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What Are the Various Types of Financial Markets in India?


For all the jargon we keep hearing on the equity markets and debt markets in India, did you know how many types of financial markets there are in the country.


In India the Financial markets can be divided into two markets.

 What Are the Various Types of Financial Markets in India?
The capital markets and the debt markets. Apart from this there is also the forex markets. Let's understand what are capital markets and money markets first.

Money Market

Money Market is a market that largely deals in various kind of debt instruments. These debt instruments are largely short term in nature, which could also be for less than a year. This could include dealing in instruments of government dated securities and treasury bills. Apart from this it could also mean dealing in commercial paper more popularly known as CP, bankers acceptance, certificates of deposits, etc.

Capital Markets

The Capital Market also deals in debt, but, more in the long term type. Apart from this the bulwark of the capital market remains the equity segment.

In the capital market the players are both large and small sized individuals. Apart from individuals one would also include financial institutions, foreign institutional investors, non resident Indians etc. The capital market can also be divided into primary market and secondary market. In the primary market one deals with an initial public offering or IPO, which is the first time that a company issues shares.


The secondary market is as the name suggests, stocks are traded after an initial public offering.
The Securities and Exchange Board of India or SEBI regulates the capital markets in India. It ensures that all guidelines are in compliance with the SEBI Laws and Regulations.

The types of instruments traded on the capital markets include shares issued through an IPO, rights shares, cumulative preference shares, government securities, debentures and bonds, commercial paper and treasury bills more popularly known as T-Bills.

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