TIRM · TREASURYINVE

A MONEY MARKET

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Treasury Investment and Risk Management — Treasury Investment and Risk Management.

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Q

What is the Money Market?

A

The money market is a segment of the financial market where short-term borrowing and lending of funds takes place, typically for maturities of one year or less.

Q

What is the typical maturity period of money market instruments?

A

Up to one year (short-term instruments)

Q

What is the primary function of the money market in India?

A

The money market provides a mechanism for equilibrating the short-term demand and supply of funds, enabling banks, financial institutions, and corporates to manage their liquidity efficiently.

Q

What is the 91-day Treasury Bill used for in the Indian money market?

A

Benchmark short-term government borrowing instrument

Q

Who regulates the money market in India?

A

The Reserve Bank of India (RBI) regulates and oversees the money market in India under the provisions of the Reserve Bank of India Act, 1934.

Q

What is the maximum maturity period for Commercial Paper in India?

A

One year (up to 12 months)

Q

What is the Call Money Market?

A

The call money market is a segment where funds are borrowed and lent on an overnight basis, primarily between scheduled commercial banks to meet their short-term liquidity needs and maintain CRR requirements.

Q

What is the minimum tenure of a Certificate of Deposit issued in India?

A

Seven days

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