Q.Who are the main participants in the money market? Explain briefly.

The major player in the money market is the Reserve Bank of India, so the correct answer is option (d).

Explanation:

• The Reserve Bank of India (RBI) is the central bank of India and the major player in the money market. It regulates the money supply, controls short-term interest rates and liquidity, and acts as the leader and controller of all money-market activity.
• (c) Central Bank is only a general term; in the Indian context the specific central bank is the RBI, so the precise answer is the RBI.
• (a) State Bank of India and (b) Commercial Bank are participants in the money market but are not the major/leading player.

This is from the Money Market chapter of the TN HSC Class-12 Commerce syllabus.

The correct answer is (d) Reserve Bank of India, because as the central bank it is the leading and controlling participant in the money market.

The money market is the market for short-term funds where instruments maturing within one year are traded. As explained in the TN HSC Commerce Money Market chapter, several institutions participate, but the most important is the central bank.

• The Reserve Bank of India (RBI) is the apex/central bank of India. It controls the money supply, regulates interest rates and is therefore the major player in the money market.

• Commercial banks and the State Bank of India are also participants, but they operate within the framework set by the RBI.