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Forign trade product import

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Q: What are the problems in indian money market?
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Characteristic of money market?

Charecteristics of Indian Money Market1.Co-existence of organized and unorganized sectors:The peculiar feature of the Indian Money Market is the co-existence of organized and unorganized sectors. The organized sector consists of the Reserve Bank of India, State Bank of India and its affiliates, Commercial Banks, etc., The Reserve Bank of India supervises these banks. Indigenous bankers and others belong to unorganized sector and thissector is not coming under the purview of Reserve Bank of India. We can notice the lack of co-operation and co-ordination between these two sectors.2.Lack of Integration:Indian Money Market is divided into several segments. They are loosely connected to each other. The various segments of Indian Money Market are not well co-ordinated. It leads to unhealthy competition among the segments.3.High volatile money market:The important feature of the Indian Money Market is the seasonal stringency of funds. The demand for money in the Indian Money Market is of seasonal in character. The money rates fluctuate from one period to another because during busy season more money is demanded.4.Diversified money rates of interest:Diversified money rates of interest is an important feature of Indian Money Market. Since funds can not move freely from one section to another, money rates of interest differ. Lack of co-ordination among various segments of money market is also responsible for diversified money rates of interest. But in recent years Reserve Bank of India is making all efforts to bring down the diversity in interest rates.5.Absence of well organized bill market:Bill market in India is not organized and well developed. The market for government and semi government securities is also not popular. Treasury Bill Market is also not well developed.6.Lack of well organized banking system:Existence of organized commercial banking system is pre requisite of a developed money market. In India, the development of commercial banking is uneven and not adequate. There are only few big banks in the country which are extremely smaller in number.7.Limited availability of credit instruments:The Indian Money Market does not have adequate short term credit instruments. The important credit instruments are call money market and treasury bills. However after 1988, Reserve Bank of India started introducing new instruments like 182 days treasury bill, 364 days treasury bill, certificate of deposits, commercial papers etc.,8.Few Lenders:The lenders in the Indian Money Market are few. Entry into the money market is strictly regulated. But the borrowers are large in number. Therefore this market is not very active and vibrant.9.Easy flow of foreign funds:Since 1991 foreign funds is easily flowing into India. Inspite of the flow it is not enough to meet the funds requirements of the country.10.Shortage of capital:Indian Money Market is facing the problem of capital shortage. Hence it can not meet the requirements of trade and commerce. Shortage is mainly due to low level of savings, inadequate banking facilities etc.,