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Answer» (i) Money Market Definition: According to Crowther, “the money market is the collective name given to the various firms and institutions that deal in the various grades of near money.” (ii) Capital Market Definition: According to Aran K. Datta, capital market may be defined as “a complex of institutions investment and practices with established links between the demand for and supply of different types of capital gains”. | S.No. | Features | Money Market | Capital Market | | 1. | Duration of Funds | It is a market for shortterm loanable funds for a period of not exceeding one year. | It is a market for long-term funds exceeding period of one year. | | 2. | Supply of Fupds | This market supplies funds for financing current business operations working capital requirements of industries and short period requirements of the government. | This market supplies funds for financing the fixed capital requirements of trade and commerce as well as the longterm requirements of the government. | | 3. | Deals with Instruments | It deals with instruments like commercial bills (bill of exchange, treasury bill, commercial papers etc.) | It deals with instruments like shares, debentures, Government bonds, etc., | | 4. | Money Value | Each single money market instrument is of large amount. A treasury bill is of minimum for one lakh. Each certificate of deposits or commercial paper is for minimum of Rs 25 lakh. | Each single capital market instrument is of small amount. Each share value is Rs 10. Each debenture value is Rs 100. | | 5. | Role of Major Institution | The central bank and commercial banks are the major institutions in the money market | Development banks and Insurance companies play a dominant role in the capital market |
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