Which of the following is NOT the participant in the Money Market?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Individual Investors
Option (1) Reserve Bank of India — A participant in the money market (Incorrect). It issues treasury bills for the government and controls the supply of short-term money.
Option (2) Commercial Banks — A participant in the money market (Incorrect). Banks lend and borrow among themselves every day through call money, to meet their short-term needs.
Option (3) Individual Investors — Not a participant in the money market (Correct). The money market deals in short-term funds, for up to one year, in very large amounts. So its major participants are the RBI, commercial banks, non-banking finance companies, state governments, large corporate houses and mutual funds. Individual investors are not among them. They invest through the capital market, in shares and debentures.
Option (4) Non-Banking Financial Companies — A participant in the money market (Incorrect). They raise and deploy short-term funds, for example through commercial paper.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.
NCERT (Pre-rationalised Edition):
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