What Are The Security Features Of Currency?
- 1. Prepared By: Puneet Sharma Vinay Patidar Viyappu Tharun Siddharth Khandelwal Rishu Singh SUBMITTED TO: Dr. M. KAMESHWAR RAO ASSISTANT PROFESSORDEPARTMENT OF MANAGEMENT STUDIES
- Introduction to Capital market/ Financial marketCapital Market is one of the significant aspect of every financial market.Hence it is necessary to study its correct meaning. Broadly, Unlike money market instruments the capital market instruments become mature for theperiod above one year. It is an institutional arrangement to borrow and lend money for a longer period of time. It consists of financial institutions like IDBI, ICICI, UTI, LIC, etc.
- These institutions play the role of lenders in the capital market. Business units and corporate are the borrowers in the capital market. Capital market involves variousinstruments which can be used for financ Capital market provides long term debt and equity finance for the government and the corporate sector.
- Capitalmarket can be classified into primary and secondary markets. The primary market is a market for new shares, where as in the secondary market the existing securities are traded. Capital market institutions provide rupee loans, foreign exchange loans,consultancy services and underwriting.
- Difference between Money Markets and Capital Markets• Money market is a place where banks deal in short term loans in the form of commercial bills and treasury bills. But capital market is a place where brokers deal in long term debt and equity capital in the form of debenture, shares and public deposits.• In money market maturity date of repayment may after one hour to 90 days. But in capital market, loans are given for 5 to 20 years and if issue of shares by co. , its amount will repay at winding of company . But investors have right to sell it to other investors if they need the money.• Rate of interest in money market is controlled by RBI or central bank of any country. But capital market’s interest and dividend rate depends on demand and supply of securities and stock market’s sensex conditions. Stock market regulator is in the hand of SEBI.• Main dealer of money market s are commercial banks like SBI, ICICI Bank, UTI and LIC and other financial institutions. Main dealers are all the public and private ltd. Co. and more than 30 million investors. It is increasing trend due to opening of online capital market.• In USA, money market is famous with dealing of money fund and banker’s acceptance instruments. But capital market in USA is famous with New York stock exchange and stock regulator is Security exchange commission (SEC).
- Significance, Role or Functions of Capital Market• Like the money market capital market is also very important. It plays a significant role in the national economy. A developed, dynamic and vibrant capital market can immensely contribute for speedy economic growth and development.• These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments• Let us get acquainted with the important functions and role of the capital market.
- Mobilization Of Saving• Capital market is an important source for mobilizing idle savings from the economy. It mobilizes funds from people for further investments in the productive channels of an economy. In that sense it activate the ideal monetary resources and puts them in proper investments.
- Capital Formation Capital market helps in capital formation. Capital formation is net addition tothe existing stock of capital in the economy. Through mobilization of idealresources it generates savings; the mobilized savings are made available tovarious segments such as agriculture, industry, etc. This helps in increasingcapital formation
- Provision of Investment Avenue• Capital market raises resources for longer periods of time. Thus it provides an investment avenue for people who wish to invest resources for a long period of time.• It provides suitable interest rate returns also to investors. Instruments such as bonds, equities, units of mutual funds, insurance policies, etc. definitely provides diverse investment avenue for the public.
- Speed up Economic Growth and DevelopmentCapital market enhances production and productivity in the national economy.As it makes funds available for long period of time, the financial requirements of business houses aremet by the capital market.It helps in research and development. This helps in, increasing production and productivity ineconomy by generation of employment and development of infrastructure.