Q. With reference to the Call Money Market in India, consider the following statements:
1.The call money market deals with collateralised borrowing and lending for a period of up to 7 days.
2.Scheduled commercial banks, cooperative banks, and primary dealers participate in the call money market.
3.The Reserve Bank of India specifies prudential limits for participants in the call money market.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation:
- The call money market deals with uncollateralised overnight borrowing and lending (not for up to 7 days, and not collateralised).
- Scheduled Commercial Banks (excluding RRBs), cooperative banks (except land development banks), and primary dealers participate in the market.
- The RBI specifies prudential limits on borrowing and lending for each participating entity, as per its guidelines.
Source: Indian Economy (Dr. Ramesh Singh)
