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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