INTRODUCTION Capital Market plays a crucial role in the country′s economic development for every country. In economic systems which exist almost everywhere in the world, health of a nation′s economy is dependent largely on capital market. Capital markets efficient functioning enables the corporate sector to raise the desired resources for gainful deployment in industries and the protection of the interest of investors. Financial institutions which are an integral part of financial market play crucial role in mobilizing domestic financial resources from savers and landing to investors the precise role of financial institutions depends however, on the stage of development of financial sector. In the early stages of development, banks dominate financial sector while financial markets and non–banking financial institutions play a more dominant role at a later stage. The process of evolving from a barter system to a money economy is clearly confirmed by different characteristic pattern observed in the financial sector of countries and in the economic development.