Features of Indian Money Market

1) Lack of integration

The Indian money market is divided into sectors : organised and unorganised. As the two sectors are completely separate from each other, their financial operations are quite independent and whatever goes on in one sector has a small impact on the other. There is more of competition then co-operation and co-ordination between various components of Indian Money Market.

2) Lack of rational interest rate structure

It means in all forms of money market, interest rate are different and not regulated. This is mainly due to lack of co-ordination between institutions. Moreover there are seasonal fluctuations in the interest rates.

3) Underdeveloped market structure

In India only call money market is developed form of money market. Commercial paper market, certificate of deposit market, treasury bill market, commercial paper market are narrow and underdeveloped.

4) Shortage of money in money market

Due of less income and less savings people does not have ability to save and invest in money market. Moreover , lack of banking facilities and literally people does not have banking habits and due to all these reasons funds cannot be generated in money market.

One Response to “Features of Indian Money Market”
  1. zvodretiluret August 2, 2018

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