Merchant Banking

MERCHANT

BANKING

Agenda• Origin• Growth of Merchant Banks in India• Intermediary Channel• Definition• Code of Conduct• Merchant Banking Regulation ACT in India• Function and services • Scope in India• Conclusion

ORGIN

• The term merchant banking oriented from the London who started financing foreign trade acceptance of bills.

• Later, They helped government of under developed countries to raise long term funds.

• Later, These merchants formed an association which is now “ MERCHANT BANK AND SECURITIES HOUSE ASSOCIATION” .

• Grindlays bank (1969)• Citi bank (1970)• SBI (1972)• Other banks, private banks, foreign

banks.• FI’s, commercial banks, development

banks.

Growth of Merchant Banks in India

Krishnan(company)

Edward (Merchant banker)

Sairam(investor)

INTERMEDIARY CHANNEL

It is the conversion of dreams into reality with the help of money

DEFINITION

“A kind of financial institution which provides a variety of

services such as investment, banking, management of

customer’s bills, etc is known as merchant banking”.

CODE OF CONDUCT

• Protect the interest of investor.• No discrimination.• Prospectus, letter of offer etc is available to

investors.• Advice• Penal action by SEBI.• Not to create false market• True and adequate information• Adequate disclosures in a timely manner

i. Category I : Merchant bankers can act as issue manager

ii. Category II : Merchant bankers can act as co-manager

iii. Category III : Merchant bankers act as co-manager but cannot undertake portfolio management

iv. Category IV : Merchant bankers can merely act as consultant or advisor to issue of capital

Merchant Banking Regulation ACT in India

Functions and services

• Project Counselling and Pre-investment studies.

• Non-Resident Investment• Advisory service Relating to Management • Portfolio Management• Placement and Distribution• Management of Debts and Equity offering• Loan syndication

Scope in India

• Growth in new Market Issues• Innovations in Financial instrument• Disinvestment• Entry of Foreign Institutional

Investment• Changing Policy of Foreign

Investment

CONCLUSION

Inspite of problem popping up, merchant banking in India has vast scope to develop because of lot of domestic as well as foreign businesses booming here. Indian economy provides an amicable environment for these firms to set up, flourish and expand here.

PRESENTED BY :

• MANJU VELLADURAI (24)• MAYURI PATEL (27)• NIMITT VORA (62)

FYBBI - 2011