MARKET

GROUP-4 IIPM-ISBE(B)-SA3-1012
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INTRODUCTIO N
The debt market is any market situation where trading of debt instruments take place. A debt market establish a structured environment where it often goes by other names based on types of debt instruments that are traded. As the market mainly deals with trading of corporate bond issues the debt market may be known as a bond market. When fixed rates are connected with the debt instruments, the market may be known as a credit market.

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CLASSIFIACTION OF INDIAN DEBT MARKET

Government Securities Market (G-Sec Market): It consists of central and state government securities. It means that, loans are being taken by the central and state government. It is also the most dominant category in the India debt market. Bond Market: It consists of Financial Institutions bonds, Corporate bonds and debentures and Public Sector Units bonds. These bonds are issued to meet financial requirements at a fixed cost and hence remove uncertainty in financial costs.

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DEBT INSTRUMENTS
Government Securities Corporate Bonds

Certificate of Deposit Commercial Papers

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Government Securities It is the Reserve Bank of India that issues Government Securities or G-Secs on behalf of the Government of India. These securities have a maturity period of 1 to 30 years. G-Secs offer fixed interest rate, where interests are payable semi-annually. For shorter term, there are Treasury Bills or T-Bills, which are issued by the RBI for 91 days, 182 days and 364 days

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Corporate Bonds
These bonds come from PSUs and private corporations and are offered for an extensive range of tenures up to 15 years. Comparing to G-Secs, corporate bonds carry higher risks, which depend upon the corporation, the industry where the corporation is currently operating, the current market conditions, and the rating of the corporation

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Certificate of Deposit

Certificate of Deposits (CDs), which usually offer higher returns than Bank term deposits, are issued in demat form Banks can offer CDs which have maturity between 7 days and 1 year. CDs from financial institutions have maturity between 1 and 3 years

Commercial Papers short term securities with maturity of 7 to There are

365 days. In other words they are unsecured promissory noteswith a fixedmaturity. They are issued by large banks and corporate to meet short term debts. Typically the longer the maturity on a 4/8/12 note, higher the interest rate.

Thank You

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