The main features of Indian Money Market are as follows:
1. Dichotomy:
The Indian Money market is divided between two sectors, namely organised sector and unorganised sector. There is very little cooperation and contact between them.
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Consequently the rate of interest in both the markets varies widely.
2. Seasonal Variations:
Considering the demand for funds, there are two seasons, the busy season and slack season. The busy season covers the period from November to April when agricultural products come into the market.
There is great demand for funds during this period. The slack season covers the period between May and October. The funds begin to be repaid and there is substantial fall in the demand for funds.
3. Inter-Call Money Market:
The core of the Indian money market is the inter-bank call money market. It is the most sensitive sector of the money market.
4. Predominant Place of Government Securities:
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In the Indian money market, the predominant place is enjoyed by government and semi government securities.
5. Absence of Acceptance and Discount Houses:
There is almost complete absence of acceptance and discount houses in the Indian money market. This is due to the underdeveloped bill market in India.
6. Isolation from Foreign Money Market:
The Indian money market is isolated from foreign markets. There is hardly any movement of funds between Indian Money Market and foreign markets.
7. Variety of Financial Institutions:
The Indian market is characterised by the presence of a large number of financial institutions such as non-banking financial intermediaries, cooperative banks, Export-Import banks. They cater to the financial needs of different sectors.