1.1.1 Types of Markets

This topic describes the types of markets and segments of the organized financial markets.

The main segments of the organized financial markets are as follows:

Table 1-1 Market Types

Market type	Description
Money Market	The money market is a wholesale debt market for low-risk, highly- liquid, short-term instruments. Funds are available in this market for periods ranging from a single day up to a year. Government, banks, and financial institutions dominate this market.
Capital Markets	The capital market is designed to finance long-term investments. The transactions taking place in this market are for periods over a year.
Forex Market	The forex market deals with multi-currency requirements, which are met by the exchange of currency. Depending on the applicable exchange rate, the transfer of funds takes place in this market. This is one of the most developed and integrated markets across the globe.
Credit Market	A credit market is a place where banks, financial institutions, and NBFCs purvey short, medium, and long-term loans to corporates and individuals. Such segregation of the financial market into various subgroups has enhanced the efficiency of resource allocation. Each market is unique in terms of the nature of participants, instruments, etc.