Question

Which instrument of money market is generally used for inter-

bank transactions?

(a) Treasury bills

(b) Commercial papers

(c) Call money

(d) Both (a) and (c).​

Answer 1

Answer:

C) CALL MONEY

Explanation:

Such an instrument of the money market is known as call money. One important factor is that this interbank transaction has no maturity date, it is payable on demand. Mostly banks depend on call money to main their cash liquidity ratio as per RBI guidelines.

Answer 2

Answer

c

Explanation:

Such an instrument of the money market is known as call money. One important factor is that this interbank transaction has no maturity date, it is payable on demand. Mostly banks depend on call money to main their cash liquidity ratio as per RBI guidelines. The rate of interest on call money is known as call rates.