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Which one of the following statements is not true about Indian Money Market?

Which one of the following statements is not true about Indian Money Market? Correct Answer Non-Banking Finance Companies (NBFCs) are financial institutions that constitute organised component of money market.

The incorrect statement is option 1

Important Points Statement 1: Non-Banking Finance Companies (NBFCs) are financial institutions that constitute organised component of money market.

This statement is incorrect because :

  • NBFCs are financial institutions that are not organised components of the money market.
  • NBFCs are financial institutions that provide various banking services but do not have a banking license.
  • These institutions are not allowed to accept traditional demand deposits such as checking or savings accounts from the public

Statement 2: Money market mutual funds are allowed to sell units to corporates and individuals.

This statement is true because

  • Money Market Mutual Funds (MMMF) is a short-run liquid investment with high credit rating.
  • Money market mutual funds are allowed to sell units to corporates and individuals.

Statement 3: A Well-developed money market is essential for a modern economy.

This statement is true because

  • A modern economy requires a well-developed money market.
  • Though the money market has historically developed as a result of industrial and commercial success, it also plays an important part in a country's industrialisation and economic development.

Statement 4: In the Indian Money Market, the predominant place is enjoyed by government and semi-government securities.

This statement is true because

  • The India money market is a monetary system that involves the lending and borrowing of short-term funds.
  • India's money market has seen exponential growth just after the globalization initiative in 1992.
  • In the Indian money market, the predominant place is enjoyed by government and semi government securities.

Related Questions

In the Money market which of the following statement's is/are incorrect?
1. The call money market deals in short-term finance repayable on demand, with a maturity period varying from one day to 14 days.
2. Treasury bills are instruments of short-term borrowing by the Government of India, issued as promissory notes under discount.
3. A reduction in the repo rate helps banks to get money at a cheaper rate.
4. Money market mutual funds invest money in specifically, high-quality and very short maturity based money market instruments.
Which of the following are the instruments or money market?
1. Call money market
2. Commercial bill market
3. Industrial securities market
4. Short-term loans market
5. Treasury bill market
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Reasoning (R): A well-organized money market is an essential condition for the successful operation of the Central Banking policies, and for holding the conditions of liquidity within the bounds of what the monetary authorities consider desirable.
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1. Like a commodity market, the relationship between a buyer and a seller in a labour market is temporary.
2. There is a diversity of wage rates in a labour market even for similar nature of work.
3. Monopoly in the labour market is extremely rare.
4. Monopsony referring to the buyer's control is more in the labour market.
Read the passage carefully and choose the best answer to each question out of the four alternatives.
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Read the passage carefully and choose the best answer to each question out of the four alternatives.
Doing an internship at the University of Lille in France, I almost always found myself stuck whenever I had to speak to non-Indians about India or on anything'Indian'. This was more because of the subtle differences in the way the French understood India in comparison to what I thought was 'Indian'. For instance, when I,or any Indian for that matter, say 'Hindi' is an Indian language, what it means is that it is one of the languages widely spoken in India. This need not be similar tothe understanding that the French would have when they hear of 'Hindi' as an Indian language. Because for them Hindi then becomes the only language spoken inIndia. This is a natural inference that the French, Germans, Italians and many other European nationals would tend to make, because that is generally how it is intheir own respective countries. The risk of such inappropriate generalisations made about 'Indian' is not restricted to language alone but also for India's landscape,cuisine, movies, music, climate, economic development and even political ideologies. The magnitude of diversity of one European country can be easily compared tothat of one of the Indian State, isn't it? Can they imagine that India is one country whose diversity can be equated to that of the entire European continent? Theonus is upon us to go ahead and clarify the nuances in 'Indianness' while we converse. But why should one do so? How does it even matter to clarify? The writer was working at a university in which country?