Features of Developed Money Market | Recent developments in India’s money market
What are the features of developed money market ? Give the recent developments in India’s money market.
Contents
Features of Developed Money Market.
The money market should be efficient and fully developed. In India here are some highly developed money market while others are not well developed.
Following are the essential features of a developed money market:
1. Well Organised Banking System: The banking system is plays vital role in linking the central bank and money markets. These are nerve entre of the money market. Well organised commercial banking system and highly developed money market co-exist.
2. Continuous Availability of Readily Acceptable Negotiable instruments: Continuous availability of readily acceptable, negotiable instruments i.e. TBs, B/E etc. is essential. It requires availability of negotiable securities and the presence of brokers and dealers.
3. Existence of a Central Bank: The central bank acts as the bank of banks. It keeps their reserves and provides finance in difficulties Commercial banks can convert their assets into cash. The central bank play a ole of leader, guide and controller of money market.
4. Sufficiency of Funds: There must be sufficiency of funds to finance transactions. These funds may come from within the country and also from other countries.
Other Features: These are as under:
(i) Availability of sub-markets;
(ii) Existence of secondary market;
(iii) Existence of large demand and supply of funds.
Recent Developments in India’s Money Market
The money market is undergoing structural changes. Various step have been taken to make it more active and broad market.
Following are the recent developments of money markets:
1. Unorganised money market has integrated with the organise sector.
2. In the structure and instrument some new innovations have be introduced.
3. Various steps have been taken to widen the call market.
4. Exemption from stamp duty is provided.
5. Indian money market offers full scope for the play of market force determination of interest rates.
6. Other Developments :
- Constitution of credit rating agencies,
- Promotion of bill centre,
- Establishment of DFHI,
- Adoption of appropriate monetary policy,
- Setting up of STCI.
Related Link
- Features of Developed Money Market | Recent developments in India’s money market
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