Key Points
Key Points: Money Market in India
- Money market is a market for short‑term funds used for lending and borrowing.
- It deals in “near money” instruments like trade bills, government securities and promissory notes.
- These instruments are highly liquid, low risk, easily marketable and have a maturity of up to one year.
Key Points: Money Market Instruments
- Money market instruments are short‑term tools for borrowing and lending (up to one year).
- Call / Notice money: Call = loan for 1 day; Notice = loan for 2–14 days.
- Treasury Bills: Short‑term government securities issued by RBI.
- Commercial Papers: Unsecured short‑term promissory notes issued by companies.
- Certificates of Deposit: Negotiable time deposits issued by banks/DFIs.
- Commercial Bills: Short‑term trade bills used to finance sale of goods.
