Economics • Banking & FinanceEasy
In the context of the Indian banking system, what does the term 'Call Money Market' refer to?
A. A market for overnight lending and borrowing of funds among financial institutions.✓ Correct Answer
B. A secondary market where long-term government bonds are traded.
C. A retail platform for customers to execute foreign currency remittances.
D. A specialized window for microfinance institutions to raise equity capital.
💡 Solution & Explanation
The call money market operates as an overnight inter-bank segment where financial institutions borrow and lend unsecured funds for a single day. Alternative choices describe longer-term debt segments, retail platforms, or equity raising, which do not fit overnight operations. For banking exams, repo rate acts as the benchmark rate at which commercial banks borrow overnight funds from the Reserve Bank of India.
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