Functions of the Capital market
The organised and regulated capital
market motivates individual to save and invest funds. The
availability of safe and profitable source of investment is
an essential criterion to create propensity to save and invest
on the part of the earning public.
It provides for the
investors a safe and productive channel for investment of
savings and secures the recurring benefit of return thereon,
as long as the savings are retained.
It provides liquidity
to the savings of the investors, by developing a secondary
capital market, and thus makes even short term savings, consistently
available for long-term users.
It thus mobilises
savings of large number of individuals, families and associations
and make the same available for meeting the large capital
needs of organised industry, trade and business and for progress
and development of the country as a whole and its economy.
To discharge these
functions, the organised capital market accepts a dual responsibility.
the market and to promote savings & Investment.
To regulate the players
in the market vis-a-vis the investor and to enforce market
discipline through market regulators and registered intermediaries.
Such that the unorganised small man is able to deal through
these regulatory bodies and the intermediaries, and need not
necessarily has to come into direct contact with the ultimate
seekers of his savings.