MUTUAL FUNDS & MERCHANT BANKING

PRESENTATION ON

PRESENTED TO:-PROF. Premraj Alva

MUTUAL FUNDS & MERCHANT BANKINGPRESENTED BY:-ANIKET SAWANTSUNEET HEREKARSETH DIVISHA DINESHSHANTANU SHAHASANERAVINDRA JADHAVPRATIK AWASARESHRUTIKA KADAMVIVEK KOTHAWALEADITI JOSHI

ROLL NO.

NAMES TOPIC MUTUAL FUND & MERCHANT BANKING

SLIDE NO.

131 PRIYANKA R. MERUGU

133 ANIKET V. SAWANT

134 SUNEET S. HEREKAR

135 SETH DIVISHA DINESH

136 SHANTANU R. SHAHASANE

137 RAVINDRAT. JADHAV

138 PRATIK S. AWASARE

139 SHRUTIKA S. KADAM

140 VIVEK V. KOTHAWALE

141 ADITI A. JOSHI

ACKNOWLEDGEMENT

We would like to express my special thanks of gratitude to my Prof. Premraj Alva Sir, who gave us golden opportunity to do this wonderful project on the topic “MUTUAL FUNDS & MERCHANT BANKING”. While studying this project we gained lot of knowledge and information.

Secondly we would also like to thank to our friends who helped to finish this project within the limited time. We have made this project not only for marks but also to increase our knowledge.Thank you one and all.

Flow Of PresentationCONCEPT AND HISTORY OF MUTUAL FUNDSHOW MUTUAL FUNDS WORK WHAT THEY ARETYPES OF MUTUAL FUNDS IMPORTANCE OF MUTUAL FUND RISK FACTORSEBI GUIDELINESFACILITIES AVAILABLE TO INVESTORSSELECTION OF FUNDREASONS FOR SLOW GROWTHBENCHMARKINGLIST OF MUTUAL FUNDS COMPANIES IN INDIAHISTORY OF MERCHANT BANKINGSERVICES OF MERCHANT BANKQUALITIES REQUIRED OF MERCHANT BANKERSPROBLEMS OF MERCHANT BANKINGSCOPE OF MERCHANT BANKING IN INDIAGUIDELINES OF MERCHANT BANKERSMERCHANT BANK & COMMERCIAL BANK

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Let us understand the concept of a Mutual Fund

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Stock Price Infosys Rs.2700 SBI Rs.2100 L&T Rs.1400 Grasim Rs 2800

Only Rs. 3000 to invest

Imagine an investor who has only Rs. 3000 to invest. How does he invest in all the major stock such that he creates diversified portfolio

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There could be many such investor- who have small capital amounts to invest they can not buy stock diversified manner

Only Rs. 3000 to invest


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Enter The Fund Manger

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The fund manger walks in now. He pools in the money of all the investors

Total Rs. 9000 to invest


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With the pooled money he buys the shares available

Buy each share of Infosys, SBI, L & T And Grasim

Amount to invest = Rs. 9000

Amount to invest = Rs. 2700

Rs. 2100

Rs. 1400

Rs. 2800

___________

Rs. 9000


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The investors put together hold 1 share each of Infosys, SBI, L & T And Grasim. Effectively, each of them hold 0.33 shares of each company

Stock Price Infosys Rs.2700 SBI Rs.2100 L&T Rs.1400 Grasim Rs. 2800

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This is the concept of mutual fund. Investors combine to pool their money and invest in a fund- whose manager then invests into securities on their behalf. Each investors thus gets benefit of being able to create a diversified portfolio even while investing smaller amounts


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• A Mutual Fund is trust that pools savings of number of investors who share a common financial goal.• The money thus collected is then invested in capital market

instrument such as shares, debentures and other securities• The income earned through these investments and capital

appreciation realized are shared by its unit holders in proportion to the number of units owned by them

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History of Mutual Funds First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank Of India. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canrabank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990.The end of 1993 marked Rs.47,004 as assets under management.

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Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund Industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.The 1993 SEBI (Mutual Fund) regulations were substituted by a more comprehensive and Revised mutual fund regulations in 1996. The industry now functions under the SEBI (mutual Fund) regulations 1996.The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The unit trust of India with rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

There have been several amalgamation of mutual funds. The mutual fund have also become popular among retail investors. There were 28 mutual funds operating in India in April, 2005 12

How Mutual Funds WorkWHAT THEY ARE

• A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments.

• The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor’s proportionate ownership of the fund’s holdings and the income those holdings generate

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Types of Mutual funds

On the basis of execution & operation

On the basis of yield & investment pattern

Close-ended funds Open-ended funds

Growth Fund

Balance Funds

Money Market Mutual Funds

Taxation Funds

Specialised Funds

Leveraged Funds

Dual Funds

Index Funds

Bonds Funds

Aggressive Growth Funds

Off-shore

Mutual Funds

Property funds

Funds Of

Funds

Income Funds Real

Estate Mutual Funds

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Types of Mutual funds On the basis of execution & operation

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CLOSE ENDED FUND

Close ended funds are funds which have definite period or target amount Once the period is over and or the target is reached, the door is closed for the investors. They cannot purchase any more units. These units are publicly traded through stock exchange and generally, there is no repurchase facility by the fund. The main objective of this fund is capital appreciation. Thus after the expiry of the fixed period, the entire corpus is disinvested and the proceeds are distributed to the various unit holders in proportion to their holding. Thus the fund ceases to be a fund, after the final distribution. E.g. UTI Master Share, 1986.

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OPEN ENDED FUND

Open ended funds are those which have no fixed maturity periods. Open ended scheme consists of mutual funds which sell the units to the public. These mutual funds can also repurchase the units. Initial Public Offer (IPO) is open for a period of 30 days and then reopens as an open-ended scheme after a period not exceeding 30 days from the date of closure of the IPO. Investors can buy or repurchase units at net asset value or net value related prices, as decided by the mutual fund. Example: Unit Trust of India‘s Growth.

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DIFFERENCECLOSE ENDED

• Close-ended schemes have fixed maturity periods. Investors can buy into these funds during the period when these funds are open in the initial issue.

• After that such schemes can not issue new units except in case of bonus or rights issue. However, after the initial issue, you can buy or sell units of the scheme on the stock exchanges where they are listed.

• The market price of the units could vary from the NAV of the scheme due to demand and supply factors, investors’ expectations and other market factors

OPEN ENDED

• These schemes have unlimited capitalization, open-ended schemes do not have a fixed maturity, there is no cap on the amount you can buy from the fund and the unit capital can keep growing.

• These funds are not generally listed Any time exit option, The issuing company directly takes the responsibility of providing an entry and an exit.

• This provides ready liquidity to the investors and avoids reliance on transfer deeds, signature verifications and bad deliveries.

• Any time entry option, An open-ended fund allows one to enter the fund at any time and even to invest at regular intervals. on any exchange. 19

Types of Mutual fundsOn the basis of yield &

investment pattern

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1. INCOME FUND

Income funds are those which generate regular income to the members on a periodical basis.It concentrates more on the distribution of regular income and it also sees that the average return is higher than that of the income from bank deposits.The investor is assured of regular income at periodical intervalsThe main objective is to declare regular dividends and not capital appreciation. The investment pattern is towards high and fixed income yielding securities It is concerned with short run gains only.

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2. GROWTH FUND

Growth are those which concentrate mainly on long term gains i.e., capital appreciation. Hence they are termed as “Nest Eggs” investments. It aims at meeting the investors‘ need for capital appreciation. The investor‘s strategy conforms to investing the funds on equities with high growth potential.The Investment tries to get capital appreciation by taking much risks and investing on risk bearing equities and high growth equity shares.The fund declares dividends. e. It is best suited to salaried and business people

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4. SPECIALISED FUNDSThese are special funds to meet specific needs of specific categories of people like pensioners, widows etc

It is a balance between income and growth fund. This is called as Income-cum-growth. It aims at distributing regular income as well as capital appreciation. Thus the investments are made in high growth equity shares and also the fixed income earning securities.

3. BALANCE FUND

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5. MONEY MARKET MUTUAL FUND

• The funds are invested in money market instruments. • These funds basically have all the features of open ended funds but they invest in

highly liquid and safe securities like commercial paper, bankers‘ acceptances, and certificates of deposits treasury bills. • These funds are called ―money funds‖ in the U.S.A. The RBI has fixed the

minimum amount of investment as Rs.1 Lakh, it is out of the reach of many small investors. • However, the private sector funds have been permitted to deal in money market

mutual funds. It is best suited to institutional investors like banks and other financial institutions.

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6. TAXATION FUND

It is a fund which offers tax rebated to the investors either in the domestic or foreign capital market. It is suitable to salaried people who want to enjoy tax rebates particularly during the month of February and March. An investor is entitled to get 20% rebated in Income Tax for investments made under this fund subject to a maximum investment of Rs.10,000 per annum. E.g. Tax Saving Magnum of SBI Capital Market Limited.

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7. Leveraged Funds

Also called as borrowed funds as the are used primarily to increase the size of the value of portfolio of a mutual funds. When the value increases, the

earning capacity of the fund also increases.

8. Dual Funds

It is a fund which gives a single investment opportunity for two different types of investors. It sells income shares and capital. Those investors who seek current investment income can purchase incomes shares. The capital shares receive all the capital gains earned on those shares and they are not

entitled to receive any dividend of any type.26

9. Index Fund

It is a fund based the some broad market index. This is done by holding securities in the same proportion as the index itself. The value of these index linked funds will automatically go up whenever the market index

goes up and vice versa.10. Bond Funds

The funds have portfolios consisting mainly of fixed income securities like bonds. The main thrust is income rather than capital gains.

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11. Aggressive Growth Funds

These funds are capital gains oriented and thus the thrust area of these funds is capital gains. Hence, these funds are generally invested in speculative stocks They may also use specialized investment techniques like short term trading, option writing etc.,

12. Off shore Mutual Funds

These funds are meant for non resident investors. These funds facilitate flow of funds across different countries, with free and efficient movement of capital for investment and repatriation.

13.Property Fund

These funds are real estate mutual funds. Its investment also includes shares/bonds of companies involved in real estate and mortgage backed companies

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14.Fund of Funds

It is a fund that invests in other mutual fund schemes. The concept in prevalent in abroad.

15. Real Estate Mutual Funds

The real estate mutual funds scheme is mutual funds scheme with the investment objective of direct or

indirect investment in real estate property29

IMPORTANCE OF MUTUAL FUND

• TAX BENEFIT- Mutual fund do not deduct tax at source from dividends, mutual fund themselves are totally exempt from tax on all income on their investment.

• SUPPORT CAPITAL MARKET- It provide sustainable domestic source of demand for capital market instruments , it provide valuable liquidity to capital market.

• PROMOTE INDUSTRIAL DEVPT- It provide financial resources to the industries at market rate, it create a demand for these capital market instruments.

• PROVIDE GREAT AFFORDABILITY & LIQUIDITY- It provide an attractive & cost effective alternative to direct purchase of shares ,units can be sold to the fund at the net asset value.

• ACT AS SUBSTITUTE TO IPO- It also guaranteed a certain percentage of IPO’s by companies, allotment of shares is more or less guaranteed.

• KEEP MONEY MARKET ACTIVE- It provide stability to share prices, safety to investors, resources to prospective entrepreneurs.

• PROVIDING RESEARCH SERVICE- Investment is done purely on basis of thorough research, investor get the benefit of the research done by fund.

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• KEEP MONEY MARKET ACTIVE- It provide stability to share prices, safety to investors, resources to prospective entrepreneurs.

• PROVIDING RESEARCH SERVICE- Investment is done purely on basis of thorough research, investor get the benefit of the research done by fund.

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RISK FACTORType of risk Type of investment affected How the fund could lose money

Country risk Foreign investment The value of a foreign investment declines because of political changes or instability in the country where the

investment was issued.

Credit risk Fixed income securities If a bond issuer can’t repay a bond, it may end up being a worthless investment.

Currency risk Investments denominated in a currency other than the Canadian

dollar

If the other currency declines against the Canadian dollar, the investment will lose value.

Interest rate risk Fixed income securities The value of fixed income securities generally falls when interest rates rise.

Liquidity risk All types The fund can’t sell an investment that’s declining in value because there are no buyers

Market risk All types The value of its investments decline because of unavoidable risks that affect the entire market.

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SEBI GUIDELINES

1. These Regulations may be called the Securities and Exchange Board of India (Mutual

Funds) (Third Amendment) Regulations, 2013.

2 . They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, ─

(I) in regulation 24, in clause (b), the following proviso shall be inserted, namely-

"Provided further that the asset management company may become a proprietary

trading member for carrying out trades in the debt segment of a recognized stock

exchange, on behalf of a mutual fund.“

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Continue….• (II) in regulation 26, in sub-regulation (2), the following proviso shall be inserted, namely- • "Provided that where the sponsor or its associates hold 50 per cent or more of the voting rights of the share

capital of the custodian, such custodian may act as custodian for a mutual fund constituted by the same sponsor or any of its associates or subsidiary company if:

• (i) the sponsor has a net worth of at least twenty thousand crore rupees at all points of time; (ii) 50 per cent or more of the directors of the custodian are those who do not represent the interest of the sponsor or its associates; (iii) the custodian and the asset management company of a mutual fund are not subsidiaries of each other; (iv) no person is a director of both the custodian and the asset management company of a mutual fund; and (v) the custodian and the asset management company of a mutual fund sign an undertaking that they will act independently of each other in their dealings with the scheme."

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FACILITIES AVAILABLE TO INVESTORS

• ROLL OVER FACILITY• LATERAL SHIFTING FACILITIES• DIVIDEND SWEEP FACILITY• SYSTEMATIC WITHDRAWL PLAN• REISSUE FACILITIES• TRIGGER FACILITY• REPURCHASE FACILITY

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• ROLL OVER FACILITYAt the time of redemption, the investor is given an option to reinvest his entire investment.• LATERAL SHIFTING FACILITY

Some mutual funds permit the investors to shift from one scheme to another on the basis of NAV.• REISSUE FACILITY

The unit brought from investor is again are being reissued to those who are interested in purchasing them.

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• DIVIDEND SWEEP FACILITYUnit holder is given an option to sweep or invest the dividend earned in a scheme into any other open ended scheme

• SYSTEMATIC WITHDRAWL PLANIt is nothing but redemption at predetermined regular intervals at the option of unit holder.

• REPURCHASE FACILITYThe process of buying back units from the investor by fund is called repurchase facility.

• TRIGGER FACILITYIt is a facility where transaction is automatically triggered.

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SELECTION OF FUND

• OBJECTIVE OF THE FUNDWhether it is income oriented or growth oriented.• CONSISTENCY OF PERFORMANCE

Consistency in performance is a good indicator of its investment expertise.• HISTORICAL BACKGROUND

A good historical record could be a better horse to bet on the new funds.

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• COST OF OPERATIONIn this case, prospective investors should scrutinise the expense ratio of the fund & compare it with others.• CAPACITY OF INNOVATION

The efficiency of fund managers can be tested by means of innovative schemes.• INVESTOR SERVICING

In this case the most important factor to be considered is prompt & efficient servicing.

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• MARKET TRENDSA prudent investor must keep eye on stock market index, interest rate, inflation rate.

• TRANSPERENCY OF FUND MANAGEMENTThe success of mutual fund depends to a large extent on the transparency of the fund management.

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REASONS FOR SLOW GROWTH

• DISPARITY BETWEEN NAV & LISTED PRICEReal dilemma for investor is disparity between NAV & listed price.

• NO UNIFORMITY IN CALCULATION OF NAVThere is no standard formula for the calculation of the NAV.

• LACK OF TRANSPARENCYMutual funds in India are not providing adequate information & materials to investors.

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• POOR INVESTOR SERVICINGMutual funds have failed to build up investor confidence by rendering poor services.

• TOO MUCH DEPENDENCE ON OUTSIDE AGENCYThey don’t have their own research cell hence they have to depend on outside agencies for collection of data.

• INVESTORS PSYCHOLOGYLack of patience among investors retard the growth of mutual fund.

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• ABSENCE OF QUALIFIED WORK FORCEProfessional agents & intermediaries can build efficient management of fund.

• OTHER REASONLack of investors education in the country, unawareness of mutual fund industry etc.

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BENCHMARKING

• Basis for choosing an Appropriate Performance Benchmark• The appropriate benchmark has to be selected by reference to:• The Asset Class it invests in. Thus, an equity fund has to be judged by from an appropriate

benchmark from the equity market and so on.• The fund’s stated Investment Objective.

• There are three types of benchmarks that can be used to evaluate a fund’s performance:• Relative to the market as a whole.• Relative to other mutual funds.• Relative to other comparable financial products or investments options open to the investor.

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HISTORY OF MERCHANT BANKING• 13th Century merchant bankers were traders of commodities and

acted as bankers to the kings of European states.• They Financed the continental wars and coastal trades.• They lent their names to lesser known traders by accepting bills

through which they guaranteed that the holder of the bill would receive full payment.

• “Merchant Bankers” is a term of English origin. In its earliest form, it was “Merchants and Bankers.” It meant that a firm that began as merchant or trader extended its activities by offering credit to its clients. Thereafter, some firms gave up acting as goods merchants and concentrated on trade finance, securities, investment management and venture capital

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SERVICES OF MERCHANT BANK

• CORPORATE COUNSELLINGIt involve various activities like project counselling, capital restructuring, project management, loan syndication, etc.

• PROJECT COUNSELLINGIt involve preparation of project reports, appraising project reports with financial institutions or banks, deciding upon financing pattern etc.

• LOAN SYNDICATIONIt refers to assistance rendered by merchant banks to get mainly term loan for projects.

• POST ISSUE MANAGEMENTIt consists of collection of application forms & statement of amount received from bankers, share certificate, screening application, refund orders, deciding allotment procedure.

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Continue…..• ISSUE MANAGEMENT

It involve management of issues which include marketing of corporate securities, equity of shares, preference shares, debentures, etc.

• MARKETINGAfter SEBI approval the merchant bankers arrange a meeting with various entities like advertising agent, company representative, publicity campaignMerchant bankers have to ensure that the material is delievered to stock exchange at leas 21 days before the issue option & to brokers to the issue, branches of brokers to the issue, underwriters on time.

• PRICING OF ISSUESAccording to SEBI guideline 1992 for capital issues have opened the capital market to free pricing of issues.

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Continue…..• UNDERWRITING OF PUBLIC ISSUE

It is an insurance to the company which proposes to make public offer against risk of under subscription.

• PUBLIC ISSUE THROUGH PROSPECTUSTo bring out public issue merchant bankers have to coordinate the activities relating to issue with different government, public bodies, professional.They have to ensure that information required by companies act & SEBI are furnished in the prospectus.It is only after SEBI clearance, prospectus can be filed with registrar of the company.

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• PORTFOLIO MANAGEMENTIt refers to investment in different kinds of securities such as shares, debentures, bonds issued by different companies & securities issued by the government.

• MANAGERS,CONSULTANTS, ADVISERS TO THE ISSUEThey assist in drafting of prospectus, application forms, completion of formalities under companies Act, appointment of registrar.SEBI guidelines insist that all issues should be managed by atleast one authorised merchant banker.In issues over Rs100 crores, upto 4 merchant bankers are associated could be associated as managers.

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QUALITIES REQUIRED OF MERCHANT BANKERS

• Ability to analyse various aspects such as technical, financial, economic aspects concerning the information of an industrial project.• Knowledge about various aspects of capital

market, trends in stock exchange, psychology of investing people, change in the economical & technological environment in the country.

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• Ability to build up the bank-client relationship &live upto clients expectation with total involvement in project assigned to them.• Innovative approach in developing capital market instruments to satisfy

the ever changing needs of investing public.• Integrity & maintenance of high professional are the essential requisite

for success of merchant bankers present scenario.

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PROBLEMS OF MERCHANT BANKING

• SEBI guidelines have authorised merchant bankers to undertake issue related activities only with an exception of portfolio management.

• SEBI guideline stipulate a minimum of Rs 1 crore for authorisation of merchant banker, small but professional & specialised merchant bankers who do not have Rs 1 crore may have to close down their business.

• Non cooperation of the issuing companies in timely allotment of securities, refund of application of money is another problem of merchant bankers.

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SCOPE OF MERCHANT BANKING IN INDIA• GROWTH OF NEW ISSUES MARKET

The amount of annual average of capital issues by non government public companies was only about 90 Cr in70’s,it rose to 1000 Cr in 80’s,furher to 22,232.69Cr in 2009-10.The number of capital has also increased from 516 in 1991-92 to 1,211 in 2005-06.

• DEVELOPMENT OF DEBT MARKETThe total amount mobilised through privately placed debt securities in 2009-10 was Rs 67,790.46 Cr.Hence development of debt market will offer tremendous opportunity to merchant bankers.

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Continue……..• ENTRY OF FOREIGN INVESTORS

Impact of increase in number of joint ventures abroad by Indian companies, rise in FDI investment, indian capital market opening in 1992 , permitting indian companies to directly tap foreign capital through euro issues.

• CHANGING POLICIES OF FINANCIAL INSTITUTIONSImpact of decentralisation, encouragement of small & medium industries, changing emphasis policies of financial institutions from security orientation , corporate enterprises.

• DISINVESTMENTThe government raised Rs 2000 Cr through disinvestment of equity shares of selected public sector undertaking in 1993-94.The government proposal of shifting the present method of periodic sale of public sector shares to round the year off loading of shares directly on stock exchange from the year1995-96.

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GUIDELINES OF MERCHANT BANKERS• An initial authorisation fee, annual fee, renewal fee may be collected by

SEBI.• All issues must be managed atleast by one authorised merchant banker,

the specific responsibilities of each lead manager must be submitted prior to SEBI prior to the issue.

• Each merchant banker required to furnish to the SEBI half yearly unaudited financial results when required by it with a view to monitor the capital adequacy of the merchant banker.

• The lead merchant banker holding a certificate under category 1 shall accept minimum underwriting obligation of 5% of the total underwriting commitment or Rs 25 lakhs whichever is less.

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• SEBI has prescribed a code of conduct to the merchant bankers.• According to guidelines issued during aril 1990, professional qualification

in finance, law, business management, infrastructure like adequate office space, equipment, manpower, employment of two persons who have the experience to conduct business of merchant bankers, capital adequacy.• SEBI revised guideline on December 22,1992 classify the activities of

merchant bankers as follows:

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• The first category consists of merchant bankers who carry on any activity of issue management.• The second category consists of those authorised to act in the capacity of

co-manager, advisor, consultant, underwriter to an issue or portfolio manager.• The third category consists of authorised to act as underwriters, advisor or

consultant to an issue.• The fourth category consists of merchant bankers who act as advisor or

consultants to an issue.

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• SEBI has been vested with power to suspend or cancel the authorisation in case of violation of the guidelines.• It is obligatory relating to an issue particularly on disclosure, allotment,

refund, maintenance of books of accounts & submission of half yearly report to SEBI.• Inspections will be conducted by SEBI to ensure that provisions of the

regulations are properly compiled with & to investigate the complaints from customers.

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MERCHANT BANK & COMMERCIAL BANK• MERCHANT BANK

Activities include project counselling, corporate counselling in areas of capital restructuring, amalgamations, mergers ,takeover, discounting, rediscounting of short term paper in new issue market, act as a broker, advisers on portfolio management in stock exchange.Their activities have impact on growth, stability, liquidity of money market.They are management oriented, they are willing to accept risk of business.Activities of merchant bankers is equity & equity related finance.They deal mainly through fund raised through money market, capital market.

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• COMMERCIAL BANKThey are asset oriented, their lending decisions based on detailed credit analysis of loan pruposals, value security offered against loanThey are risk avoider.Hence they deal in debt& debt related finance like credit appraisal, loan sanction .

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Education

MUTUAL FUNDS & MERCHANT BANKING