Organized Money Market In India

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1. Organized Money Market The market which is regulated by specific laws and administered by specifi c rules and regulations is known as organized money market. The constituents of organized money market are as follows. (i)Reserve Bank of India (RBI) RBI occupies a central position in the monetary and banking structure of the country and acts as the leader of the money market in supervising, controlling and regulating the activities of all commercial banks. It is vested with certain prerogative powers by an act of parliament to regulate the monetary system in the country. The main functions performed by RBI in India are follows: • The central bank has the sole right of issuing currency notes. • It acts as a banker to the commercial banks and…show more content…
• In addition to this, the Bank acts as an agent of the government in respect of India’s membership of the International Monetary Fund. (ii) State Bank of India (SBI) and Its Subsidiaries SBI is the largest commercial bank in India. It is the largest Indian banking and fi nancial services company (by turnover and total assets) with its headquarter in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it as the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. At present the State Bank of India has following eight subsidiaries: 1. State Bank of Bikaner and Jaipur…show more content…
The practice of accepting deposits and lending for a short-term is known as ‘commercial banking’ or ‘deposit banking’. A commercial bank trades directly with the public, and its primary motive is to make profit. When commercial banks undertake project financing, they partake of the character of investment banking and the system may be described as mixed banking. Commercial banks, as the ‘creators’ of bank credit, influence significantly the community’s money

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