Money market Money market is the component of financial markets which mainly deals with the short term

lendings and borrowings using the instruments such as: 1) 2) 3) 4) 5) Call money T-bills Commercial bills Certificates of deposit Bills of exchange.

The money market does not have any physical market like other markets such as stock market, it usually deals completely over the computer mainly with big corporate and the dealers as their participants. Call money market: The call money market is the part of the national money market, which deals with short term lending and borrowing from the banks, the call money market mainly looks over the trading of the surplus funds of the banks and the deficits of the bank which creates demand in this call market. The interest rate at which the trading takes place in this is known as the call rate. It is the short term market mostly between one day and fortnight. In the Indian call money market brokers are not allowed.

The call money market differs from country to country, the only similarities would be the short term of the market and the supply of funds from surplus and creating demand from the deficit of the banks, and the differences would be from participants of the market and the central government policies and the different types of securities and the instruments that country uses. As we have above discussed about the Indian call money market briefly, there are certain differences when we take other countries such as US & UK. US call money market: Compared to Indian call money market, the US market is a sophisticated and yet complicated market, these markets are of two types: 1) federal funds 2) call money market proper in the federal funds the market deals with the short term trading of the surplus of the funds, it only happens between the banks of the U