{"id":2571,"date":"2021-07-13T19:05:27","date_gmt":"2021-07-13T13:35:27","guid":{"rendered":"https:\/\/www.goseeko.com\/blog\/?p=2571"},"modified":"2026-01-04T13:50:48","modified_gmt":"2026-01-04T08:20:48","slug":"constituents-of-financial-service-market","status":"publish","type":"post","link":"https:\/\/www.goseeko.com\/blog\/constituents-of-financial-service-market\/","title":{"rendered":"What are the constituents of financial service market?"},"content":{"rendered":"\n

Constituents of financial service market mainly consist of money market and capital market. Thus, it provides the free flow of capital<\/a> and liquidity<\/a> in the marketplace. Accordingly, such constituents of financial service market are classified on the basis of nature of transactions-<\/p>\n\n\n\n

a) Money market<\/h2>\n\n\n\n

It refers to the short term financial market that facilitates trading of near money assets for short period. Further, the classification of this market-<\/p>\n\n\n\n

i) Organisational structure<\/strong>– <\/p>\n\n\n\n

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  1. Bill market:<\/strong> Firstly, in this market for purchase and sale of different trade bills .<\/li>\n<\/ol>\n\n\n\n

    2. Acceptance houses<\/strong>: Secondly, under this market, trade bills accepts trade bills for purchase and sale.<\/p>\n\n\n\n

    3. Discount houses<\/strong>: Thirdly, these are the financial institutions which facilitates discounting of commercial bills and trade bills.<\/p>\n\n\n\n

    4. Dealers and brokers:<\/strong> Finally, it deals with trade bills to facilitate acceptance and discount of bills.<\/p>\n\n\n\n

    ii) Institutional structure<\/strong>– <\/p>\n\n\n\n

    1)Central bank: <\/strong>The role of central bank are-<\/p>\n\n\n\n

    -firstly, it regulates of money market. <\/p>\n\n\n\n

    -secondly, the central bank provides refinancing facilities to other institutions engaged in money market. <\/p>\n\n\n\n

    -finally, RBI purchase and sale of treasury bills etc. <\/p>\n\n\n\n

    2. Commercial banks<\/strong>: Further, it deals with commercial papers, certificate of deposits, treasury bills etc. in the money market.<\/p>\n\n\n\n

    3. Non-banking financial institutions<\/strong>: Additionally, it facilitates purchase and sale of money market instruments.<\/p>\n\n\n\n

    4. Dealers and brokers<\/strong>: Further, it performs activities to bring together the buyers and sellers of money market. <\/p>\n\n\n\n

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