Call Money Market in India

A Financial Market can be defined as the market in which financial assets are created or transferred. As against a real transaction that involves exchange of money for real goods or services, a financial transaction involves creation or transfer of a financial asset. Financial Assets or Financial Instruments represents a claim to the payment of a sum of money sometime in the future and /or periodic payment in the form of interest or dividend.
The primary function of a financial market is to facilitate the transfer of funds from surplus sectors (lenders) to deficit sectors (borrowers). A financial market consists of investors or buyers, sellers, dealers and brokers and does not refer to a physical location. The participants in the market are linked by formal trading rules and communication networks for originating and trading financial securities.
The three basic functions of financial markets are:
• Price discovery process which results from the interaction of buyers and sellers in the market when they trade assets
• Provision of liquidity by providing a mechanism for an investor to sell financial assets
• Low cost of transactions and information
The types of Markets
Money Markets : Money markets are markets for low-risk, highly-liquid, short-term instrument. Funds are available in this market for periods ranging from a single day up to a year. This market is dominated mostly by government, banks and financial institutions. There are four kinds of money markets namely : Call money market, Commercial Bills market, Acceptance market, Treasury Bills market.

Capital Markets : The capital market is designed to finance the long-term investments. The transactions taking place in this market will be for periods over a year. Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among