Madhya Pradesh Police Exam Model Paper 2

The correct answer is RBI ( Reserve Bank of India ).

About Money Market : Money market is the term used for the short term funds trade in the market i.e for the year or less than a year i.e 365 days. It can be through banks, government, or any financial institution. In the money market, we can deal with certain different types of instruments such as,

• Treasury Bill : Treasury bill is the type of financial instrument that is issued by the RBI on the behalf of the government in which the government becomes the borrower . It is the type of promissory note which means all the details are mentioned on it like the date of maturity, the principal amount is given, interest to be given by the borrower, etc.
  • It was issued for a period of 91 days, 182 days, and 364 days.
  • The minimum amount issued under the treasury bill is Rs. 25000 and further in the denomination of Rs.25000.
  • It was introduced first in the year 1917.
• Commercial Paper: If there any company issued the promissory note to borrow the money from the market then it is known as commercial paper.
  • The maturity period of commercial paper is between 7-364 days.
  • It is issued by the company on the discount i.e the interest given on them till maturity is deducted at the time of issuing.
  • The minimum amount of commercial paper is Rs. 5 lakhs.
  • The company which has a net worth of Rs. 5 crores can issue the commercial paper.
  • It was introduced first in the year 1990.
• Certificate of Deposit : If any bank or financial institution issues the promissory note to borrow money from the market for a short duration then it is known as a certificate of deposit.
  • The maturity period of the certificate of deposit is 7-364 days .
  • The minimum amount for issuing any certificate of deposit is Rs.1 lakh.
  • It is issued on the discount i.e the interest given on them till maturity is deducted at the time of issuing.

Note:

Promissory note It is the type of financial instrument which is issued by any organization in which the promise is written by one party to pay another party a particular amount of money at a specified period of time.

About RBI -

​RBI was established on April 1, 1935 , under the Reserve Bank of India Act,1934.
Current Governor of RBI is Shri Shaktikanta Das (25th).
Sir Osborne Smith was the first governor of RBI and C.D Deshmukh was the first Indian governor of RBI.
It operates the currency and credit system of the country.
It is called the Bankers Bank of India.
It formulates, implements, and monitors the monetary policy.