CALL MONEY MARKET

 INTRODUCTION Market of very short term funds. The rate at which funds are borrowed in this market is called µCall Money Rate¶ Size of market for funds in India is between Rs. 60,000 to Rs. 70,000 million, of which public sector banks a/c for 80% of borrowings & foreign banks / private sector banks a/c for the balance 20%. Non-bank financial institutions like IDBI, LIC, GIC etc participate only as lenders in this market.

The interest rate in the call money market. DEFINITION Market in which brokers& dealers borrow money to satisfy their credit needs. where money is lent for short durations. either to finance their own inventory of securities or to cover their customers¶ margin accounts is known as µCall Money Market¶. ranging from the night to 14 days known as µCall Money Rate¶ .

Securities Market  Foreign Exchange Market  Integration &Globalization of Financial Market . PARTICIPATION  Money Market  Credit Market  Capital Market  Govt.

v. The money market comprise call money. commercial bills. iv. inter-corporate deposits. CD. financial institution. CP. MONEY MARKET i. iii. The participants in the money market are banks. Central banks transmit monetary policy signals to the economy through the money market. manufacturing co. . Money market performs the crucial role of providing an equilibrating mechanism to even out short-term liquidity. etc. non-banking financial co. The central bank is an important constituent of the money market. ii. primary dealers. treasury bills.. notice money.. foreign institutional investors & trusts.

Extending the facility of routing call money transactions to all PDs. 10 cr. Prescribing an umbrella limit for mobilization of resources vi. 5 lakh. Major changes in money market instruments from April 1997 are. reducing the minimum amount of issue progressively from Rs. To Rs. reducing the size of operations from Rs. 25 lakh to Rs. iv. Permitting all PDs to participate in the call money & bills rediscounting market ii. i. In the CD market. Allowing repo transactions in such of the Public Sector Units¶ bonds & private corporate debt securities . iii. 5 cr. Permit investment in corporate debentures & bonds within prudential limits v.

Specialized Financial Institutions.Developmental Financial Institutions. iv. Long term Short-term finance is extended in the form of cash credit limits & term loans with maturity of less than one year. vi. Investment Institutions. CREDIT MARKET i. Sources of credit can be classified into internal (rupee credit) & external (foreign currency). Classified by maturity of finance Short term & ii. . Co-operative banks & nonbank finance companies. v.Commercial banks. Long-term finance is extended in the form of term loans technically for a period of over one year. iii. Ex:. Ex:.

 Major changes in credit market instruments from April 1997 are. All deposit rates are freed except for saving accounts & term deposits up to 30 days. . 2 lakh.C. ii.000 to Rs. The RBI is moving away from micro regulation to micro management of banks. & credit dispensation. 25. v. iii. Banks got freedom to evolve their own methods of assessing W.5 % for loan amounting to Rs. i. iv. 2 lakh & within a ceiling of 13. Banks prescribe a separate term prime lending rate for maturities of 3 yrs & above. Banks fix their lending rates beyond Rs.

vi. Capital market is regulated mainly by SEBI. Recent measures introduced by RBI is to widen & deepen the market. Most important measure is to removal of the 5 % ceiling in respect of banks¶ investments in PSU. After liberalization. iv. v. Banks allowed to lend against shares & debentures to individuals up to Rs. iii. . banks have increased their investment in debt instruments in a big way. ii.10 lakh. CAPITAL MARKET i. corporate bonds & debentures. SEBI has been proactive in regulating the capital market by introducing a measures of safeguarding & stimulating the interest of investors.

SECURITIES MARKET . GOVT.

 FOREIGN EXCHANGE MARKET .

 INTEGRATION & GLOBALIZATION OF FINANCIAL MARKET .

CALL RATES .

3. Illegal Insider Trading . 2. 4. NASD (National Association of Securities Dealers). Stock Regulations.1. SEC (Securities & Exchange Commission).

Stock Regulations.1. .

 SEC (Securities & Exchange Commission). .

. NASD (National Association of Securities Dealers).

 Illegal Insider Trading .

Buy Stocks 6. Goals. Develop The Right Attitude Discipline. Fear. Patience. Confidence. Develop A Long Term Plan 5. Greed 8. Know Thyself Current Situation. Get Help If You Need It . Risk Tolerance 3. Start Investing Now 2. Get Your Financial House In Order 4. Investigate Before You Invest 7. PRINCIPLES OF INVESTING 1.

Forex Market 2. G-SEC Market 5. Commercial Bill Market: Bill of Exchange . RECENT DEVELOPMENTS 1. Indian Forex Market 3. Approach to reforms in foreign exchange Market 4. Money Market: Treasury Bills 6.

Close Ended Schemes 14. Liquid Income Schemes 8. Hybrid Schemes 11. Constitution 12. Money Market Schemes 9. SCHEMES 1. Interval Schemes . Equity Oriented Schemes 2. Real Estate Funds 5. Debt Based Schemes 6. Tax Saving Schemes 4. Open Ended Schemes 13. Index Schemes 3. Income Schemes 7. Gilt Funds 10.

Inter-Corporate deposits iii. . Commercial papers iv. Commercial bills i. Market for CPS and CDS  Interest Rate Determination Certificate of deposits ii.

 Fixed Income Product  Interest Based Bonds  Derived instruments  Benchmarked Instruments  Money Market Instruments . DISCOUNT MARKET & MARKET FOR FINANCIAL GUARANTEES.

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