"Dhan Samudra' is a bank, which needs immediate cash. This has been the situation since the RBI chose to increase the CRR ratio. It is looking for other banks to meet its cash requirements by borrowing from other banks in the country without having to keep any collateral. However, it resorts to a very expensive source of fund. This source of fund has an inverse relationship with the other sources of funds like commercial paper and certificate of deposits. Outline the features, importance, participants and working of the financial instrument highlighted above.

"Dhan Samudra' is a bank, which needs immediate cash. This has been the situation since the RBI chose to increase the CRR ratio. It is looking for other banks to meet its cash requirements by borrowing from other banks in the country without having to keep any collateral. However, it resorts to a very expensive source of fund. This source of fund has an inverse relationship with the other sources of funds like commercial paper and certificate of deposits. Outline the features, importance, participants and working of the financial instrument highlighted above.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 4Q

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