CAPITAL MARKET

Introduction to Capital Market

Financial market is a major component of the financial system of a country.
It is a place where people and organisations wanting to borrow money are brought together with those having surplus funds. The financial markets may be classified into organised markets and unorganised markets. The organised markets are strictly supervised and controlled by regulators like SEBI, RBI, etc. The organised markets are further classified as capital market and money market.

What is Capital Market?

Capital market refers to the institutional arrangements for facilitating
borrowing and lending of long term funds. Capital market consists of Government
Securities Market, Industrial Securities Market and the Long Term Loans Market.
The savings of the individuals or institutions are transferred to the needy business people or organisations or entrepreneurs. This takes place through the capital market. Capital market serves both the private sector and the public sector of the economy. A vibrant capital market is a must for quick industrial development.
Capital market is a market for financial assets which have a long or indefinite maturity. Usually, it deals with long term securities which have a maturity period of above one year. Capital market may be further divided into three, i.e., (1) Industrial securities market. (2) Government securities market. (3) Long term loans market.