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Which instrument of money market is generally used for inter-bank transactions? -

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Question

Which instrument of money market is generally used for inter-bank transactions?

Options

  • Treasury Bill

  • Commercial Paper

  • Call Money

  • Commercial Bill

MCQ

Solution

Call Money

Explanation -

Interbank transfers are conducted using call money. Interbank transactions are not subject to a maturity date and are paid on demand. As per RBI standards, banks employ call money to maintain cash liquidity ratios.

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