Call Money Market in India

Also known as Cash Reserve Ratio, it is the percentage of deposits which commercial banks are required to keep as cash according to the directions of the central bank. (Times) . When a bank is left with excess reserves they can do a federal refund and lend money to other banks that might be running low on reserves. The reserve ratio is applied when the bank is low on the amount of reserves it has, at this time the bank is than forced to reduce checkable deposits while reducing its money supply. In some cases is also may need to increase its reserves. The bank can increase its reserves by selling bonds, which would also lower the money supply in the

For centuries, banks have relied on fractional reserve banking. This is the method in which only a fraction of a bank’s deposits are actually backed by a reserve of cash-on-hand, available for immediate withdrawal. This procedure allows the bank more capital to lend and at the same time, grows the economy. The reserve amounts are determined by a ratio stipulated by the Federal Reserve. In theory, fractional reserve banking works most of the time. However, in difficult economic times, people have demanded to withdraw

List and describe the three career opportunities in the field of finance. Finance has three main career paths: financial management, financial markets and institutions, and investments. Financial management involves managing the finances of a business. Financial managers—people who manage a business firm's finances—perform a number of tasks. They analyze and forecast a firm's finances; assess risk, evaluate investment opportunities, decide when and where to find money sources and how much money to raise, and decide how much money to return to the firm's investors. Bankers, stockbrokers, and others who work in financial markets and institutions focus on the flow of money through financial institutions and the markets in which financial assets are exchanged. They track the impact of interest rates on the flow of that money. People who work in the field of investments locate, select, and manage income-producing assets. For instance, security analysts and mutual fund managers both operate in the investment field.

The U.S. banking system creates money by allocating the excess reserves from a deposit at creating a loan from the Home Bank. In other words, say I deposit a $100.00 in Bank #1, where Bank #1 is able to lend out some of my money to another customer. So, Bank #1by law needs to hold 10% of what I deposited which is known as required reserves. Therefore, the required reserves of my $100 is $10. So, Bank#1 is able to provide a $90 loan to another customer, which we will name Moe, from my $100. Then, Moe will turn around and spend that money which will eventually make its way to another bank, which we will call Bank #2. So, Bank #2 will be able to loan out $81 of Moe’s $90 yet, Bank #2 is still required to keep 10% which is required reserves, which is $9 of the $90.

Banks are institutions in which people put their money for safekeeping, to save, to use to pay their bills, or to earn interest on. Banks are allowed to use that money to make loans and earn interest for the bank's’ owners. Different types of banks offer different types of services. For example, commercial banks originally just served businesses, and savings banks and credit unions were used by individuals, especially those who couldn’t qualify for loans at regular banks. This is no longer the case. Although commercial banks and thrift institutions used to serve different purposes, today they all offer many of the same types of services including bank accounts, loans, credit, certificates of deposits (CDs), and much more.

deposit to satisfy the Minimum Balance Requirement. Once the savings is opened and funded, the

Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money.

To reduce money supply for fighting inflation the Central Bank can also raise cash reserve ratio of the banks. The higher cash reserve ratio implies that the banks have to keep more cash reserve with the Central Bank. As a result, the cash reserves with the banks fall which force them to contract credit. With this money supply in the economy

For centuries, banks have relied on fractional reserve banking. This is the method in which only a fraction of a bank’s deposits are actually backed by a reserve of cash-on-hand, available for immediate withdrawal. This procedure allows the bank more capital to lend and at the same time, grows the economy. The reserve amounts are determined by a ratio stipulated by the Federal Reserve. In theory, fractional reserve banking works most of the time. However, in difficult economic times, people have demanded to withdraw their money

6. For investors, the function of secondary markets is to provide marketability for the shares of securities they own at a fair price.

The overall development of an economy is a major factor that has significant impacts on the development of the economy's financial markets. Since well-functioning financial systems offer good and easily accessible information, they lower the costs of transaction. This in turn enhances resource allocation and strengthens economic growth. The financial services industry consists of various systems such as stock markets and banking systems that enhance growth and help in poverty reduction. However, commercial banks tend to dominate the financial system during low levels of economic development while stock markets become more active and effective during periods of high levels of economic development ("Financial Sector", n.d.). The other important systems in the financial services industry include sound macroeconomic policies, shareholder protection, and good legal systems.

“Appropriate reserves to address emergencies” Sometimes a business needs to take a break with its purchasing by keeping some money back at the end of every month for reserves, just encase of an emergency. The business has an advantage in doing so because if unexpected turn of events turns up such as unexpected expense or there is a downturn in their market due to world event or even natural disasters, they could have enough funds to continue in business.

Banks take deposits from savers and pay interest on these accounts. They receive interest on loans when they pass these funds on to borrowers. The spread between the rate they pay for funds and the rate they receive from borrowers is where their profits are derived from. This practice of combining deposits from many sources which can be lent to many borrowers forms a interchange of funds

Finance is the study of applying specific value to things we own, services we use and decisions we make. Financial management is the process for and the analysis of making financial decisions in the business context. The major subareas of finance are investments, financial management, financial institutions, market, and international finance. Risk is a potential future negative impact to value and or cash flow. It is often discussed in terms of probability of loss and the expected magnitude of the loss.

thus minimizing the amount of currency that the Company has on hand at any point in time during the week. Additionally, the use of the bank on the daily basis facilitates the control of cash because it creates a double record of all bank transactions - one by the Company and one by the bank. Also we recommend that all receipts be deposited in the