Besic of financial markets

1. FINANCIAL MARKETS
FINANCIAL MARKETS & INDIAN FINANCIAL SYSTEM

2. Meaning
• Financial Market is the same as on other goods market. But in
which market treaded financial instrument, including govt. and
other bonds, equities, & derivatives.
• Financial system may be defined as a set of institutions,
instruments, and market which foster saving and channels them
their most efficient use. The system consists of individual
(source), intermediaries , markets and users of savings.

3. Classification/Types of Financial markets
Financial
markets
Capital
markets
Primary/New issue
market
Secondary
markets
Money
markets
Demand money
markets/ Treasury
bills etc.

4. Money market
• According to RBI :- “Money market is the center of short-term-Monetary
assets, it meets the short-term needs of the
borrowers and provides cash or liquidity to the
leaders”.
Indian Money market divided by two parts – 1. Organized money market
2. Un-Organized money markets
1. Organized :- Banking & Non-Banking institution
2. Un-Organized:- Local lender’s / Money provider’s

5. Capital markets
• Capital market is a financial market its same as money market. But in which
treaded long terms debts and equites and other long term
financial instruments.
For exp:- Stocks, bonds, long term debts etc.
Capital markets divided by two parts :-
1. Primary market/New issue market
2. Secondary market/stock market

6. Types of Secondary market

7. Primary market
• Primary market is the part of the capital market that deals with
issuing of new securities. Companies, governments
Public sector institution can obtain funds through
the sale of new stock or bond issues through
Primary markets.
For exp:- IPO , FPO
Important Activities of P.M

8. Secondary market
• The Secondary market / Stock market is the same as Primary
market. But in which treaded by already
issued and existing securities.
. Stock market provided an organized mechanism for purchase and
sale’s of securities.
( At Present in India 23 stock markets.)

9. Participants in Secondary Markets in India
 Regulatory body :- SEBI
 Investor’s :- Institutional investors , Individual investor
:- Foreign investors.

10. Regulatory bodies in financial markets
Money market ( R.B.I)
• Reserve Bank of India are established
1-4-1935.
• Its owned by Ministry of Finance,
Govt. of India.
• At present :- Bank rate: 6.5%
Repo rate : 6.25%
Reverse repo rate:3.35%
CRR : 6.25%
SLR : 18 %
Capital market (S.E.B.I)
• Securities and Exchange Bord of India
established 12-4-1988.
• Parent department of Finance
ministry ,Government of India.
• Chairperson of SEBI:- Smt. Madhabi
puri Buch.