Following are the reforms introduced in the Money Market:
- Introduction of New Money Market Instruments : In order to widen and diversify the Indian money market, RBI has introduced many new money market instruments such as 182 Days treasury bills, 364 day treasury bills, CDs and CPs. Through these instruments, the government, commercial banks, financial institutions and corporates can raise funds through the money market.
- Liquidity Adjustment Facility (LAF) : RBI has introduced LAF for adjusting liquidity through repos and reverse repos to stabilise the short-term interest rates or call rates.
- Deregulation of Interest Rates : Ceiling on interest rates on the call money and inter bank short term deposits was removed and the rates were permitted to be determined by the market forces.
- National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) were introduced as an improved payment infrastructure.
- Electronic dealing system was introduced.
