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CAPITAL MARKET

PROF. MANISH TRIPATHI
PIMG

INDIAN MONEY MARKET ORGANISED BANKINGUNORGANISED BANKINGSUB MARKET CP CD CALL MONEY T­BILL C­BILL .

SHORT NTICE MARKET Short term fund exchange on 3.   80% DEMAND –PSB  20% DEMAND. demand from bank & FI to RATE :CALL MONEY RATE  companies & govt.GIC—MAJOR LENDER UP TO 80% SUPPLY 20% SUPPLY BY BANKING SYSYTEM   . lending & q CALL & SHORT NOTICE q CLASSIFICATION: borrowing of short term 1.fund OVER NIGHT MARKET 2.LIC.PRIVATE    NBFC –IDBI. q Sub market CALL MONEY MARKET  MONEY MARKET q VERY SHORT TERM IN NATURE Near money.

MONEY MARKET CONCEPT Organised money  Unorganized money  market market  RBI  NBFC  SBI & ASSOCIATE  TRADITIONAL  PSB PLAYERS  PRIVATE  FOREIGN BANKS .

BILL MARKET  T-BILL  C-BILL  NOT MUCH FAMOUS IN INDIA  91 days T-bill is extensively used by GOI  182 days T-bill & 364 days T-bill  1997 GOI introduced 14 days international treasury bill .

Defect in money market  Existence of unorganised money market  NBFC DOMINANCE  LACK OF INTEGRATION  RBI INEFFECTIVE IN FUNCTIONING  DIVERSITY OF INTEREST RATES  BILL MARKET ABSENCE  SEASONAL STRINGENCY OF MONEY(HIGH RATES)  VOLATILE CALL MONEY MARKET  Absence of a well organised banking system .

0 .25 2000-01 14 4.INTER BANK CALL MONEY RATES %/annum YEAR HIGHEST LOWEST 1990-91 70 4 1993-94 17 0.00 2007-08 55 6.15 2008-09 23 1.

Underdeveloped money market  Compare to London & Newyork  No sub market  No interconnections    .