Inter
bank market for deposits of maturity beyond 14 days
and upto three months is referred to as the term money
market. The specified entities are not allowed to
lend beyond 14 days. The development of the term money
market is inevitable due to the following reasons
Declining spread in lending operations
Volatility in the call money market
Growing desire for fixed interest rates borrowing
by corporate
Move towards fuller integration between forex and
money market
Stringent guidelines by regulators/management of the
institutions
