BANKING AFFAIRS

Detailed explanation-1: -Money lent for one day is called call money. Money lent for more than one day and less than 15 days is called Notice Money.

Detailed explanation-2: -Money market transactions are categorized as follows: Borrowing/Lending for 1 day is known as Call Money. Borrowing/Lending for 2-14 days is known as Notice Money.

Detailed explanation-3: -Banks and PDs borrow and lend overnight or for the short period to meet their short term mismatches in fund positions. This borrowing and lending is on unsecured basis. ‘Call Money’ is the borrowing or lending of funds for 1day.

Detailed explanation-4: -Call money is a short-term loan which comes with interest. The tenure of call money loan ranges from one day to fourteen days after the disbursement of the amount is made by the lending institution.

Detailed explanation-5: -The call money market and notice money market are two important components of the Indian Money Market where funds are traded between several banks to meet their liquidity requirements. However, these two markets offer loans for a short term (1 to 14 days) and are thus for urgent funding requirements.