Write Short Notes :Call Money

1.	Write Short Notes :Call Money
Answer» Call money: In day to day transactions it is quite likely that each bank faces a shortage of money even for as short as 24 hours or even lesser. In such cases the bank may borrow money from another bank at an interest rate which is determined by the shortage of money or say demand or supply pattern in the market. The borrowing and lending banks do not come is direct contact with each other for this transaction. It is done by an agency appointed by the Central Bank This money is known as ‘Call money’ and its rate of interest is called ‘Call money rate’.

Answer»

Call money:

In day to day transactions it is quite likely that each bank faces a shortage of money even for as short as 24 hours or even lesser.
In such cases the bank may borrow money from another bank at an interest rate which is determined by the shortage of money or say demand or supply pattern in the market.
The borrowing and lending banks do not come is direct contact with each other for this transaction. It is done by an agency appointed by the Central Bank
This money is known as ‘Call money’ and its rate of interest is called ‘Call money rate’.

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