indian+money+market +main
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INDIAN MONEY
MARKET.
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MEANING OF MONEY
MARKET Money marketrefers to a mechanism
whereby on the one hand borrowers manage
to obtain short term loanable funds and onthe other, lenders succeed in gettingcreditworthy borrowers for their money.
In a normal language, money market is a
market for short term funds meant for use ofa period of 1year.
It basically a source of working capital.
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INDIAN MONEY MARKET IS NOT
AN INTEGRATED UNIT.
C
lassification of Indian money market: Unorganised sector
Organised sector
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UNORGANISED SECTOR OF
THE MONEY MARKET:
Unregulated non bank financial
intermediaries.o Finance companies
o Chit funds
o Nidhis Indigeneous bankers
Money lenders
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ORGANISED SECTOR OF
MONEY MARKET
Sub markets Participating institutions
Instruments
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SUB MARKETSoCall money market.
oTreasury bill market.oThe repo market.
oCommercial and trade bills market.
oCommercial paper market.
oCertificate of deposit market.
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PARTICIPATING
INSTITUTIONSoReserve bank of india
oDiscount and finance house of indiaoBanks
oDevelopment financial institutions
o Investment finance companies
oMutual funds
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INSTRUMENTSoTreasury bill
oRepos
o Inter bank call money
oCommercial and trade bills
oC
ommercial paperoCertificate of deposits
oParticipation certificates
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FEATURES OF THE INDIAN
MONEY MARKET Lack of integration
Lack of rational rate interest structures
Absence of an organised bill market
Shortage of funds in the money market
Seasonal stringency of funds andfluctuations in interest structures
Inadequate banking facilities
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MEASURES TO STRENGTHEN
MONEY MARKETo Remitting the stamp duty.
o Deregulation of money market interest rates.
o Introducing new money market instruments.o Introduction of repos.
o Setting the discount and finance house of
india.o Introducing money market mutual funds.
o Developing call/notice money market.
o Sector specific refinance facilities.
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STRUCTURE OF THE
CAPITAL MARKET
Capital market are broadly
divided into:
1. The financial institutions.
2. The securities market.
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THE FINANCIAL INSTITUTIONS
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THE SECURITIES MARKET
o The securities market is divided into two
categories.
o 1.The gilt edged market ( or the market for
government securities.)
o Features:
o 1. It is a risk free market and returns are
gauranteed.o 2.RBI plays a dominant role in government
securities market.
o 3.These are the most liquid debt instruments.
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THE SECURITIES MARKET
o Corporate securities market
o It is a market where securities issued by
firms i. e. shares bonds, debentures etc.These can be bought and sold freely.
o It consists of
o
the new issue market( primary market).o The stock exchange ( secondary market).
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ROLE OF CAPITAL MARKET IN
INDIAS INDUSTRIAL GROWTH
o For financing five year plans.
o Mobilisation of savings and acceleration ofcapital market.
o Promotion of industrial growth.
o Raising long term capital.
o Ready and continous market.
o Proper channelisation of funds.
o Provision of a variety of services.
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FACTORS CONTRIBUTING TO THE
GROWTH OF CAPITAL MARKET IN
INDIA
o Establishment of development banksand industrial financing institutions.
o Growth of underwriting business.
o Setting up ofSEBI.
o
Increasing awareness of investmentopportunities.
o Credit rating agencies.
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PRESENTED BY:
oAnubha jain (1627)
oArchana jaiswal (1626)oDeepika rohra (1645)
oMohit gupta (1668)oTanvi jain (1731)
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