Here are the key points to remember in this chapter

» The call money market, which deals in overnight funds, is a key segment of the money market in India.

» Call money is overnight funds in the banking system - borrowed and advanced for not more than one day.

» If the period is more than one day and upto 14 days it is called "Notice Money".

» Call rates are the barometer of short-term liquidity in the economy.

» Scheduled banks (other than RRBs) and Co-operative Banks (other than Land Development banks) are allowed to borrow and lend in call market for adjusting their cash reserve requirements.

» Call market is a completely inter-bank market hence non-bank entities are not allowed access to this market. Primary dealers can however transact in the market.

» Interest rates in the call and notice money markets are market determined.

» The turnover in the call/notice money market depends on the amount of surplus funds available with some participants and the requirement of funds of some other participants.

» All dealings in call/notice money on screen-based negotiated quote-driven system (NDS-CALL) launched since September 18, 2006 do not require separate reporting.

» It is mandatory for all Negotiated Dealing System (NDS) members to report their call/notice money market deals (other than those done on NDS-CALL) on NDS.

» Deals should be reported within 15 minutes on NDS.

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