saminar on financial market money market by sanjay sindagi
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Saminar on Financial Market Money Market By Sanjay SindagiTRANSCRIPT
Wel Come To All
Chapter - 2
FINANCIAL MARKETS-
Money Market
Seminar On :
What Is Financial Market?“ A Financial Market is an Financial Institution or
arrangement that facilitates the Exchange of financial instruments like Shares, Debentures, Commercial Papers, Bills and Treasury bills etc ” In other words,
“ A Financial Market is arrangement for facilitating buying and selling of financial assets or securities or financial claims”
Definitions of Financial Market According to Brigham Eugene F.
“ The Place where people and organizations wanting to borrow money are brought together with those having surplus funds is called a Financial market.“
According to investopedia.com “Broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives.”
The main aim of Financial Market is -
Link between the “Savers” and “Investors”
It Facilitates expansion of Trade and Industries over “Space“ and “Time”.
Functions of Financial market Agency Functions
Productive Use
Capital Formation
Transfer of Funds
Financial Functions Providing the Funds
Providing the Earning Assets
Providing Liquidity
Components Of Financial Market
o Primary Market
o Secondary Market
o Money Market
o Capital Market
o Debt Market
o Equity Market
o Financial Service Market
o Depository
o Non – Depository
Money Market
What is Money Market ?Money Market
Meaning of Money Market
Money Market is a market where short
term Financial Instruments, assets and claims
are traded. It is concerned with the supply and
demand for investible funds.
In other words, Money Market refers It is
market where short term fund and near money
assets are borrowed.
Money Market
Definitions of Money Market
Money Market
According to Crowther :
“It is the collective name given to the various firms and institutions that deal in the various grades of near money”
According to RBI Report :
Money Market is the centre for dealings mainly of short – term character, in money assets, It meets short term requirements of borrowers and provide liquidity or cash to the lenders.
Characteristics of Money Market
Short term Finance :
Dealings :
Existence Of Sub-Markets :
Less Risk :
Period :
Money Market
Characteristics of Money Market
Short term Finance :
Dealings :
Existence Of Sub-Markets :
Less Risk :
Period :
Money Market
Characteristics of Money Market
Short term Finance :
Dealings :
Existence Of Sub-Markets :
Less Risk :
Period :
Money Market
Characteristics of Money Market
Short term Finance :
Dealings :
Existence Of Sub-Markets :
Less Risk :
Period :
Money Market
Characteristics of Money Market
Short term Finance :
Dealings :
Existence Of Sub-Markets :
Less Risk :
Period :
Money Market
Functions of Money Market
It provides Finance to Trade and Finance :
It provides opportunity for ideal
Investment :
It effective Monitory Management :
It helps for Economic Development :
It helps for development of efficient
Banking System :
Money Market
Functions of Money Market
It provides Finance to Trade and Finance :
It provides opportunity for ideal
Investment :
It effective Monitory Management :
It helps for Economic Development :
It helps for development of efficient
Banking System :
Money Market
Functions of Money Market
It provides Finance to Trade and Finance :
It provides opportunity for ideal
Investment :
It effective Monitory Management :
It helps for Economic Development :
It helps for development of efficient
Banking System :
Money Market
Functions of Money Market
It provides Finance to Trade and Finance :
It provides opportunity for ideal
Investment :
It effective Monitory Management :
It helps for Economic Development :
It helps for development of efficient
Banking System :
Money Market
Functions of Money Market
It provides Finance to Trade and Finance :
It provides opportunity for ideal
Investment :
It effective Monitory Management :
It helps for Economic Development :
It helps for development of efficient
Banking System :
Money Market
Instruments of Money Market
Inst
rum
ents
Call Money
Notice Money or Short Term Money
Treasury Bills
Commercial Bills
Commercial Papers
Certificates of Deposits
Discount House
Acceptance House
Bill Brokers
Inter Bank Participation Certificate
Inter Corporate Deposits
1. Call Money, Notice Money or Short term Money
Inst
rum
ents
Advances made by banks to other financial institutions, or corporate and personal customers, that are repayable either upon demand (call) or within 14 days (short notice)
The call money deals in short term finance repayable on demand, with a maturity period varying from one day to 14 days.
2. Treasury Bills In
stru
ments
Treasury bills are instrument of short-term borrowing by the Central bank of the nation , issued as promissory notes under discount
3. Commercial Bills In
stru
ments
A commercial bill also called a bank bill or bill of exchange is a payment order directing your bank to pay a sum of money to the holder of the bill at a future time.
4. Commercial PapersIn
stru
ments
Commercial paper is an unsecured promissory note with a fixed maturity of no more than 270 days. Commercial paper is a money-market security issued (sold) by large corporations to get money to meet short term debt
5. Certificate Of Deposits In
stru
ments
A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. The term of a CD generally ranges from one month to five years.
6. Discount House In
stru
ments
A discount house is a money dealer that participates in the buying and discounting of bills of exchange and other financial products such as money markets, certain government bonds and banker's acceptances.
7. Acceptance House In
stru
ments
An acceptance house guarantees the payment of bills used to finance trade deals and goods in shipment. Its profit is the difference between the discounted amount it guarantees to pay and the full amount of the bill that it undertakes to collect from the original creditor.
8. Inter Corporate Deposits
Inst
rum
ents
An Inter-Corporate Deposit (ICD) is an unsecured loan extended by one corporate to another. Existing mainly as a refuge for low rated corporate, this market allows funds surplus corporate to lend to other corporate.
9.Repurchase Agreement
Repo is a form of overnight borrowing and is used by those who deal in Government.
Inst
rum
ents
10.Interbank participation Certificate
Inst
rum
ents
Participation Certificates, as a money market instrument were initially intended to serve as a short-term money market instrument. Participation certificates were utilized by the financial institutions for ‘parking’ their funds for increasingly long maturities and hence this instrument was not development for evening out liquidity between banks and/or financial institutions.
Pla
yers
In M
oney
Mark
et
1. Banks Pla
yers
In M
oney
Mark
et
Unorganized SectorsPla
yers
In M
oney
Mark
et
1. Indigenous Banker
II. Money lenders
III.Nidhi’s IV. Chit Funds
Findings And Suggestions
?
Conclusion :
Financial market helps mainly in finance need, where finance is
treated as life blood of every business.
Financial market act a very important role in Economic
Development also. So, It has a very wide scope in the world.
Thank You
Sanjay Tinga Rizwan
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Prepared By : Sanjay Sindagi