Business Ethics and Corporate Governance, Second Edition

NATURE OF THE INDIAN CAPITAL MARKET

The Indian capital market, like the money market, is known for its dichotomy. It consists of an organized sector and an unorganized sector. In the organised sector of the market, the demand for capital comes mostly from corporates, government and semi-government organizations. The supply comes from household savings, institutional investors such as banks, investment trusts, insurance companies, finance corporations, government and international financing agencies.

The unorganized sector of the capital market on the supply side consists mostly of indigenous bankers and moneylenders. While in the organized sector the demand for funds is mostly for productive investment, a large part of the demand for funds in ...