A

Summer Project Report

on
“To study the Government securities and Call
Money Market”

In the partial fulfillment of the Degree of

Master of Management Studies under the University of Mumbai

By
Mr. Chheda Ishwar Jivraj
Roll No: 19
Specialization: Finance
SYMMS
Under the Guidance of
Mr. Raja S. Nalawade
Manager, Funds Management
The Mumbai District Central Co-operative Bank Ltd.

SHAH AND ANCHOR KUTCHHI ENGINEERING COLLEGE

Department of Management Studies,
Chembur, Mumbai-88.

2010-11
 ACKNOWLEDGEMENT

This clause is for them without whom this project was not possible. I will like to thank
“Mumbai District Central Co-op. Bank Ltd.” for providing me such a learning
project. Then I will like to thank Mr. Raja S. Nalawade (Manager, Funds Department)
for helping me in all the possible ways to give me valuable knowledge of Government
Securities and Call Money Market. And finally I will like to thank Mr. Jain (GM,
Mumbai Bank) for encouraging me to grasp knowledge as much as possible, and helping
to complete my summer training.
EXECUTIVE SUMMARY

Debt markets are pre-dominantly wholesale

markets, with dominant institutional investor
participation. The investors in the debt markets
concentrate in banks, financial institutions,
mutual funds, provident funds, insurance
companies and corporate. Many of these
participants are also issuers of debt instruments.
The smaller number of large players has resulted
in the debt markets being fairly concentrated, and
evolving into a wholesale negotiated dealings
market. Most debt issues are privately placed or
auctioned to the participants. Secondary market
dealings are mostly done on telephone, through
negotiations. In some segments such as the
government securities market, market makers in
the form of primary dealers have emerged, who
enable a broader holding of treasury securities.
Debt funds of the mutual fund industry,
comprising of liquid funds, bond funds and gilt
funds, represent a recent mode of intermediation
of retail investments into the debt markets, apart
from banks, insurance, provident funds and
financial institutions, who have traditionally been
major intermediaries of retail funds into debt
market products.

The government securities market, one of the

most important components of the financial sector
 in a modern economy performs many important
roles. From the viewpoint of the government, it is
an important source of funds and from the
viewpoint of investor it is an investment that is
free from default risk. In so far as the domestic
financial markets are concerned invariability the
G-sec market is the most liquid segment of the
market.

Also the major transactions in the banking sector

are also of call money transactions in order to
maintain the necessary CRR. They lend or borrow
money from market. The introduction of CBLO
has definitely hastened these procedures.

This report deals mainly with the procedure of the

transactions of government securities and
different parameters involved in this process.

CONTENTS

Acknowledgement I
Summary II

1. Introduction 01

2. About the Bank 02

3. CRR 05

4. Computation of Demand & Time Liabilities for CRR 08

5. SLR 14

6. Call Money Markets 19

7. CBLO Borrowings 23

8. Glossary in CBLO 30

9. Central Government Securities: Bonds 33

10. References 41