Sunday, August 15, 2010

What is call money market?

Mr.Popat Lal is a friend of my father and stays near our residence.One day  few guest arrived at  Popat Lal's home but unfortunately Popat Lal did not had sufficient money to meet for dinner requirements. He went to our house and asked for some monetary help from my father and promised to repay the taken amount along with interest after few days.

Portraying this picture into our finance terms we can say that Mr Popat Lal is a bank (like SBI, HDFC etc) and my father is another bank (like PNB, UCO, UNION BANK etc)

CALL RATE
The rate of interest by which one bank takes the money from another bank

MORAL OF THE STORY
 It is an inter-bank lending system for few days 

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