GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When the call money rate is low
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When the call money rate is high
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When money availability in the market is very high
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When participants in the money market are ready to lend
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Detailed explanation-1: -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.
Detailed explanation-2: -’At call’ money is repayable on demand, whereas ‘short notice’ money implies that notice of repayment of up to 14 days will be given. After cash, money at call and short notice are the banks’ most liquid assets.
Detailed explanation-3: -A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit cheaper in comparison for banks raise funds from these sources. Was this answer helpful?