BANKING AFFAIRS

Detailed explanation-1: -Notes: Call Money / Notice Money Market is the most active segment of the money market in India.

Detailed explanation-2: -The main money market instruments are Treasury bills, commercial papers, certificate of deposits, and call money. It is highly liquid as it has instruments that have a maturity below one year. Most of the money market instruments provide fixed returns.

Detailed explanation-3: -Call money allows banks to earn interest, known as the call loan rate, on their surplus funds. It consists of overnight money and money at short notice for a period of upto 14 days. The call money market essentially serves the purpose of equilibrating the short-term liquidity position of banks and other participants.

Detailed explanation-4: -The Indian monetary market has two broad categories – the organized sector and the unorganized sector. Organized Sector: This sector comprises of the governments, the RBI, the other commercial banks, rural banks, and even foreign banks.

Detailed explanation-5: -What Is the Interbank Call Money Market? The interbank call money market is a short-term money market which allows for large financial institutions, such as banks, mutual funds, and corporations, to borrow and lend money at interbank rates, the rate of interest that banks charge when they borrow funds from each other.