Which one among the following is not an institution of Indian Money

Which one among the following is not an institution of Indian Money Market?

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Reserve Bank of India

Bill Brokers

Merchant Bankers

Non-Banking Financial Intermediaries

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC CAPF – 2011

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The money market deals with short-term funds. The Reserve Bank of India is the central bank and a crucial regulator and participant in the money market. Bill Brokers are specialized intermediaries in the bill market, a segment of the money market. Non-Banking Financial Intermediaries (NBFI), like NBFCs, Mutual Funds, etc., are significant participants in the money market, involved in short-term lending, borrowing, and dealing in money market instruments. Merchant Bankers, while involved in financial services, are primarily associated with the capital market, handling issues of securities (shares, bonds), underwriting, corporate advisory services (M&A), etc., which relate more to long-term finance. While they might interact with money market instruments or raise short-term funds, their core function is rooted in the capital market.

– The Money Market is for short-term funds; the Capital Market is for long-term funds.
– RBI, Bill Brokers, and many NBFIs are direct institutions/participants in the Money Market.
– Merchant Bankers are primarily involved in Capital Market activities like issuing securities and corporate finance.

Institutions can operate in both money and capital markets, but their primary focus often distinguishes them. Merchant bankers’ main business lines typically lie in areas like public issue management, project appraisal, corporate restructuring, and portfolio management, which are characteristic of capital market functions.

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