Professional Documents
Culture Documents
Money Market & Capital Market 1579159299851 PDF
Money Market & Capital Market 1579159299851 PDF
MONEY MARKET
AND CAPITAL
MARKET
MONEY MARKET
INTODUCTION
• There are two types of financial markets viz.,
the money market and the capital market.
• The money market in that part of a financial
market which deals in the borrowing and
lending of short term loans generally for a
period of less than or equal to 365 days.
• It is a mechanism to clear short term
monetary transactions in an economy.
DEFINITION
• According to Crowther, "The money market is a name
given to the various firms and institutions that deal in
the various grades of near money."
• According to the RBI, "The money market is the centre
for dealing mainly of short character, in monetary
assets; it meets the short term requirements of
borrowers and provides liquidity or cash to the lenders.
It is a place where short term surplus investible funds
at the disposal of financial and other institutions and
individuals are bid by borrowers, again comprising
institutions and individuals and also by the
government."
FUNCTIONS OF MM
To maintain monetary equilibrium