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Barter Money Lender Indigenous banks Chit funds .

Co operative Movement Co operative Society Co operative Bank Joint Stock Bank Commercial Banks .

Investment Banks Insurance companies STOCK EXCHANGES OF INDIA NSE BSE .

MAJOR STOCK EXCHANGES IN THE WORLD ORLD NYSE LSE NASDAQ SSE TSE HKSE .

Specialized Institutions Market operations Merchant Banking .

Evolution of Financial System Barter Money lender Nidhi’s/ Chit funds Indigenous Banking Societies Co operative Movement Banks Joint Stock Banks Commercial Banks Nationalization Investment Banks Development of Financial Institutions Insurance Companies Stock Exchanges Market Operations Specialized Financial Institutions Merchant Banking Universal banking .

Structure of A Financial System Organized Non Organized PFRDA Regulators Money Lenders IRDA RBI SEBI Local Bankers Financial Instruments Money Market Instrument Traders Capital Market Instrument Landlords Financial Markets Pawn Brokers Forex Market Capital Market Financial Intermediaries M0ney market Credit Market Chit funds .

Price determination 6. Information b. Financial Function 1. Intermediary Functions 1. Transfer of resources 2. Productive usage 4.Financial market Role of Financial Market  Savings Mobilization  National Growth  Entrepreneurship Growth  Industrial Growth Functions a. Sale mechanism 7. Capital formation 5. 2. Providing the borrowers with funds. . Enhancing income 3. Providing the lenders with earning assets. 3. Providing the liquidity in the market.

Objectives Characteristics  Short term fund  No fixed place  Brokers  Close substitute for money  Period of one year  Sub markets . The instruments dealt within the money market are liquid and can be turned over quickly at low transaction cost and without loss.A Financial markets can be distinguished along the two major dimensions 1 Primary and secondary 2. Money and Capital market  Money Market A market where Short term funds are borrowed and lent is called money market. which are near substitutes for money. Money Market is a market for Short term financial assets.

Importance  Source of Capital  Ideal investment  Effective Monetary Management  Economic development  Efficient banking System  Facilitating Trade  Helpful to the Government Segments or Sub Markets  Call money Market  Collateral Loan Market  Bill Market  Acceptance market  Discount Market Financial Institutions  Commercial banks  NBFC’s  Acceptance Houses  Central bank .

Characteristics or Requirements for a Developed Money Market               Developed Banking and Financial System Powerful Central bank Integrated interest Structure Specialized Sub Markets Efficient Co ordination High sensitivity Large Number of Instruments and Dealers Cheap Remittance Facilities Adequacy of Funds Highly organized Banking System A large volume of international trade Rapid and Massive industrial development Political Stability Freedom of Investment .

The important money market instruments are 1. Commercial Papers . Repurchase Agreement 6. Banker's Acceptance 5. Treasury Bills 3. Call/Notice Money 2. Certificate of Deposit 7. Treasury Bonds 4.

Global Money Markets  London Money Market Genesis Banking system Accepting Houses Structure Discount Houses Bill Brokers  New York Money Market Wall street Federal Reserve System Interconnected Markets Government Securities Local Market Commercial Banks Open Market .

Role played by RBI RBI .

5. . 6. Explain the role of RBI in the developing the money market. What are its features? 4. Mention and explain the overview of financial market with structured diagram. Write a note on Money market instruments.Questions 1. State the general functions of Money market. 2. State the financial institutions that operate in a money market. Define the term money market. 3.

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 Capital Market The capital market is designed to finance the longterm investments. The transactions taking place in this market will be for periods over a year. HARSHAD SCAM Characteristics  Securities Market  Security prices  Participants  Location Functions  Allocation  Liquidity  Indicative Function  Savings and Investment  Transfer  Merger .

Indian Capital Market Market Primary Secondary Equity shares Instruments Equity Preference shares Intermediaries Debt ADR/GDR Deep Debentures Discount Zero bonds coupon bonds Regulator •Stock Exchanges •Banks •Investment Trusts and Companies •Specialized Financial Institutions •Mutual funds •NBFCs •International Finance investors and institutions SEBI .

Evolution and Growth  Infrastructure Stage  New Issues Stage  The SEBI Stage  New Financial Services  Committees/ Working Groups  Structural Formation Constituents of Indian Capital Market 1.Indian Capital Market. Gilt edged Market 2. Industrial Securities Market .

Factoring Institutions 4. Credit Rating institutions 5. NCDS 8. Mutual Funds 3. National Securities Depositories Limited 9.Financial Institutions 1. Venture Fund 2. OTCEI 6. SHCIL . NSEI 7.

10. 5. 11. 8. 6. Commercial Paper Certificate of deposit Secured Premium Notes Non Convertible Debenture (NCD) Zero coupon Bonds Zero Interest Fully convertible Debentures Deep Discounts Stock invest Equity shares with detachable warrants Equi pref Shares Preference shares with warrants attached Euro issues Non Voting right shares Other innovative instruments . 4. 2. 12. 14. 13. 3.Financial Instruments of the Capital market 1. 7. 9.

Investment opportunities . Generation of Foreign Capital 7. Development of Backward areas 4. Developing the role of Financial institutions 8. Capital Formation 2. Economic Growth 3. Long term Capital to Industrial Sector 6.Role of Capital Market In India 1. Generates employment 5.

Role played by SEBI SEBI .

Advantages of Financial Markets .

. 2. 3.Questions 1. What role does capital market play in the development of Indian economy? Mention and explain briefly the financial instruments of financial markets. Explain the role of SEBI in the developing the Capital market.