Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET5 Marks
Question
Write short notes on Organized Money Market.
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Answer
Organized Money Market :
The financial institutions and means for which specific norms and regulations are formed are included in organized money market,
It consists of the Reserve Bank of India, Merchant Banks, Mutual Fund etc.
Besides treasury bill, certificate of deposit, call money, bond etc. instruments are included in organized money market.
The Reserve Bank of India makes changes in the rate of interest as per requirement to maintain sufficient liquidity in money market.
Organized money market is systematically co-ordinate and regulated by the Reserve Bank of India.
Unorganized Money Market :
Financial institution which carry out the activities of borrowing and lending without centralized regulations are included in unorganized money market.
It includes Deshi bankers, money lenders, shroffs, pawnee etc.
There is no co-ordination among them.
Their activities are carried out not by centralized norms but by their own terms and conditions.
Activities of unorganized money market are mainly developed in rural areas.
It is found in restricted ratio in urban area.
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