Economics • Banking & FinanceMedium
In the context of Indian financial markets, what does 'Call Money' refer to?
A. Overnight borrowings and lendings transacted among commercial banks in the inter-bank market✓ Correct Answer
B. Retail telephone banking services offered to priority account holders
C. Emergency financial assistance provided by the central bank against government securities
D. Foreign currency deposits mobilized from non-resident citizens through scheduled banks
💡 Solution & Explanation
Call money refers to overnight financial transactions where funds are borrowed and lent for a period of one day in the inter-bank market. Notice money involves funds lent for up to fourteen days, while term money covers maturities exceeding fourteen days. Emergency central bank loans relate to the marginal standing facility rather than inter-bank call markets. Inter-bank interest rates in this segment serve as key indicators of immediate banking liquidity conditions.
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