It is believed that financial market or financial arena of a country is an integral part of the economy and this holds especially true for India. The current scenario of the economy of India sees a blend of both public and private sectors, wherein the market can be broadly divided into two main components, that is, money market and capital market. Wherein, the capital market is further divided into primary and secondary markets.
The financial market in India can be broadly divided into two main components, that is, the money market and the capital market. Wherein, the capital market is further divided into primary and secondary markets.
The primary market deals with the new securities issues for capital formation.
The primary market deals with the new securities issues for capital formation. It is a place where the government issues debt and equity securities and where they are traded via the stock exchange. It is also a place where the government issues the bonds and where they are traded in the secondary market. The secondary market is where the securities are traded after they have been issued.
The money market:
The money market deals with short-term borrowings and lending. It includes banks, financial institutions, corporate bodies, and the RBI. The money market helps in channelising short-term funds from surplus units to deficit units. It includes activities like issuing short-term loans, treasury bills, commercial papers, interbank dealings, etc.
The secondary market is a place where investors buy and sell securities with the help of intermediaries such as brokers, market makers etc.
The secondary market is a place where investors buy and sell securities with the help of intermediaries such as brokers, market makers etc. This is the place where the price of the security is determined. The price of the security is determined by the demand and supply of the securities. The price of a security is also determined by the interest rate for the market. There are many types of securities in the secondary market. They include bonds, stocks, and commodities.
The capital market:
The capital market channels long-term funds from surplus units to deficit units. It includes banks, financial institutions, non-banking financial companies (NBFCs), mutual funds (MFs), corporate bodies, stock exchanges (e.g., BSE and NSE) and the RBI. The capital market comprises of the following submarkets:
It consists of stock exchanges like the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The financial market in India is made up of stock exchanges like the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). These are the two main stock exchanges in India. The Bombay Stock Exchange was the first stock exchange in India. It was also the first stock exchange in Asia. The Bombay Stock Exchange is also known as BSE. The National Stock Exchange is the largest stock exchange in India. It is also known as NSE.
The Indian financial market is broadly composed of money markets and capital markets
The Indian financial market is broadly composed of money markets and capital markets. Money markets are the markets for short-term lending and borrowing, while capital markets are the markets for long-term lending and borrowing. The financial market in India is regulated by the Reserve Bank of India (RBI). The Reserve Bank is responsible for the macroeconomic management of India and has the power to regulate the financial market. In India, the financial market is not very developed and has a very low level of liquidity.
Primary Market: The primary market refers to a newly created security that is offered in an initial public offering (IPO). In other words, it is a place for issuance of new securities. The primary market is responsible for dealing with new securities; i.e., it enables companies to raise funds by issuing new stocks/securities to
Conclusion
The financial markets in India can be broadly divided into two main components that are the money market and the capital market. The capital market is further divided into primary and secondary markets, while the money market is again divided into various categories such as call markets, commercial bills, certificates of deposit, treasury bills and many more. If you need to enroll our courses by clicking here and you can also check our courses here.
