PRESENTED BY :- GUIDED BY :-

Swopneswar Dash Dr. K.K. Acharya

WHAT IS MONEY MARKET ?

 A mechanism that deals with the lending and

borrowing of short term funds which is less than
one year is called money market.

 Regulator of Money Market is ‘RBI’.

 The rate of interest which is fixed at the time of

issue or sell of sequirity is called COUPON RATE
and it varies time to time.
TYPES OF MONEY MARKET....
1.CALL MONEY
If money lend for one day or over night period is
called CALL MONEY.

2.NOTICE MONEY
If money lend from two days to fourteen days is called
NOTICE MONEY.
3.TERM MONEY
If money lend from fifteen day to one year is called
TERM MONEY.

NOTE:-
CALL AND NOTICE MONEY use by banks when
they are in shortage of liquid cash.

 Avoid cash shortage of banks

INSTRUMENT USE IN MONEY MARKET
1.CD-CERTIFICATE OF DEPOSIT:-

 CD’s are issued by commercial bank and financial

institution when they are in shortage of money.
 The first CD issued in India in 1989.
 The minimum amount of CD is 1 lakh and after
that multiple of 1 lakh.
 Prematured widraw is applicable in CD in case of
penalty is applicable on interest.
 Loan against CD is not applicable.
2.CP-COMMERCIAL PAPER:-
 CP’s are issued by eligible corporates when they
are in shortage of money.
 The first CP issued in INDIA in 1990.
 The minimum amount of CP is 5 lakh and after
that multiple of 5 lakh.
 Prematured widraw is not applicable in CP.
 Loan against CP is not applicable.
3.TB-TREASARY BILL:-

 TB’S are sold by RBI on behalf of GOI.

 TB is the major instrument used by RBI or GOI to
control inflation or defletion.
 The minimum amount of TB is 25000 and after
that multiple of 25000.
 TB is always issued at a discount and face value
becomes the maturity value.
THANK
YOU