InvestorQ : Can you throw some light on what exactly is the call money market?
Chandralekha Desai made post

Can you throw some light on what exactly is the call money market?

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Rashi Mehra answered.
1 year ago
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The call money market is an integral part of the Indian Money Market, where the day-to-day surplus funds (mostly of banks) are traded. The loans are of short-term duration varying from 1 to 14 days. The money that is lent for one day in this market is known as "Call Money", and if it exceeds one day (but less than 15 days) it is referred to as "Notice Money". Term Money refers to Money lent for 15 days or more in the Inter Bank Market.

Banks borrow in this money market for the following purpose:

To fill the gaps or temporary mismatches in funds

To meet the CRR & SLR mandatory requirements as stipulated by the Central bank

To meet sudden demand for funds arising out of large outflows

Thus call money usually serves the role of equilibrating the short-term liquidity position of banks

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