The Indian Securities market has become one of the most dynamic and efficient securities markets in Asia today.
History Of Stock Exchange In India
A small group of Stock Brokers in Bombay joined together in 1875 to form an association called Native Share and Stockbrokers Association.
The association drew up codes of conduct for brokerage business and mobilized private funds for investment in the corporate sector.
|Also Read : What Is The Stock Market?|
It was with this association that later become the Bombay Stock Exchange Which is the oldest stock exchange in Asia. This exchange is now known as the Stock Exchange, Mumbai or BSE.
During the latter half of the 19th-century shares of companies used to be traded in India occasionally.
In 1894 the brokers of Ahmadabad formed Ahmadabad Share and Stock Brokers Association which later become the Ahmadabad Stock Exchange the Second stock Exchange of India.
During the 1900s Kolkata becomes another major center of share trading on account of the starting of several indigenous industrial enterprises. As a result, the third stock exchange of the country was started by Kolkata Stock Brokers in 1908.
Yet Another Stock Exchange was started in 1920 at Chennai. However, by 1923, it ceased to exist. Later, in 1937 the Madras stock exchange was revived as many new cotton textile mills and plantation companies were floated in South India.
Three more stock Exchange was established before independence At Indore in Madhya Pradesh in 1930, at Hyderabad in 1943 and at Delhi in 1947 thus at the time of independence Seven stock exchanges were functioning in the major cities of the country.
The number of stock exchanges virtually remained unchanged for nearly three decades from 1947 to 1977, except for the establishment of the Bangalore Stock Exchange in 1957.
During the 1980s however many Stock Exchanges were established
- Cochin Stock Exchange (1978)
- Pune Stock Exchange (1982 )
- Uttar Pradesh Stock Exchange (at Kanpur 1982)
- Ludhiana Stock Exchange (1983)
- Gauhati Stock Exchange (1984)
- Kanara Stock Exchange (At Mangalore 1985)
- Magadh Stock Exchange (At Patna 1986)
- Jaipur Stock Exchange (1989)
- Bhubaneswar Stock Exchange (1989)
- Saurashtra Kutch Stock Exchange (at Rajkot 1989)
- Vadodara Stock Exchange (at Baroda1990)
Thus, from seven stock exchanges in 1947, the number of stock exchanges in the country increased to Eighteen by 1990.
Along with the increase in the number of stock exchanges, the number of listed companies and the capital of the listed companies have also grown, especially after 1985.
Two more stock exchanges were set up at Coimbatore and Meerut during the 1990s Taking the total to Twenty.
Establishment of SEBI (Securities and Exchange Board of India)
Until the late 1980s, BSE was operating with low transparency and unreliable settlement and clearing systems.
Towards the top of the 1980s, new economic forces, the economic process, and the currency crisis emphasized the requirement for modernization of the economic system.
The government created the Securities and Exchange Board of India (SEBI) in 1988.
Establishment of NSE (National Stock Exchange)
In April 1992, the Bombay Stock Exchange crashed because of Harshad Mehta Scam.
Therefore that time present finance minister of India Dr. Manmohan Singh urged the requirement of other Stock Exchange in competition to BSE.
He tapped the industrial Development Bank (IDB) to take the lead of the project of making competition for BSE.
In November 1992, NSE (National stock exchange) was established as a first electronically traded Stock Exchange in India.
After a couple of years of operations, the NSE has become the biggest stock market in India.