1. Financial Market
a) Money Market
Managed by RBI. Deals with short-term instruments like T. Bills, CDs, and CPs.
b) Capital Market
Managed by SEBI. Deals with long-term financing.
- Primary Market: New Issue Market (e.g., IPOs).
- Secondary Market: Market for old securities (e.g., Stock Exchange).
2. Ordinary Market
• Monopoly: Single producer, price maker.
• Oligopoly: Few sellers, many buyers.
• Monopolistic Competition: Many buyers/sellers, similar but distinct products.
• Perfect Competition: Free entry/exit, fixed prices, no govt interference.
1. T.Bills (Treasury Bills / Zero Coupon Bonds)
- Released by RBI.
- Sold at discount and reclaimed at face value.
- Minimum value: ₹25,000. No maximum limit.
2. CDs (Certificate of Deposit)
- Suggested by Vaghul Committee (1989).
- Minimum value: 1 Lakh (and multiples of 1 Lakh).
- Released by Banks or Financial institutions.
3. CPs (Commercial Papers)
- Suggested by Vaghul Committee (1990).
- Minimum value: 5 Lakh (and multiples of 5 Lakh).
- Released by wealthy companies.
Equity Financing
- • Company offers ownership.
- • Shareholder's profit/loss is proportional to company's.
Debt Financing
- • Company takes a loan.
- • No ownership offered.
- • Lender gets priority during repayment.
Ordinary Market Types
Monopoly
Single producer, Price Maker. e.g. Govt in Defence.
Oligopoly
Few sellers, Interdependence. e.g. Maruti Suzuki, Vi.
Monopolistic Competition
Many sellers, distinct but similar products. e.g. Tea, Soap.
Perfect Competition
Fixed price, no govt interference. e.g. Nike, Adidas.
- Higher official appointed by RBI to solve money-related problems.
- Free of cost service.
- Approach if no reply from bank within 1 month.
- Compensation: Up to ₹20 Lakh (+ ₹1 Lakh for mental harassment).
- Does not deal with matters older than 1 year.
- Appellate Authority: Deputy Governor of RBI.
- Count: 22 Banking Ombudsman & 4 NBFC Ombudsman.
Which institution manages the Money Market in India?
What is the minimum value of a Treasury Bill (T-Bill)?
Commercial Papers (CPs) must be in multiples of which amount?
Which market has no fixed geographical location and deals with new shares?
In which type of ordinary market is a single producer a 'Price Maker'?
What is the maximum compensation provided by the Banking Ombudsman?
Who is the Appellate Authority if a person is not satisfied with the Banking Ombudsman's decision?