Indian History

Call Money Market

The call/notice money market forms an important segment of the Indian Money Market. Call money is short-term finance repayable on demand, with a maturity period of one to fourteen days or overnight to fortnight. It is used for inter-bank transactions. The money that is lent for one day in this market is known as call money and, if it exceeds one day, is referred to as notice money.
Commercial banks have to maintain a minimum cash balance known as the cash reserve ratio. Call money is a method by which banks lend to each other to be able to maintain the cash reserve ratio. The interest rate paid on call money is known as the call rate.
Scheduled commercial banks (excluding RRBs), co-operative banks (other than Land Development Banks) and Primary Dealers (PDs), are permitted to participate in call/notice money market both as borrowers and lenders.
Call Rates(6.8.2016): 5.40%-6.60%