11.4           ndian     onom
        (iii) Money Lenders: They constitute the                            in 1986. They are used by the Central
                 most localised form of money market in                     Government to fulfil its short-term
                 India and operate in the most exploitative                 liquidity requirement upto the period of
                 way. They have their two forms:                            364 days. There developed five types of
                 (a) The professional money lenders who                     the TBs in due course of time:
                      lend their own money as a profession                  (a) 14-day (Intermediate TBs)
                      to earn income through interest.                     (b) 14-day (Auctionable TBs)
                (b) The non-professional money lenders                      (c) 91-day TBs
                      who might be businessmen and lend                    (d) 182-day TBs
                      their money to earn interest income                   (e) 364-day TBs
                      as a subsidiary business.
                                                                            Out of the above five variants of the TBs,
            Today, India has eight organised instruments                    at present only the 91-day TBs, 182-day
     of the money market which are used by                                  TBs and the 364-day TBs are issued by
     the prescribed firms in the country, but the                           the government. The other two variants
     unorganised money market also operates side by                         were discontinued in 2001.10
     side—there are certain reasons9 behind this:
                                                                                      The TBs other than providing
            (i) Indian money market is still under-                         short-term cushion to the government,
                 developed.                                                 also function as short-term investment
          (ii) Lack of penetration and presence of the                      avenues for the banks and financial
                 instruments of the organised money                         institutions, besides functioning as
                 market.                                                    requirements of the CRR and SLR of the
        (iii) There are many needful customers in the                       banking institutions.
                 money market who are currently outside              (ii) Certificate of Deposit (CD): Organised
                 the purview of the organised money                         in 1989, the CD is used by banks and
                 market.                                                    issued to the depositors for a specified
         (iv) Entry to the organised money market for                       period ranging less than one year—they
                 its customers is still restrictive in nature—              are negotiable and tradable in the money
                 not allowing small businessmen.                            market. Since 1993 the RBI allowed the
                                                                            financial institutions to operate in it—
     2. orgAniseD money mArket                                              IFCI, IDBI, IRBI (IIBI since 1997) and
                                                                            the Exim Bank—they can issue CDs for
     Since the government started developing the
                                                                            the maturity periods above one year and
     organised money market in India (mid-1980s), we
                                                                            upto three years.
     have seen the arrival of a total of eight instruments
     designed to be used by different categories of                 (iii) Commercial Paper (CP): Organised in
     business and industrial firms. A brief description                     1990 it is used by the corporate houses in
     of these instruments follows:                                          India (which should be a listed company
                                                                            with a working capital of not less than Rs.
            (i) Treasury Bills (TBs): This instrument
                                                                            5 crore). The CP issuing companies need
                 of the money market though present
                 since Independence got organised only             10.   Ministry of Finance, Economic Survey 2001–02
                                                                         (New Delhi: Government of India, 2002); Ministry
          .     ased on the suggestions of experts elonging to the       of Finance, Economic Survey 2009–10 (New Delhi:
               ndian financial mar et.                                   Government of India, 2010).