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Presented By:Lakshmi SharmaB.Com (prof.)6th term

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ContentsDefinition of Merchant bankMerchant banking in IndiaFeaturesNeed and importanceServices Provided by Merchant BanksMerchant banking v/s Commercial

bankingList of Registered Merchant Bankers

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Definition of merchant bank

A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans.

A merchant bank also provides advisory on corporate matters to the firms they lend to.

In the United Kingdom, the term "merchant bank" refers to an investment bank.

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Merchant Banking in India

Merchant banking activity was officially commenced into the Indian capital Markets when Grindlays bank received the license from reserve bank in 1967.

Grindlays started its operations with management of capital issues, recognized the requirements of upcoming class of Entrepreneurs for diverse financial services ranging from production planning and system design to market research.

Apart from this it also provides management consulting services to meet the Requirements of small and medium sector rather than large sector.

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Features

Combination of banking and consultancy services

Acts as a financial engineerProvides variety of services

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Need and importance

Growth of primary marketsPurchasing securitiesCapital flowPromoting financial surplusCoordinating activities to the share issueComplying with rules and regulations

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Services Provided by Merchant Banks:

Project Counseling Management of debt and equity offerings Issue Management Managers, Consultants or Advisers to the Issue Underwriting of Public Issue Portfolio Management Restructuring strategies Off Shore Finance Non-resident Investment Loan Syndication Corporate Counseling and advisory services Placement and distribution

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Merchant Bank Vs Commercial Bank

Commercial banks are catering to the needs of the common man whereas the merchant banks cater to the needs of corporate firms.

Any person can open a bank account in the commercial bank whereas it cannot be done in the merchant bank.

Merchant bank deals with equities whereas the commercial bank deals with debt related finance which includes the activities like credit proposals, loan sanctions etc.

The merchant bank is exposed to the market so it is more exposed to risk as compared to commercial banks.

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Cont.

Merchant bank is related to the primary market whereas the commercial markets are more into secondary markets.

Merchant banking activities are capital restructuring, underwriting,portfolio management etc whereas the commercial banks play the role of financers.

The activities of merchant banks have a direct impact on the growth and liquidity of money markets.   

Merchant Bank is management oriented whereas the commercial banks are asset oriented

The commercial banks generally avoid risks and on the other hand the merchant banks are willing to take the risks.

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List of Registered Merchant BankersAllahabad bank Bank of MaharashtraCanara bankDeutsche bankHDFC bank ltd.ICICI bank ltd.Indian overseas bankOriental bank of commercePNB gilts ltd.Punjab and Sind bank

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