Problem & Prospects of Marchant Bank

8/3/2019 Problem & Prospects of Marchant Bank

http://slidepdf.com/reader/full/problem-prospects-of-marchant-bank 1/3

High Flotation cost :For high flotation cost small entities cannot enter the market.

Information Asymmetry

-Access to credible information is restricted

-Syndicate of large investors manipulates the market through price inflation, pump and dump

strategies Supply S ide Constraints

R educing supply side constraints generates liquidity, reducing scope for price manipulation.

V al uation Dis parity

Value of scripts is subject to speculative trading rather than sound fundamentals, resulting in

market volatility.

High bank de posit rates

High bank interest rates deterred public borrowing by the corporate bodies, thwarting the

expected development of a debt market.

Lack of a Formal Debt Market

-Bangladesh does not have established secondar y debt market.

-Markets are unable to provide short term financing solutions to corporations, i.e., commercial

paper

High government borrowing at high interest rates

The government has traditionally been the major borrower through the various µnational savings

schemes¶ and that too at the highest interest rate bracket and in unlimited

The government instruments were crowding out corporate borrowers and bank deposits in

comparable tenures

Low long-term borrowing requirement

Owing to a bitter colonial past and lack of resources, historically there was a weaker base for

industrialization and related formalized commercial activities. This has kept the demand for

long-term capital and credit requirement at the formal market at a lower level

High bank de posit rates

High bank interest rates deterred public borrowing by the corporate bodies, thwarting the

expected development of a debt market.



U naccountable tr u stees

Owing to the absence of a clear regulator y regime, the system failed to hold the Trustees of

debenture responsible for failure to defend the rights of the debenture-holders in many cases

when issuing companies declined to honor obligations.

should more clearly define respective responsibilities of staffs, managers, board of

directors and shareholders in the attainment of goals and establish a procedure of

sanctions attached to these responsibilities.

should more clearly define respective responsibilities of staffs, managers, board of

directors and shareholders in the attainment of goals and establish a procedure of

sanctions attached to these responsibilities.

In order to increase the profitability & reduce the risk, IDLC& Investment Ltd. should

maintain a well- balanced portfolio. The more diversified the portfolio, the lesser the risk

of losses.

It is to be keeping with mind that competitors can copy product but cannot copy the

understandings & expertise.

Establish priorities for capabilities for new product investment as well as better ways to

minimize gaps in strategic management.

should continuously redefine new demand for financial, brokerage services & ensure that

this understanding is unique & actionable

Filing of the prospectus

y Printing and dispatch of prospectus and application form.

y Filing of initial listing application.

y Promotion of the issue.

y Statutor y announcement.y Collection of applications

y Processing of applications

y Allotment of shares

y Listing of the issue

y Cost of public issue



Future prospects of India

y Growth of primar y market

y Entr y of foreign investors

y Changing policy of financial institutions

y Development of debt market

y Corporate restructuring

y Conclusion:

y Performance evaluation of a bank actually depends on way of operation. The IDLC has a

efficient internal management system to execute the operations. However there are

variation in the ratios of IDLC, that may be a effect of change in investment decision and

adverse economic condition. We found some of the investment decision does not match

the formatted manner and for that variation occurs in some of the ratios but it varies in

different financial and environmental situation. So without considering other factors

those cannot be said inefficient decisions.

Documents

Problem & Prospects of Marchant Bank