Sip project on recent trends in indian money market

Sip project on recent trends in Indian money market. I prepared this for presentation in SIP training programme of ICSI.

1. RECENT TRENDS IN INDIA

2. This project is prepared by team members of 60 th STUDENT INDUCTION PROGRAMME started from 22 nd of July 2013 to 29 th of July 2013. PARTICIPANTS ARE AS FOLLOWS :- Subham Kumar Saw (Leader), (REG. NO:- 140031761/02/2013) Sapna Kumari , (REG. NO:- 120643200/08/2012) Sweta Sharma , (REG. NO:- 120501239/03/2011) Ankita Roy , (REG. NO:- 120670388/08/2012) Harshit Agarwal , (REG. NO:- 140023231/02/2013) Deepak Bengani , (REG. NO:- 140004894/02/2013) Ankita Gupta , (REG. NO:- 140023266/02/2013) Archana Gupta , (REG. NO:- 120536603/08/2011) Manjari Bangur , (REG. NO:- 120536873/08/2011) Ankit Khandelwal . (REG. NO:- 120647069/08/2012)

3. INTRODUCTION As per RBI definitions “ A market for short terms financial assets that are close substitute for money, facilitates the exchange of money in primary and secondary market”. The money market is a mechanism that deals with the lending and borrowing of short term funds (less than one year). A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. It doesn’t actually deal in cash or money but deals with substitute of cash like trade bills, promissory notes & govt papers which can converted into cash without any loss at low transaction cost. It includes all individual, institution and intermediaries.

4. Objective of Money Market To provide a parking place to employ short term surplus funds. To provide room for overcoming short term deficits. To enable the central bank to influence and regulate liquidity in the economy through its intervention in this market. To provide a reasonable access to users of short-term funds to meet their requirement quickly, adequately at reasonable cost.

5. Features of Indian money market It is a market purely for short-terms funds or financial assets called near money. It deals with financial assets having a maturity period less than one year only. In Money Market transaction can not take place formal like stock exchange, only through oral communication, relevant document and written communication transaction can be done Transaction have to be conducted without the help of brokers. It is not a single homogeneous market, it comprises of several submarket like call money market, acceptance & bill market. The component of Money Market are the commercial banks, acceptance houses & NBFC (Non-banking financial companies).

6. STRUCTURE OF INDIAN MONEY MARKET

7. Instruments OF MONEY MARKET

8. RECENT TRENDS OF INDIAN RUPEE Analysis of Indian Rupee v/s US Dollar from 2009 to 2013 (July), The value of Indian Rupee is reducing day by day against US Dollars in comparison with other countries. High Inflation rates & huge amount of deficits leads to reduction of value of money.

9. Reforms made in the Indian Money Market Deregulation of the Interest Rate   Money Market Mutual Fund Establishment of the DFI   Liquidity Adjustment Facility Electronic Transactions Establishment of the CCIL Development of New Market Instruments

10. Drawbacks of Indian money market Though the Indian money market is considered as the advanced money market among developing countries, it still suffers from many drawbacks or defects. These defects limit the efficiency of our market, such as :- Absence of Integration Multiple rate of interest Insufficient Funds or Resources Shortage of Investment Instruments Shortage of Commercial Bill Lack of Organized Banking System