What Is The Process Of Business In Capital Market?

Capital Market refers to any kind of institution where the savings and surplus funds of the community are lent to traders, businessman, industrialists and others who require them.

It plays a very important role in the industrial and commercial development of a country. The capital market makes the requirements of capital for industrial and commercial undertakings are made by the capital market. Capital is needed by the industry from its inception to the end. Capital market can again be divided into three classes--- Money Market, Stock Exchange Market and Foreign Exchange Market.

The section of capital market, which is solely concerned with short-term loan for financing current business operations, is known as Money Market.

The other section of capital market which facilities the transference of capital for a long period is called the Stock Exchange Market. The stock exchange market is highly organized. It provides a market for buying and selling of stocks and shares of different industrial and commercial institutions.

Foreign Exchange Market is one where buying the selling of foreign currencies are made. In International trade, indebtedness among countries arises upon the mutual exchange of commodities, and it is settled up by means of foreign exchange. Foreign Exchange Market is highly specialized. It purchases and sells foreign currencies. Thus, it plays an important role in the sphere of import and export trade.

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