The money market is the part of a financial market which deals in borrowing

and lending of short term loans generally for a period of less than or equal
to 365 days.

Seasonality

Multiplicity of Interest Rates

Limited Instruments

Absence of Integration

Dichotomise Structure

High Volatility in Call Money Marker

Lack of Organized Bill Market
1. To maintain monetary equilibrium.

2. To promote economic growth.

3. To provide help to Trade and Industry.

4. To help in implementing Monetary Policy.

5. To help in Capital Formation.

6. To provides non-inflationary sources of finance to government.

Indian Money
Market
Organized
Sector
Unorganized
Sector
Cooperative
Sector
Organized
Sector
RBI
Commercial
Banks
Public Sector
Bank
SBI
Cooperative
Banks
Other National
Banks
Private Sector
Bank
Indian Banks
Foreign Banks
Discount and
Finance
House of India
Developed
Banks
IDBI, ICICI,
LIC, etc.
Unorganized
Sector
Indigenous
Banks
Money
Lenders
Cooperative
Sector
State Cooperative
Bank
Central
Cooperative
Banks
State Land
Development
Bank
Central Land
Development
Banks
Treasury bill
Repurchase agreement
Commercial paper
Certificate of deposit
Bankers acceptance


Shortage of Commercial Bill

Multiple rate of interest

Shortage of Investment Instruments

Absence of Integration

Lack of Organized Banking System

Insufficient Funds or Resources

Less number of Dealers

Money Market Mutual Fund (MMMFs)

Development of New Market Instruments

Establishment of the DFI

Deregulation of the Interest Rate

Liquidity Adjustment Facility (LAF)

Electronic Transactions

Establishment of the CCIL




DIRECT INVESTMENT
Investment in money
market fund