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Meaning
In banking, merchant bank is a financial institution
primarily engaged in offering financial services and advice to corporations and wealthy individuals on how to use their money.
The term can also be used to describe the private equity
activities of banking.
companies. Some confuse this with investment banking and an issue house. Yet another group of persons mean it to what a merchant banker does. In this situation, let us try to settle for a workable definition of this term.
and non-banking services Merchant bankers -neither merchants nor bankers Rule 2(e) of SEBI (merchant bankers) Rules 1992, defines merchant banker means any person who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities as manager-consultant, advisor or rendering corporate advisory services in relation to such issue management
A bank can undertake merchant banking business, but a Merchant Bank can not undertake banking business.
Selling issues of securities of companies, Underwriting functions, Helps in mergers and acquisitions, Investment advises, Finding buyers for private placement, Dealing in securities, etc.
investment advises and dealing in securities are not performed by Merchant Banker.
Subsidiary
Division in Bank
Modernization
Diversification Mobilizing Resources Raising Working Capital
Project counseling or reinvestment studies for investors Syndication of loans and project finance Issue management Provision of working capital Portfolio Management Foreign Currency Loans
Continued..
Mutual funds
Lease finance Bill discounting
Continued..
Underwriting
Non-resident investment Relief to sick industrial units Hire purchase Money market operations
Issue
led manager/co-manager/advisor or consultant to an issue, portfolio manager and underwriter to an issue. Category II those authorised to act in the capacity of co-manager or consultant to an issue or portfolio manager. Category III those authorised to act only in the capacity of advisor or consultant to an issue.
under sec. 25 of the companies act 1956 Reasons to form AMBI No control on prices of new issues Prices decided by merchant bankers Investors have become more demanding Demands for stringent regulation of the merchant bankers.
Canara Bank
One of the leading Merchant Bankers in India
Corporations, Local Statutory bodies and corporate sector. They are SEBI registered Category I Merchant Banker/Underwriter to carry on Issue Management (Public/Rights/Private Placement Issues), Underwriting, Consultancy and Corporate Advisory Services etc. They also hold SEBI registration Certificate to act as "Bankers to an Issue" with network of exclusive Capital Market Service Branches to handle "Capital Market" related assignments.
SPECTRUM OF SERVICES
Equity Issue (Public/Rights) Management Debt Issue Management Private Placements Project Appraisals Monitoring Agency Assignments IPO Funding Security Trustee Services Agriculture Consultancy Services Corporate Advisory Services Mergers and Acquisitions Buy Back Assignments Share Valuations