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Location Aspect in Call Money Market

Discuss Location Aspect in Call Money Market within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; Location Call money markets are mainly located in big industrial and commercial centers like Mumbai, Calcutta, Chennai, Delhi and Ahmedabad. ...

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Sunanda K. Chavan
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Location Aspect in Call Money Market - September 16th, 2010

Location

Call money markets are mainly located in big industrial and commercial centers like Mumbai, Calcutta, Chennai, Delhi and Ahmedabad. These are also the places where stock exchanges are located. Among these centers, Mumbai and Calcutta are more significant from the point of view of the size and buoyancy of the market.

The predominant role of Mumbai in this context is understandable as the head offices of RBI, many other banks, UTI, and LIC are located there; it also has the biggest stock exchange in the country. There is a tendency for funds to gravitate towards Mumbai and Calcutta. The development of communications system has facilitated some cross-country flow of funds. The geographical integration of call markets, however, is still far from perfect resulting in considerable differences in the call rates prevailing in different centers.


It has been reported that, apart from the well-recognized markets in big cities, there are a large number of local call markets developed and operated by ingenious local bankers. For example, in Saurashtra in Gujarat when large payments or remittances are to be made, the local banks help each other with overnight funds. Among some banks, there are regular arrangements without the payment of interest.

For other banks, the price of overnight money is 2 paise per hundred rupees per night. When one bank presents a cheque for, say Rs. 5 lakhs to another bank which has no funds, the paying banker approaches the collecting banker to let the funds remain with it overnight and pays at the rate of interest mentioned above.
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Re: Location Aspect in Call Money Market
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Rose Marry
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Re: Location Aspect in Call Money Market - April 13th, 2016

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Originally Posted by sunandaC View Post
Location

Call money markets are mainly located in big industrial and commercial centers like Mumbai, Calcutta, Chennai, Delhi and Ahmedabad. These are also the places where stock exchanges are located. Among these centers, Mumbai and Calcutta are more significant from the point of view of the size and buoyancy of the market.

The predominant role of Mumbai in this context is understandable as the head offices of RBI, many other banks, UTI, and LIC are located there; it also has the biggest stock exchange in the country. There is a tendency for funds to gravitate towards Mumbai and Calcutta. The development of communications system has facilitated some cross-country flow of funds. The geographical integration of call markets, however, is still far from perfect resulting in considerable differences in the call rates prevailing in different centers.


It has been reported that, apart from the well-recognized markets in big cities, there are a large number of local call markets developed and operated by ingenious local bankers. For example, in Saurashtra in Gujarat when large payments or remittances are to be made, the local banks help each other with overnight funds. Among some banks, there are regular arrangements without the payment of interest.

For other banks, the price of overnight money is 2 paise per hundred rupees per night. When one bank presents a cheque for, say Rs. 5 lakhs to another bank which has no funds, the paying banker approaches the collecting banker to let the funds remain with it overnight and pays at the rate of interest mentioned above.
Hi there,

Here I am uploading Notes on Capital, Commodity and Money Market, so please download and check it.
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File Type: pdf Notes on Capital, Commodity and Money Market.pdf (125.1 KB, 1 views)
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