STRUCTURE OF INDIAN FINANCIAL MARKET

Capital market Money market

Equity market

Debt market

Treasury bill

Call money market

Certificate of deposit

Commercial bill

Commercial paper

Cash management

Treasury bill

Call money market

Commercial bill

Commercial paper

Debt market

Certificate of deposit

Cash management

Treasury bill

Call money market

Commercial bill

Commercial paper

Indian financial system

Financial market

Financial institution

Financial instrument

Financial services

Any market place where buyer and seller participate in the trade of financial securities , commodities and other fungible items of value at low transaction cost and at prices that reflect supply and demand.

Securities include stock & bonds, and commodities include precious metals or agricultural goods.

Financial market

Reduces the Cost of Transactions

Provides Liquidity to Financial Assets

Facilitates Price Discovery

Mobilization of Savings and their Channelization into more Productive Uses

Functions

As money became a commodity , the money market became a component of the financial market.

The money market is the market for the financial assets that are close substitutes for money .

it is a market for over night to short term fund and instrument having a maturity period of one or less than one year.

Money market

Financing trade Financing industry Profitable investment Self-sufficiency of commercial Bank

function

INST

RUM

ENT Treasury Bills

Call Money Market

Commercial Bills

Commercial Papers

Certificate Of Deposits

Cash Management Bill

It deals in T-bills of short term duration 14 days, 182 days , 91 days , and 364 days.

They are issued by the government & largely held by RBI

The rate of interest for T-bills is determined by the market depending on demand & supply of fund in the money market

Treasury bills

The call money market is a market for very short –term fund repayable on demand and with a maturity period varying between one day to a fortnight.

The money that is lent for one day in this market is known as call money and if it exceeds one day but less than 15 days it is referred to as notice market.

Call money market

Deals in a bill of exchange, a seller draws a bill of exchange on the buyer to make payment within a certain period of time .

The bill can be domestic bill or foreign bill of exchange.

The commercial bill are purchase & discounted by commercial bank & are rediscounted by FLS Like IDBI,SIDBI ,EXIM bank etc.

Commercial bill

The schemes of cp was introduce in 1990 for short term financing issue . They can be issue in multiple of 5 lakh and in multiple thereof.

As per RBI guideline , cps can be issue on the following condition :

a) the minimum tangible net worth of the company should be at least rs 4 cr

b) The working capital limit should have been sanctioned by a bank or financial institution.

Commercial paper

Cds were introduce in June 1989.

Cds are short term borrowings in the form of a promissory notes having a maturity of not more than 15 days up to a maximum of one year. Cd is subject to payment of stamp duty under Indian stamp act , 1899 (central act).

Certificate of deposit

The capital market is the market for securities, where companies and the government can raise long term funds. The capital market include the stock market and the bond market.

Capital market

Mobilization of saving Capital formation Provision of investment avenue Service provision Speed up economic growth and

development

Role of capital market

Capital market

Equity market

It is a marketplace in which shares are issued and traded, either through exchanges or over the counter markets. It is also known as stock market, it is one of the most vital areas of a market economy.

Equity market

Debt market, also known as bond market. In this market, bonds are issued and traded. Bonds are securities that represent debt owned by the issuer to the investor.

Debt market

Equity market

Primary market

Secondary market

Derivatives market

Primary market Secondary market

1. The place where fresh issue of shares is made is known as primary market

The place where formerly issued securities are traded is known as secondary market

2. Only ones securities can be sold Multiple times securities can be sold

3. Intermediary is underwriters brokers

4. Price is fixed Price is fluctuates, depends on the demand and supply force

5.Securities are buying &selling between company & investors

investors to Investor

Capital market Money market

1. The primary instruments utilized as a part of the

capital market are stocks, debentures, shares, bonds

and securities

The primary credit instruments of the money market are bills of

exchange, call money

2. The capital market compact in borrowing and lending of long term funding which means the time period is more than one

year.

The money market make an agreement for borrowing and

lending of short term funds which shows time period is one year or

less than one year.

3. capital market instruments carry high risk

The instruments traded in money market carry low risk

4. capital market are not that much liquid.

The money market instruments are rich in liquidity.

5. Capital Market Instruments give higher returns

money Market Instruments give low returns

CONCLUSION