A study about Financial Markets in India

Abstract

An understanding of the organisational structure of markets for financial assets is vital for knowing the limitations and prospects in relation to efficiency, integration and stability. Financial markets in India comprise in the main, the credit market, the money market, the foreign exchange market, the debt market and the capital market . Recently, the derivatives market - OTC and exchange traded - has also emerged. With banks having already been allowed to undertake insurance business, bancassurance market is also likely to emerge in a big way. Most of the financial markets were characterised till the early ’nineties by controls over the pricing of financial assets, restrictions on flows or transactions, barriers to entry, low liquidity and high transaction costs. These characteristics came in the way of developments of the markets and allocative efficiency of resources channelled through them.