchase/discontinuing
of coercia! "i!!s ain!# provide funds for $orking capita! re%uired
"# coerce and industr#&
11
%ILL OF E1C2AN3E
'he (nancia! instruent, $hich is traded in the "i!! arket of
e)change& *t is used for (nancing a transaction in goods that takes
soe tie to cop!ete&
*t sho$s the !i%uidit# to ake the pa#ent on a ()ed date $hen
goods are "ought on credit&
+ccording!# to the *ndian ,egotia"!e *nstruents +ct, 1881, it is a
$ritten instruent containing as unconditiona! order, signed "# the
aker, directing a certain person to pa# a certain su of one#
on!# to, or to the order of, a certain person, or to the "earer of the
instruent&
INLAN# %ILL"
Be dra$n or ade in *ndia, and ust "e pa#a"!e in *ndia
Be dra$n upon an# person resident in *ndia
FOREI3N %ILL"
-ra$n outside *ndia and a# "e pa#a"!e in and "# a part# outside
*ndia, or a# "e pa#a"!e in *ndia or dra$n on a part# resident in
*ndia
-ra$n in *ndia and ade pa#a"!e outside *ndia&
+ re!ated c!assi(cation of "i!!s is e)port "i!!s and iport "i!!s
45at purpose bi** of e6c5an7e use89
.oercia! "i!!s a# "e used for (nancing the oveent and
storage of goods "et$een countries, "efore e)port /pre0e)port
credit1, and a!so $ithin the countr#&
*n *ndia the use of "i!! of e)change appears to "e in vogue for
(nancing agricu!tura! operations, cottage and sa!! sca!e industries,
and other coercia! and trade transactions&
12
ACCOMMO#A!ION AN# "$++LY %ILL"
+part fro the genuine "i!! of e)change, i&e& "i!!s $hich evidence
sa!e and /or dispatch of goods, there are other "i!!s that are kno$n
to the one# arket& 'he# are accoodation "i!!s and supp!#
"i!!s&
+s 2accoodation "i!!3 is de(ned as one in $hich a person, ca!!ed
as accoodation part#, puts his nae /accept it1 to accoodate
another person $ithout receiving and consideration& 4uch "i!! is
soeties ca!!ed, a kite or $ind "i!!&
%ANER" ACCE+!ANCE
+ "anker5s acceptance is a short0ter investent p!an created "# a
copan# or (r $ith a guarantee fro a "ank&6 *t is a guarantee
fro the "ank that a "u#er $i!! pa# the se!!er at a future date& 'he
copan# or (r dra$ing the "i!! re%uires a good credit rating&
'his is especia!!# usefu! $hen the credit $orthiness of a foreign
trade partner is unkno$n&
'he ters for these instruents are usua!!# 90 da#s, "ut this period
can var# "et$een 30 and 180 da#s& .opanies use the acceptance
as a tie draft for (nancing iports, e)ports and trade&
*n *ndia, there are neither specia!ised acceptance agencies for
providing this service on a coission "asis nor is it provided to
an# signi(cant e)tent "# coercia! "anks&
7nder the "i!! arket schees introduced "# 8B* in 1952, "anks are
re%uired to se!ect the "orro$ers after carefu! e)aination of their
13
eans, respecta"i!it#, and dea!ings for conversion of their advances
in to "i!!s&
Banks aintain opinion registers on di9erent dra$ers of "i!!s and
the# get reports fro tie to tie on these dra$ers of "i!!s&
B+ acts as a negotia"!e tie draft for (nancing iports, e)ports or
other transactions in goods&
+cceptances are traded at discounts fro face va!ue in the
secondar# arket&
B+:s are guaranteed "# a "ank to ake pa#ent&
#I"CO$N! MARE!
#I"CO$N!IN3 "ER:ICE
'he centra! "anks he!p "anks in their !i%uidit# anageent "#
providing the discounting and re(nancing faci!ities&
'he 8B* are in a"undance !i%uidit# /funds1 to "anks on occasions
$hen !i%uidit# shortages threaten econoic sta"i!it#&
'he centra! "ank perfors his function through its discount $indo$
or discounting echanis&
Bank "orro$s funds teporari!# at the discount $indo$ of the
centra! "ank&
'he# are peritted to "orro$ or are given the privi!ege of doing so
fro the centra! "ank against certain t#pes of e!igi"!e paper, such
as the coercia! "i!! or treasur# "i!!, $hich the centra! "ank stands
read# to discount for the purpose of (nancia! accoodation to
"anks&
#I"CO$N! AN# FINANCE 2O$"E OF IN#IA
14
'he "anking coission considered the %uestion of setting up of
discount house in *ndia in the ear!# 1970s&
#I"CO$N! 2O$"E F$NC!ION
*t shou!d "e the so!e depositor# of the surp!us !i%uid funds of the
"anking s#ste as $e!! as the non0"anking (nancia! institutions&
*t shou!d use surp!us funds to even out the i"a!ance in !i%uidit# in
the "anking s#ste su";ect to the 8B* guide!ines&
*t shou!d create read# arket for coercia! "i!!s, treasur# "i!!s,
and governent guaranteed securities "# "eing read# to purchase
fro and se!! to the "anking s#ste such securities&
COMMERCIAL +A+ER
Commercia* +aper ;C+< is an unsecured one# arket
instruent issued in the for of a proissor# note&
*t $as introduced in *ndia in 1990 $ith a vie$ to ena"!ing high!#
rated corporate "orro$ers/ to diversif# their sources of short0ter
"orro$ings and to provide an additiona! instruent to investors&
<n!# copan# $ith high credit rating issues .=:s
4u"se%uent!#, priar# dea!ers and sate!!ite dea!ers $ere a!so
peritted to issue .= to ena"!e the to eet their short0ter
funding re%uireents for their operations&
=riar# dea!ers /=-s1 and the +!!0*ndia >inancia! *nstitutions />*s1 are
e!igi"!e to issue .=&
.= is ver# safe investent "ecause the (nancia! situation of a
copan# can easi!# "e predicted over a fe$ onths&
15
.= can "e issued for aturities "et$een a iniu of 15 da#s and
a a)iu up to one #ear fro the date of issue&
'he aggregate aount of .= fro an issuer sha!! "e $ithin the !iit
as approved "# its Board of -irectors or the %uantu indicated "#
the .redit 8ating +genc# for the speci(ed rating, $hichever is !o$er&
+s regards >*s, the# can issue .= $ithin the overa!! u"re!!a !iit
()ed "# the 8B* i&e&, issue of .= together $ith other instruents
vi?&, ter one# "orro$ings, ter deposits, certi(cates of deposit
and inter0corporate deposits shou!d not e)ceed 100 per cent of its
net o$ned funds, as per the !atest audited "a!ance sheet&
<n!# a schedu!ed "ank can act as an *=+ for issuance of .=&
*ndividua!s, "anking copanies, other corporate "odies registered
or incorporated in *ndia and unincorporated "odies, ,on08esident
*ndians /,8*s1 and >oreign *nstitutiona! *nvestors />**s1 etc& can
invest in .=s&
+ount invested "# sing!e investor shou!d not "e !ess than 8s&5
!akh /face va!ue1&
@o$ever, investent "# >**s $ou!d "e $ithin the !iits set for their
investents "# 4ecurities and A)change Board of *ndia
.= $i!! "e issued at a discount to face va!ue as a# "e deterined
"# the issuer&
'he investor in .= is re%uired to pa# on!# the discounted va!ue of
the .= "# eans of a crossed account pa#ee che%ue to the account
of the issuer through *=+&
CER!IFICA!E" OF #E+O"I!
16
Bith a vie$ to further $idening the range of one# arket
instruents and give investors greater Ce)i"i!it# in dep!o#ent of
their short0ter surp!us funds, .erti(cates of -eposit /.-s1 $ere
introduced in *ndia in 1989&
.erti(cate of -eposit /.-1 is a negotia"!e one# arket instruent
and issued in deateria!ised for or as a 7sance =roissor# ,ote
against funds deposited at a "ank or other e!igi"!e (nancia!
institution for a speci(ed tie period
C#s can be issue8 by
4chedu!ed coercia! "anks e)c!uding 8egiona! 8ura! Banks /88Bs1
and Doca! +rea Banks /D+Bs1
4e!ect a!!0*ndia >inancia! *nstitutions that have "een peritted "#
8B* to raise short0ter resources $ithin the u"re!!a !iit ()ed "#
8B*&
A33RE3A!E AMO$N! on C#
Banks have the freedo to issue .-s depending on their
re%uireents&
+n >* a# issue .-s $ithin the overa!! u"re!!a !iit ()ed "# 8B*,
i&e&, issue of .- together $ith other instruents, vi?&, ter one#,
ter deposits, coercia! papers and inter0corporate deposits
shou!d not e)ceed 100 per cent of its net o$ned funds, as per the
!atest audited "a!ance sheet&
MINIM$M "I=E OF I""$E AN# #ENOMINA!ION"
Einiu aount of a .- shou!d "e 8s&1 !akh, i&e&, the iniu
deposit that cou!d "e accepted fro a sing!e su"scri"er shou!d not
"e !ess than 8s&1 !akh and in the u!tip!es of 8s& 1 !akh thereafter&
IN:E"!OR"
17
.-s can "e issued to individua!s, corporations, copanies, trusts,
funds, associations, etc& ,on0 8esident *ndians /,8*s1 a# a!so
su"scri"e to .-s, "ut on!# on non0repatria"!e "asis, $hich shou!d "e
c!ear!# stated on the .erti(cate& 4uch .-s cannot "e endorsed to
another ,8* in the secondar# arket&
MA!$RI!Y
'he aturit# period of .-s issued "# "anks shou!d "e not !ess than
7 da#s and not ore than one #ear&
'he >*s can issue .-s for a period not !ess than 1 #ear and not
e)ceeding 3 #ears fro the date of issue&
Ot5er aspect of C#
.-s a# "e issued at a discount on face va!ue&
Banks / >*s are a!so a!!o$ed to issue .-s on Coating rate "asis
provided the ethodo!og# of copi!ing the Coating rate is o";ective,
transparent and arket0"ased&
Banks have to aintain appropriate reserve re%uireents, i&e&, cash
reserve ratio /.881 and statutor# !i%uidit# ratio /4D81, on the issue
price of the .-s&
.-s in ph#sica! for are free!# transfera"!e "# endorseent and
de!iver#&
18
COM+ANY +ROFILE
MI""ION
To be a leader in the Primary Dealer Business and
to be known as a Knowledge Based Research
Oriented & Quality conscious company maximiing
wealth !or shareholders
Introduction
PNB Gilts Ltd, a renowned and preferred name in the Indian debt market was
one of the first entities to be granted the Primary Dealership License by the
Reserve Bank of India !he company is also a s"bsidiary of one of the largest
Indian commercial banks, P"n#ab National Bank $ompany has played a
pivotal role in strengthening of the domestic fi%ed income markets and is a
dominant player, marking its presence with significantly high market share in
the overall trading t"rnover
19
Activities
&s a Primary Dealer, $ompany's primary activities entail s"pporting
government borrowing program via "nderwriting of government sec"rities
iss"ances and trade in a gam"t of fi%ed income instr"ments s"ch as
Government sec"rities, !reas"ry Bills, (tate Development Loans, $orporate
Bonds, Interest Rate (waps and vario"s money market instr"ments s"ch as
$ertificates of Deposits, $ommercial Papers etc $ompany has dedicated
trading desk managed by e%perienced professionals having strong research
and market insights
What we have to offer...
)aving completed *+ years of operation, company boasts of rich e%perience
and matchless standards in its service to diverse client base in the fi%ed
income market $ompany has been a pioneer in retailing of Government
(ec"rities contrib"ting to a deep and broad,based market PNB Gilts Ltd has
a wide client base ranging from Provident -"nds !r"sts, Regional R"ral
Banks, $o,operative Banks, $orporates, Individ"als etc and has an
independent marketing and sales team to cater to the specific client
re."irements Besides being one stop shop for all the investment needs,
company also offers advisory services backed by strong research to its clients
to manage the government sec"rities portfolio /ith a strong and tr"sted
lineage, o"r clients are ass"red of the most transparent and timely services in
the retail market
Past Performances and Accomplishments:
!he net,worth of the $ompany has increased from Rs +0 crs to Rs +1234 crs
in a span of *3 years
Our Financial
(Rs. Crore)
!!"#!$ !!$#!% !!%#&! !&!#&& !&&#&
'urnover +4535 36*51 37163 3512+ 605456
Income *1637 **621 *0*17 *076* *3+64
20
()penditure *0+36 127+ 2+1 +4*1 *7+33
P*' 310* 75*6 +307 2202 6432
PA' 2+*3 6224 731 70+5 6*0+
+et Worth +6+2* +7525 ++113 +3546 +1234
,ividend (in -) *+ 5 *0 *6 *0
BO"RD O# D$R%&TOR'
.h. /. R. /amath
Chairman
.h. Ra0esh .ethi
,irector
,r. O.P. Chawla
,irector
,r. /amal 1upta
,irector
.h. ../. .oni
,irector
21
.h. P. P. Paree0
,irector
.h. P. /. Chho0ra
,irector
.h. .. /. ,u2e3
4ana5in5 ,irector
O./0CTI102 O& T30 2TUD4
To analyIe the effects of fluctuations in money market.
To analyIe the popularity of money market instruments and reasons behind it.
To determine the in%estment criteria of users of such instruments.
To predetermine the future prospects of money market and deciding
alternati%es to tackle them.
22
Research Metho%olo(y
Research is %oyage from knon to unknon
Research is a procedure of logical and systematic application of the fundamentals of
science to the general and o%erall $uestions of a study and scientific techni$ue hich
pro%ide precise tools, specific procedure and technical rather than philosophical
means for getting and ordering the data prior to their logical analysis and
manipulation. ,ifferent type of research designs is a%ailable depending upon the
nature of research pro6ect, a%ailability of able manpoer and circumstances.
(ethodology
1& 8esearch -esignF 'he research design is the "!ueprint for
the fu!(!!ent of o";ectives and ans$ering %uestions& *t is a
aster p!an specif#ing the ethod and procedures for
co!!ecting and ana!#?ing needed inforation&
23
o -escriptive 8esearch is used in this stud# as the ain
ai is to descri"e characteristics of the phenoenon or
a situation&

2& -ata .o!!ection EethodsF 'he source of data inc!udes
priar# and secondar# data sources& Ea;or source, ho$ever,
is priar# "ased&
Jrimary -ources4 Jrimary data has been collected directly from sample
respondents through $uestionnaire and ith the help of inter%ie.
-econdary -ources4 -econdary data has been collected from standard
textbooks, )espapers, (agaIines ' Internet.
:. Research Instrument4 Research instrument used for the primary data
collection is Kuestionnaire.
E. -ample ,esign4 -ample design is definite plan determine before any data is
actually obtaining for a sample from a gi%en population. The researcher
must decide the ay of selecting a sample. -amples can be either probability
samples or non!probability samples.
-ampling Techni$ue4 -tratified Random -ampling
-ample -iIe4 :; Respondents.
Area of -tudy4 ,elhi.
24
DT N542I2 ND INT0RPR0TTION
$6 O7er 'hat perio% of time are yo! in7estin( in this market?
9ess than / year /? E;
(ore than / year 0 :;
(ore than ? year : /;
(ore than > year 2 ?;
Total :; /;;
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nalysis8 Through the pie chart it can be analyIed that maximum E;<
respondents like to in%est in less than / year period folloed by :;< of
respondents ho ould like to in%est for more than / year. (ere ?;< of
respondents ere likely to in%est for more than ? years and 6ust /;< of
respondents ould like to in%est for maximum time period.
Interpretation8 Through the analysis it can be interpreted that users of
money market are generally found to be risk a%erters as the maximum of
our respondents belie%ed in a minimum time period in%estment so as to
skim more profits in less risk. This as due to the fluctuations in money
market as told by them.
*6 What is yo!r main ob9ecti7e for this in7estment?
9arge purchase ithin fi%e years /? E;
-a%ings for future retirement 0 :;
To lea%e an estate for my family : /;
,on payment for a home purchase ithin fi%e
years
2 ?;
26
Total :; /;;
nalysis8 Through the pie chart it can be analyIed that maximum
people&s main o6ecti%e for such in%etments is large purchase ithin >
years"E;<# and then sa%ing for the future":;<#, folloed by don
payment for a home purchase"?;<# and the least is to lea%e an estate for
its family"/;<#.
Interpretation8 Through the analysis it can be interpreted that the
in%esters of money market make such in%estments mostly in order to
increase their purchasing poer and make large purchases ithin > years
of in%estment. Thus it can be interpreted that the users of such
instruments seek short term but large benefits.
+6 What percenta(e of this money mi(ht yo! spen% in the ne:t ; years?
Hnder ?>< ; ;
?>< to E;< 2 ?;
E/< to =;< 0 :;
27
B%er =;< /> >;
Total :; /;;
nalysis8 *rom the abo%e pie chart it can be analyIed that maximum
>;< of the respondents ant to spend o%er =;< of their money folloed
by :;< respondents ho ould only spend a limited amount of money
ithin the range of E/ to=;< . (ere ?;< ere in fa%our of spending
least amount of their money in next > years.
Interpretation8 Through the analysis it can be interpreted that the
in%estors of money market instruments are generally illing to ha%e a
strong money backup for making large purchases ithin > years of
in%estments.
-6 3o' %o yo! feel abo!t the risk of inflation ero%in( the p!rchasin(
po'er of yo!r in7estments?
I am %ery concerned about inflationary ?E 1;
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I am not concerned about inflation o%er the near
term, but o%er the long term I am concerned
: /;
I kno prices are rising, but I am not o%erly
concerned about prices changing into the future
: /;
These days, inflation is lo enough not to be a
serious concern
; ;
Total :; /;;
nalysis8 *rom the abo%e pie chart it can be analyIed that more
than1;< of the respondents are concerned about the inflation and further
/;< are not much concerned about the inflation of short period and last
but not the least only /;< respondents are kno that prices are riseing
but they are not much affected ith it.
Interpretation8 Through the analysis it can be interpreted that as per the
ansers gi%en by the respondents the inflation certailny has eroded the
purchasing poer of public and it is ob%iously a reason of concern for
them as the hike in prises currently errupting in the market can easily
beat the in%estment income.
;6 <In7estments 'hich can si(nificantly chan(e in 7al!e o7er the short-
term %o not bother me6= Do yo!8
29
-trongly Agree /1 2;
-trongly ,isagree /? E;
Total :; /;;
nalysis8 The pie chart abo%e sho that 2;< of the respondents belie%e
that the in%estments hich can significantly change in %alue does not
bother them and E;< belie%e that this change bother them a lot.
Interpretation8 Through the analysis it can be interpreted that maximum
respondents generally agree to the fact that in%estments hich can
change %alue in short periods are less bothering. It may be because of the
reason that such in%estments, according to the in%estors may pro%ide
more returns in longer run as compared to shorter run.
30
,6 .efore kno'in( ho' markets 'ill perform o7er a fi7e-year perio%>
'hich portfolio 'o!l% yo! be most likely to p!rchase?
Jortfolio A "><# ; ;
Jortfolio B "2<# / :.:
Jortfolio + "=<# ? 2.=
Jortfolio , "1<# 2 ?;
Jortfolio . "0<# ?/ =;
Total :; /;;
Ana*ysis> >ro the a"ove pie chart and ta"!e it can "e ana!#?ed
that a)iu of 70G respondents $ou!d !ike =ortfo!io A/9G1 as it is
giving a)iu return and so on and the iniu and !east
=ortfo!io the# $ant is =ortfo!io B/6G1 that is 1 respondents&
Interpretation8 Through the analysis it can be interpreted that people ha%e a beha%ior
of skimming maximum returns hen it comes to making an in%estments ithout e%en
knoing the future prospects of the market. This is because hen nothing is
predetermined regarding the fluctuations, higher returns through interest seems
tempting to most of the in%estors.
31
R(CO44(+,A'IO+
/. A money market fund must pro%ide appropriate information to in%estors on
the risk and reard profile of the fund so as to enable them to identify any
specific risks linked to the in%estment strategy of the fund.
?. Re$uire money market funds to pro%ide monthly ebsite disclosure of
portfolio holdings.
:. ,e%elop a nonpublic reporting regime for all institutional in%estors in the
money market.
32
CONC5U2ION
An indi%idual player cannot in%est in ma6ority of the (oney (arket Instruments,
hence for retail market, money market instruments are repackaged into (oney (arket
*unds.
A money market fund is an in%estment fund that in%ests in lo risk and lo
return bucket of securities %iI money market instruments. It is like a mutual fund,
except the fact mutual funds cater to capital market and money market funds cater to
money market. (oney (arket funds can be categoriIed as taxable funds or
nontaxable funds.
Hsers of money market are generally found to be risk a%erters as the maximum of our
respondents belie%ed in a minimum time period in%estment so as to skim more profits
in less risk. This as due to the fluctuations in money market as told by them.
It is belie%ed by most of the in%estors that inflation certailny has eroded the
purchasing poer of public and it is ob%iously a reason of concern for them as the
hike in prises currently errupting in the market can easily beat the in%estment income.
Thus a need is felt to ha%e a strategically planned market for the in%estors so as to
make it suitable for all types of in%estors. (oney market instruments if regulated
properly can ser%e that purpose.
33
nne:!res
?!estionnaire
Aeneral information of the respondent
I# )ame 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
II# Age 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
III# Kualification 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
IM# /. 9iterate
?. Illiterate

if literate N
/. Belo (atric ?. (atric
:. Araduate E. Jost Araduate
M# Jrofession 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
MI# Address 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
M//# +ontact 4 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
Jlease tick the option you find most suitable
34
/. B%er hat period of time are you in%esting in this marketN
"a# 9ess than / year
"b# (ore than / year
"c# (ore than ? year
"d# (ore than > year
?. Fhat is your main ob6ecti%e for this in%estmentN
"a# 9arge purchase ithin fi%e years
"b# -a%ings for future retirement
"c# To lea%e an estate for my family
"d# ,on payment for a home purchase ithin fi%e years
:. Fhat percentage of this money might you spend in the next > yearsN
"a# Hnder ?><
"b# ?>< to E;<
"c# E/< to =;<
"d# B%er =;<
E. 7o do you feel about the risk of inflation eroding the purchasing poer
of your in%estmentsN
"a# I am %ery concerned about inflationary
"b# I am not concerned about inflation o%er the near term, but o%er the
long term I am concerned
35
"c# I kno prices are rising, but I am not o%erly concerned about prices
changing into the future
"d# These days, inflation is lo enough not to be a serious concern
>. In%estments hich can significantly change in %alue o%er the short!term
do not bother me. ,o you4
"a# -trongly Agree
"b# -trongly ,isagree
2. Before knoing ho markets ill perform o%er a fi%e!year period,
hich portfolio ould you be most likely to purchaseN
"a# Jortfolio A "><#
"b# Jortfolio B "2<#
"c# Jortfolio + "=<#
"d# Jortfolio , "1<#
"e# Jortfolio . "0<#
36
*I*6IO1RAP78
* http899pnbgiltscom9
6 http899enwikipediaorg9wiki9:oney;market
7 http899wwwrbiorgin9scripts9bs;viewmmoasp%
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