Structure of the Indian Money Market
The Indian Money Market can be categorised into two sectors; viz., Organised or Modern Sector, and Unorganised or Indigenous Sector.
The banks included in the organised or modern sector of the Indian Money Market are SBI, RBI, Private Scheduled Commercial Banks, Non-scheduled Commercial Banks, Nationalised Banks, Foreign Exchange Banks, and Cooperative Banks. However, the participants included in the unorganised or indigenous sector of the Indian Money Market are Sarrafs, Mahajans, Sahukars, Chettiars, and Seths. These participants carry on the moneylending business in the rural and semi-urban areas of India. The organised and the unorganised sectors of the Indian Money Market have little contact between them.
The Reserve Bank of India has more or less complete control over the modern sector of the Indian Money Market. However, despite the fact that a major portion of the trade credit and industry credit is provided by the unorganised sector, RBI does not have control over it.