Important suggestions may be put forward for the improvements of Indian Money Market are given below:
1. Regulation of Indigenous Banking:
The regulation of indigenous banking by the Reserve Bank will definitely improve the working of Indian Money Market. These banks should be brought under the overall control of the Reserve Bank of India.
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The Reserve bank should provide rediscounting and loan facilities to these banks.
2. Development of Bill Market:
The bill market should be developed. It is essential to provide increased rediscounting facilities to promote the establishment of a bill market in the country. The Reserve bank should make serious efforts for the establishment of a sound and developed bill market.
3. Standardisation of Hundies:
In order to set up a developed bill market, it is necessary that hundies should be standardised A uniformity of rules should be laid down with regard to the matter, language and usage of hundies.
4. Warehousing Facilities:
The present warehousing facilities should be further extended so that more people can seek loans from the banks on the basis of certificates from the licensed warehouses.
5. Reorganisation and Increase in the Number of Clearing Houses:
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For the proper development of the Indian Money Market it is essential to increase the number of clearing houses. The clearing houses should be reorganised so as to make them more efficient and effective.
6. Expansion of Remittance Facilities:
The remittance facilities mean the facilities to transfer funds cheaply and quickly. These facilities should be extended by the Reserve Bank to indigenous bankers.
7. Elimination of Variations in the Rate of Interest:
The Reserve bank should take proper steps to eliminate the variations in the rate of interest between organised and unorganised sectors.
8. Lower Stamp Duty:
The stamp duty on bills should be lowered. It will make bills more popular.