Question

I n the Indian money market, ___ ( i ) is an instrument that provides short-term liquidity to the banking system, whereas _ ( ii) are unsecured, short-term promissory notes issued by large corporations. The ___ ( iii) is an overnight borrowing and lending instrument used between banks and RBI to manage liquidity. Choose the correct set of words for ( i ), (ii), and (iii) from the options below:

Q: Answer-I n the Indian money market, _____ ( i ) is an instrument that provides short-term liquidity to the...

Explanation Call Money i Banks borrow and lend funds for a very short period, typically one day, to manage liquidity. Commercial Papers ii These are unsecured short-term promissory notes issued by corporations to raise funds. Repo Rate iii This is the rate at which RBI lends money to commercial banks for very short durations.