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Classification of money market

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Presentation on theme: "Classification of money market"— Presentation transcript:

1 Classification of money market
On the basis of duration investment Debt market Equity market Money market Capital market

2 Discount and finance house of INDIA Money lenders
MONEY MARKET organized unorganized Banks No regulators NBFC`S Indigenous bankers Discount and finance house of INDIA Money lenders Pvt.cos.which operates as banks for borrowings GOVT.OF INDIA others

3 TREASURY BILLS (T-BILLS)
Debt obligations of the government that have maturities of one year or less is normally called treasury bills . At present THE GOVERNMENT OF INDIA issues three types of treasury bills through auctions namely:- 91 -days 182- day 364 day Issued to individuals ,organizations and financial institutions There are no treasury bills issued by STATE GOVERNMENTS. Minimum value of treasury bill is rs and in multiples of TREASURY BILLS is also known AS GILT EDGED SECURITY.

4 Auctioned every Wednesday
91 –days t-bills Maturity 91 days Auctioned every Wednesday Notified amount rs 100 crores 182 –days t-bills Maturity 182days Auctioned every Wednesday(non reporting week) Notified amount rs 100 crores 364 –days t-bills Maturity 364 days Auctioned alternate Wednesday(reporting week) Notified amount rs 500 crores

5 Generally sold on discount basis
COMMERCIAL PAPERS Commercial papers is an unsecured money market instrument issued in the form of promissory notes. Generally sold on discount basis Organizations can issued commercial papers either directly or through banks or merchant banks called as dealers These instruments are normally issued in the multiple of 5 lakhs. Minimum time period:- 7 days Maximum time period:- 364 days

6 CERTIFICATE OF DEPOSITS
A CERTIFICATE OF DEPOSITS is a negotiable promissory notes ,secure and short term,of upto a year ,in nature Are ISSUED by BANKS AND FINANCIAL INSTRUMENTS Maximum maturity period:- 364 days Introduced :-1989 Minimum maturity period:- 7 days AMOUNT RS 1 LAKHS AND IN MULTIPLE OF 1 LAKHS

7 DATED GOVERNMENT SECURITIES
Are securities which carries a fixed or floating coupon (interest rates)which is to be paid on face value on half yearly basis. Generally ,he tenor of dated securities is between 5 yrs to 30 years. Maximum 40 yrs

8 Issued at a discount to face value.
ZERO COUPON BONDS Issued at a discount to face value. No interest is paid during the period of the bond. But at a time of maturity full payment of the face value is done.

9 First introduced by IDBI in june 1994 followed by ICICI
DEEP DISCOUNT BONDS First introduced by IDBI in june 1994 followed by ICICI Similar to zero coupon bonds


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