India Financial market is one of the oldest in the world and is considered to be the fastest growing and best among the emerging economies. The history of Indian capital markets dates back to 200 years before when India was under the rule of the British Empire. Today, 21 regional securities exchanges in India in addition to the centralized NSE (National Stock Exchange) and OTCEI (Over the Counter Exchange of India).
Recent Developments New Norms for Credit Rating Agencies Markets regulator SEBI on November 13, 2018 issued norms for enhanced disclosures by Credit Rating Agencies (CRAs). New Requirements for CRAs are:
2.25 lakh More Shell Firms to be De-registered
Chit Funds (Amendment) Bill, 2018
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Money Market
The Money Market is a market for lending and borrowing of short-term funds. It deals in funds and financial instruments having a maturity period of one day to one year. It covers money and financial assets that are close substitutes for money. The instruments in the money market are of short term nature and highly liquid.
Organized Money Market Instruments and Features
Unorganized Sector of Indian Money Market
Capital Market
Capital market is the market for medium and long-term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending term funds (medium-term and long-term funds). Capital market includes Development Financial Institutions (DFIs) such as IFCI, SFC, LIC, IDBI, UTI, ICICI, etc. They provide medium-term and long-term funds for business enterprises and public authorities.
Types of Capital Market
The Indian Capital Market is broadly divided into two categories:
1. Gilt- Edged Market: Gilt-edged market is also known as the government securities market. As the securities are risk free, they are known as gilt-edged i.e. the best quality securities. The investors in the gilt-edged market are predominantly institutions. They are required by law to invest a certain portion of their funds in these securities. These institutions include commercial banks, LIC, GIC, and the provident funds.
2. The Industrial Securities Market: It is a market of shares, debentures and bonds which can be bought and sold freely. This market is divided into two categories: Primary Market and Secondary Market.
Stock Exchanges Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts.
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Stock Market
Stock Market is a market where the trading of company stock, both listed securities and unlisted takes place. It is different from stock exchange because it includes all the national stock exchanges of the country. ww