Online Course for Central Armed Police Forces (CAPF) Exam
Money, Banking & Insurance
Meaning and Organs of Money Market
Money market refers to that mechanism whereby borrowers
manage to obtain short term loanable funds on the one hand and lenders succeed
in getting credit worthy borrowers for their money on the other. In this way any
institution or person who is willing to provide short-period monetary debt
becomes a part of the money market.
Under Indian money market, the Reserve Bank of India occupies
the central position because it regulates and controls the credit supply of the
country. Ordinarily, the Indian money market is divided into two parts
The organised sector.
The unorganised sector.
The organised sector includes the State Bank of India and its
7 associated banks, 19 nationalised banks, Regional Rural Banks, Co-operative
Banks, Non-governmental sectors and other banks, whereas the unorganised sector
includes the moneylenders and indigenous bankers.
Different Stages of the Development
of Indian Banking
In order to make the Reserve Bank of India more powerful, the
Indian Government nationalised it on January 1, 1949. With a view to have the
co-ordinated regulation of Indian banking, the Indian Banking Act was passed in
March 1949. According to this Act, the Reserve Bank of India was granted
extended powers for the inspection of non-scheduled banks. For the development
of the banking facilities in the rural areas the Imperial Bank of India was
partially nationalised on 1 July, 1955 and it was named as the State Bank of
India. Alongwith it other 8 (at present 7) banks were converted as its associate
banks which form what is named as the State Bank Group. They are as follows :
The State Bank of Bikaner and Jaipur (In the beginning
the State Bank of Bikaner and the State Bank of Jaipur were separate. But
they were merged and named as the State Bank of Bikaner and Jaipur)
The State Bank of Hyderabad
The State Bank of Indore
The State Bank of Mysore
The State Bank of Saurashtra
The State Bank of Patiala
The State Bank of Travancore.