Answer:
Being the financial advisor of the bank, we may advise the bank to raise funds through 'call money'. Call money is a money market instrument that is used by banks to borrow funds from one another for a period of 1 day to 15 days. It has following features due to which it may be used by HDFC Bank: (i) It is a short term finance repayable on demand. (ii) It is a tool for inter-bank borrowing. (iii) It is often used by banks to meet theik CRR requirement. Values fulfilled by money market instruments are: (i) Mobilisation of surplus funds and channelising them into most productive use. (ii) Ensures smooth functioning of money market.
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