indian+money+market +main

8/6/2019 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)

indian+money+market +main

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