What do you mean by call money, notice money and term money?
Call money, notice money and term money:
· It is an important segment of the Indian Money Market.
· Under call money market, funds are transacted on overnight basis and under notice money market, funds are transacted for the period between 2 days and 14 days.
· In the case of term money, funds are borrowed for more than fourteen days.
· Banks borrow in these markets in order to fill the gaps or temporary mismatches in funds allocation to meet the mandatory requirements of cash reserve ratio and statutory liquidity ratio and to meet the sudden demand for funds arising out of large outflows.
· Banks, primary dealers, development finance institutions, insurance companies and select mutual funds are participants in this market.
