Question

What is resource mobilisation in a debt capital market?

Answer 1

Resources can be mobilized either for short term or for long term. Economy consists of huge number of enterprises and individuals, requirements of all of them differ. Some have surplus cash to save, while some other needs cash. Some firms/individuals wants to make good there short term liquidity requirements, some wants money for long term capital investment. So distinction can be made as to period for which one intends to lend or borrow. In this sense financial market is categorized into money market and capital markets. In Money market, period involved (for funds movement) is 1 year or less, while in capital markets period is generally more than 1 year.  Banks basically caters to money market and mobilizes resources from savers to borrowers (this is because distinguishing feature of a bank is to accept deposits and open current accounts). But, it plays significant role in capital markets too, as it lends for capital investment purposes. As economy of the country grows, highly specialized institutions comes up which caters exclusively to capital needs and banks continues its money market business. These institutions are known as Capital Market intermediaries. I hope the answer was helpful to you If it was please mark it as brainlist ❤️