Financial Awareness - Risk, Stability & Emerging Finance
What is the primary purpose of the Call Money Market for banks in India?
What is the primary purpose of the Call Money Market for banks in India?
medium Q6 of 15
Step-by-Step Solution
Step 1: Understand the purpose of Call Money Market
Call Money Market is used by banks for short-term fund borrowing and lending.Step 2: Apply the concept
The primary purpose is to manage daily liquidity mismatches and meet reserve requirements.Final Answer:
To manage daily liquidity requirements → Option AQuick Check:
Call Money Market purpose = daily liquidity management ✅
Quick Trick: Call Money Market is a liquidity adjustment tool for banks.
Common Mistakes:
- Confusing it with capital raising or investment activities.
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