Which money market instrument is used for inter bank transactions ?
Which money market instrument is used for inter bank transactions ?
Solution
✅ Correct Option: 4
Call money is a short-term finance used for inter-bank transactions, typically overnight to 15 days. Banks with surplus funds lend to banks short of funds to maintain their Cash Reserve Ratio. Commercial Paper is issued by large companies, Treasury Bills by the RBI on behalf of the government, and Certificate of Deposit by commercial banks to raise funds.
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2022: 15 July Shift 2