Of Bankers'Myopic Vision

After the policy, there were many quotes offered for term money and a handful of deals were struck. Dresdner Bank borrowed three month money from HDFC Bank at 9 per cent. There was a deal struck for six months at 9 per cent. All was well as long as the overnight rates ruled at less than one per cent. But once overnight rates moved up to 10 per cent, all hell broke loose. Almost immediately the quotes dried up.

Money market dealers anyway point out that the activity in the inter bank term market was a media creation. The activity was blown out of proportion for there were only a handful of deals and only for Rs 10 to Rs 15 crore