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A Study on Indian Money Market, Capital Market and Banking Legislations

Dr.S. Kanthimathinathan


Abstract:

Money market consists of financial institutions and dealers in money or credit who wish to generate liquidity. It is better known as a place where large institutions and government manage their short term cash needs. For generation of liquidity, short term borrowing and lending is done by these financial institutions and dealers. Money Market is part of financial market where instruments with high liquidity and very short term maturities are traded. Due to highly liquid nature of securities and their short term maturities, money market is treated as a safe place. Hence, money market is a market where short term obligations such as treasury bills, commercial papers and bankers acceptances are bought and sold. The money market is a key component of the financial system as it is the fulcrum of monetary operations conducted by the central bank in its pursuit of monetary policy objectives. It is a market for short-term funds with maturity ranging from overnight to one year and includes financial instruments that are deemed to be close substitutes of money. The capital market and in particular the stock exchange is referred to as the barometer of the company?s Government policy is so moulded that creation of wealth through products and services is facilitated and surpluses and profits are channelized into productive uses through capital market operations. The banks and financial institutions are playing a vital role for purchase and sale of securities for capital market.

Keywords: ---

Volume: 3 | Issue: Special Issue

Pages: 21-25

Issue Date: May , 2017

DOI: 10.9756/IJRAS.8152

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