- Indian Money Market and
- Indian Capital Market
Now let’s lead maintain a brief review of them.
Money Market :
Money Market is a Market for ‘near money’ or it is the marketplace seat for borrowing together with lending of short-term funds.
Instruments of Money Market
T-Bills or Treasury bills are the regime bonds, which are used to heighten funds cast the coin market.
- 91 Days Treasury Bills (T-Bills) used past times the regime to heighten funds from the marketplace seat for brusque periods zero but short-term regime bond.
- 182 Days T-bills introduced on the recommendation of Vaghul working gropus, are variable involvement bills sold through fortnightly auctions.
- 364 Days T-bills introduced on the recommendation of Vaghul working group. These are long dated bills, whose yields reflects the marketplace seat conditions.
- 14 Days T-bills introduced inwards Apr 1997 past times the RBI at a discount charge per unit of measurement equivalent to the charge per unit of measurement of involvement on Ways together with Means Advance (WMA0 to the Government of India.
- Dated Government Securities are likewise type of Treasury bills recommended past times Chakravarty Committee on Monetary System (1988). These are five twelvemonth together with 10 twelvemonth maturity regime securities sold on an auction basis.
- Certificate of Deposits : It is the certificate issued past times banking concern / fiscal institute, who hand funds on short-term basis. Commercial Banks are a saving certificate entitling the bearer to have interest. The maturity of a CoD varies from iii months to 1 years.
- Commercial Paper : It is an musical instrument to heighten short-term funds past times the corporate sector. It tin hold upward issued past times a listed companionship amongst a working uppercase of almost five crore. The CP is issued inwards multiples of Rs. 25 lakh dependent champaign to a minimum effect of Rs. 1 crore. The maturity of CP is betwixt iii to half-dozen months.
- Money Market Index : It is an index, which helps investors to cause upward one’s hear how much together with where to invest inwards coin marketplace seat through providing data most prevailing marketplace seat ratio.
- Bankers Acceptance Rate : It is the rate, at which the banker’s credence is traded inwards secondary market.
- LIBOR / MIBOR : London Inter-Bank Offered Rate / Bombay Inter-Bank Offered Rate is the involvement rate, at which banking concern borrows funds from other banks.
- FM refers to all those institutions, which care the private together with populace corporation to heighten funds.
- In that coin marketplace seat deals amongst the provision of raising short-term fund amongst maturity less than 1 year.
- While uppercase marketplace seat is concerned amongst provision of raising long-term funds of maturity 1 twelvemonth or more.
- Capital marketplace seat tin hold upward classified into Debt Market together with Equity Market.
- In Debt Market, a companionship tin start funds entirely past times incurring debt together with lender is guaranteed of a fixed repayment e.g., bond.
- In Equity Market, funds tin hold upward raised without incurring debt those, who finance the corporation past times purchasing equity musical instrument similar shares.
shared past times T. CH. K. Babu
Manager : Vijaya Bank, Hyderabad