This is a market for short term financial

assets that are close substitutes for money,

facilitates the exchange of money for new
financial claims in the primary market as also
for financial claims, already issued, in the
secondary market.
- - - RESERVE BANK OF INDIA
 The money market is the collective name
given to the various firms and institutions
that deal in the various grades of near
money.
Whereas, capital market is the
collective name given to various firms and
institutions that deal with the long term
funds, exceeding one year normally.
1. It is a market purely for short term funds or
financial assets called near money.
2. It deals with financial assets, having a
maturity period upto one year
3. It deals only those assets which can be
converted into cash readily without loss and
with minimum cost of transaction.
4. Quick processing of relevant documents
5. Transactions may be conducted with the
help of intermediaries
6. There is an existence of single homogenous
market.
7. Banks and other financial institutions are
instrumental for money market.
1. To provide a parking place to employ short-
term surplus funds.
2. To provide a room for overcoming short
term deficits.
3. To enable the central bank to influence and
regulate liquidity in the economy through its
intervention in this market.
4. To provide a reasonable access to the users
of short-term funds to meet their
requirements quickly, adequately and at
reasonable costs.
1. Highly organised banking system
2. Presence of a Central Bank
3. Availability of a central Bank
4. Existence of sub-markets
5. Ample resources
6. Existence of secondary markets
7. Demand and supply of funds
1. Development of trade and industry
2. Development of capital market
3. Smooth functioning of commercial banks
4. Effective central bank control
5. Formulation of suitable monetary policy
6. Non inflationary source of Finance to
Government
1. Central bank
2. Commercial banks (Major player)
3. Non Banking Financial Institutions
4. Discount houses and acceptance houses
1. Call money market
Very short period loans (1 to 14 days)
1. Commercial Bills market or Discount market
(Normally 3 months)
2. Acceptance market (Normally 3 months)
3. Treasury Bills market (normally 3 months)