ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Price-Cost Chase

The State Bank will, therefore, cease to be a steadying influence in the money market. The State Bank's Chairman is reported to have expressed the view that the Bank will get about Rs 20 to Rs 30 crores from the call market. This seems to be unduly optimistic considering that the total amount of funds in the market is variously estimated at between Rs 40 crores and Rs 70 crores. This suggests that perhaps a further enlargement of the money market is envisaged to include a host of financial and non-financial institutions, The Bill Market Scheme has been put into operation and new financial institutions may come to be established for doing acceptance and discounting business. The discrepancy between the amounts of fresh bills and maturing bills in the portfolios of such institutions and scheduled banks might significantly increase the supply of and demand for call money.

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