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What is money market?
The money market is a part of the finance-related system, where the finance-related amounts are traded. That is a place where we can buy or sell anything by finance or by any other form of finance.
Let us know other important facts about Money Market – What is Money Market – What is Money Market in English?
In the Indian Money Market, borrowing of funds is done for a short period of time. The Indian money market is also known as the credit market and generally includes banks.
Where short-term securities are traded and lending institutions and lending institutions interchange the transactions.
These short-term securities are liquid. There is no possibility of loss in their transactions.
Transactions in the money market are not in cash or currency but in the form of credit documents.
Examples of credit documents are exchange papers, promissory letters, commercial papers, treasury bills, etc.
The Indian money market also includes the Reserve Bank of India, commercial banks, co-operative banks, other financial institutions, and non-banking finance companies and financial institutions such as Life Insurance Corporation of India, Unit Trust of India, etc.
The Reserve Bank of India is the apex body of the Money market, the regulator of monetary and banking conditions in the country, and the supreme monetary official.
Type of Money Market-
The Indian money market is classified into organized and unorganized sectors. In the organized sector of the money market, the commercial banks which include private and public sector banks, and the unorganized sector of the money market include domestic bankers, money lenders, and non-banking financial institutions.
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The structure of the Indian money market is as follows-
Organized Sector – This sector consists of public and private sector banks and foreign exchange banks in addition to the Reserve Bank, which is the central bank of the country.
Unorganized Sector – Under this sector comes the native bankers and various money lending persons, known in various parts of the country by the name of a moneylender, Mahajan, etc. These are areas that are not legally recognized by any financial institution.