CALL MONEY MARKET

CALL MONEY MARKET IS A MARKET

FOR VERY SHORT TERM FUNDS
REPAYABLE ON DEMAND WITH
MATURITY PERIOD VARYING
BETWEEN ONE DAY TO A FORTHNIGHT.
COMMERCIAL BANKS AND CO
OPERATIVE BANKS ARE THE
PARTICIPANTS
RECETLY DHFI, STCI, LIC, GIC, HAVE
JOINED.
LOCATED IN BIG INDUSTRIAL AND
COMMERCIAL CENTERS LIKE MUMBAI,
 TREASURY BILL MARKET
 KIND OF FINANCE BILL OR PROMISORY NOTE
ISSUED BY GOVT. TO RAISE SHORT TERM FUNDS.
 AS PER CATEGORISATION TBs ARE AD HOC, TAP
AND AUCTION BILLS.
 NOW ALL THE TBs ARE SOLD THROUGH AUCTION.
 INTEREST RATES ARE DETERMINED BY MARKET
FORCES.
 HIGH LIQUIDITY, ABSENCE OF RISK, ASSSURED
YIELD, LOW TRANSACTION COST, NEGLIGIBLE
CAPITAL DEPRECIATION ETC ARE SOME OF THE
FEATURES.
COMMERCIAL BILLS MARKET
 COMMERCIAL BILL OR BILLS OF EXCHANGE
ARE SHORT TERM, SELF LIQUIDATING MONEY
MARKET INSTRUMENTS.
 TWO MAIN TYPES ARE DEMAND BILL AND
USANCE BILL.
 BILLS CAN ALSO BE CLEAN BILL,
DOCUMENTARY BILL, INLAND BILL FOREIGN
BILL ETC.
 MATURITY: USANCE BILL 30 TO 120 DAYS,
EXPORT BILL 90 DAYS, IMPORT BILL 60 DAYS,
INTERNAL TRADE BILL 90 TO 180 DAYS.
 MARKET FOR COMMERCIAL
PAPER.
 INTRODUCED IN INDIA IN JUNE 1989.
 CPs ARE UNSECURED, NEGOTIABLE, SHORT TERM,
USANCE PROMISSORY NOTES WITH FIXED
MATURITY. THEY ARE SAFE AND HIGHLY LIQUID.
 CPs ARE ISSUED IN LARGE DENOMINATIONS BY
LEADING, NATIONALLY REPUTED, HIGHLY CREDIT
WOTHY LARGE MANUFACTURING CONCERNS IN
PUBLIC AND PRIVATE SECTOR.
 MATURITY 30 DAYS TO SIX MONTHS.
 INTEREST RATES ARE MARKET DETERMINED.
MARKET FOR CERTIFICATE OF
DEPOSITS.
 INTRODUCED IN INDIA IN JAN 1990.
 MARKETABLE RECEIPTS IN BEARER OR
REGISTERED FORM FOR A SPECIFIC PERIOD AND
INTEREST.
 TRANSFARABLE, NEGOTIABLE, SHORT TERM,
FIXED INTEREST BEARING, MATURITY DATED,
HIGHLY LIQUID AND RISKLESS.
 CAN BE ISSUED TO INDIVIDUALS, CORPORATIONS,
COS., TRUSTS, FUNDS, ASSOCIATIONS & NRIs.
 MATURITY: 3 MONTHS TO 1 YEAR.
 INTEREST RATES ARE MARKET DETERMINED.
 THE DISCOUNT MARKET
 CENTRAL BANKS IN ALL THE COUNTRIES
HELP MONEY MARKET BY PROVIDING
DISCOUNTING AND REFINANCE FACILITIES.
 INSTITUTIONS SUCH AS IDBI, NABARD, EXIM
BANK, SIDBI ETC. PLAY AN IMPORTANT
ROLE IN THE DISOUNT MARKET.
 THE TERM DISCOUNTING NOW OFFERS
NOT ONLY TO BILLS OF EXCHANGE BUT TO
DIRECT LOANS AND ADVANCES.
 DISCOUNT AND FINANCE
HOUSE OF INDIA (DFHI)
 SET UP IN APRIL 1988
 SPECIALISED INSTITUTION TO OPERATE IN
DISCOUNT MARKET.
 JOINT STOCK CO. OWNED BY RBI, PUBLIC
SECTOR BANKS AND FIs.
 AIMS AT SMOOTHENING LIQIDITY
IMBALANCES.
 DEALS IN TREASURY BILLS, CDs, CPs, CALL
AND NOTICE MONEY ETC.
 ALSO EXTENDS TO REPOS I.E. BUY BACK
FACILITIES TO BANKS AND FIs
 SECURITIES TRADING
CORPORATIN OF INDIA (STCI)
 SET UP IN 1994.
 WAS SET UP WITH A VIEW TO PROMOTE A
GOOD SECONDARY MARKETS FOR DEBT
INSTRUMENTS.
 DFHI AND STCI ARE ACCREDITED PDs IN
GOVERNMENT SECURITIES.
 STCI AND DHFI HAVE NOT BEEN ABLE TO
FULFIL THEIR PRIMARY OBJECTIVES
NAMELY,TO DEEPEN AND ACTIVATE TBs
AND LONG DATED GOVT. SECURITES
MARKETS.
 MARKET FOR FINANCIAL
GURANTEES.
 QUITE WELL DEVELOPED TODAY.
 INSTITUTIONAL GUARANTEE HAVE NOW
BECOME AVAILABLE TO SMALL SCALE BUSINESS
UNITS, OTHER SMALL BOROWERS AND
FARMERS.
 WITH SPECIALISED GUARANTEE AGENCIES
UNSECURED GURANTEES HAS ALSO
INCREASED.
 AVAILABLE EXCEPT FOR THOSE BEYOND 15
YEARS.
 CREDIT GURANTEE ORGANISATION (CGO),
DEPOSIT INSURANCE AND CREDIT GURANTEE
CORPORATION (DICGC), ECGC ETC.