Download App

FINANCIAL MARKET — OCM STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET3 Marks
Question
Give short information about call money and notice money.
✓

Answer

Call money and Notice Money :
  • As per the rule of Reserve Bank every merchant has to maintain minimum cash which is known as cash reserve.
  • To maintain minimum cash, sometimes bank borrows from other banks.
  • Due this ‘call money’ market has become an important component of money market.
  • Call money market includes :
  • Call money and notice money.
  • Call money : When money is lent or borrowed for one day only, it is called ‘call money’.
  • Mostly only banks participate in call money market.
  • So it is called “Inter Bank Call Money market.”
  • As per the rules of the Reserve Bank, banks have to maintain cash reserve.
  • The bank having shortage of cash, borrows cash for one day from other banks which has surplus cash.
  • In short one day loan is ‘call money.’
  • Notice money :
  • When money is lent for $2$ to $14$ days, it is called ‘Notice-Money. Its duration is more than that of call money.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Each" from FINANCIAL MARKET→FINANCIAL MARKET — all question types→OCM STD 12 Commerce question papers→Gujarat Board STD 12 Commerce question papers→Gujarat Board question paper generator→

Similar questions

Ideally it is the buyer who has to accept the bill, then why does he approach the bank for the same?
→
Which legal restrictions does the company face while setting-up its capital structure?
→
What is selection? Explain briefly.
→
Management is a process and not just an activity. Explain.
→
“In functional organization, functions have more importance than department”-Explain.
→
What are the advantages of packaging?
→
Define Globalisation and discuss any four negative effects of Globalisation.
→
State the difference between Training and Development.
→
Explain: (i) Principle of Scalar Chain of Power
$\quad$$\quad$$\quad$$\quad$(ii) Principle of Initiative
→
What is a formal organization?
→