Money Market

March 5, 2008

Nature and Functions

Money Market, we are talking here. Financial industry also require crm software or sfa software to deal with it’s day to day requirement. Today, we are going to talk about Nature and Functions of Money Market with reference to india.

The money market is a market for short-term financial assets that are close substitutes for money. It facilitates the exchange of money for new financial claims in the primary market as also for financial claims, already issued, in the secondary market. It provides a mechanism for meeting the liquidity needs of the lenders and the short-term requirements of borrowers with minimum transaction cost and delay. There is strictly no demarcated distinction between the short-term money and the long-term capital market, and in fact there are integral links between the two markets as the spectrum of instruments in the two markets invariably from a continuum. However, as a matter of practice, money market deals in financial instruments/arrangements which are for a short period not generally exceeding a maturity period of 180 days.

According to the Working Group on Money Market, popularly known as Vaghul Committee, appointed by the Reserve Bank of India in September 1986, the broad objectives of the money market are threefold: first, it should provide an equilibrating mechanism for evening out short-term surpluses and deficits. Secondly, the money market should provide a focal point for Central Bank intervention influencing liquidity in the economy. Thirdly, it should provide reasonable access to users of short-term money to meet their requirements at a realistic price.

ref: Insurance Agency Management Software, Insurance CRM & SFA Software

1 Comment »

  1. Hi,
    Such as nice blog you have here on Nature and Functions. I have found that you have good content on Insurance Agency Management Software. I must appreciate your effort for your blogs.

    Comment by Sam Rayburn — March 7, 2008 @ 6:19 am

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