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    Merchant Banking: Gokul.A S3 Mba JBS

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    nijina
    This document provides an overview of merchant banking, including its definition, origin, services offered, and difference from commercial banking. Merchant banking emerged in the 17th-18th centuries in Italy and France to finance foreign trade. It came to India through Grindlays Bank in 1967 and other banks soon followed. Merchant banks offer services like project counseling, working capital financing, portfolio management, credit syndication, and lease financing. The key difference from commercial banks is that merchant banks cater to corporate clients and are more involved in primary markets and management. Major players in India include SBI Capital, ICICI Securities, Axis Bank, and foreign institutions like Goldman Sachs and Citigroup.

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    Merchant Banking: Gokul.A S3 Mba JBS

    Uploaded by

    nijina
    8 views16 pages
    This document provides an overview of merchant banking, including its definition, origin, services offered, and difference from commercial banking. Merchant banking emerged in the 17th-18th centuries in Italy and France to finance foreign trade. It came to India through Grindlays Bank in 1967 and other banks soon followed. Merchant banks offer services like project counseling, working capital financing, portfolio management, credit syndication, and lease financing. The key difference from commercial banks is that merchant banks cater to corporate clients and are more involved in primary markets and management. Major players in India include SBI Capital, ICICI Securities, Axis Bank, and foreign institutions like Goldman Sachs and Citigroup.

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    This document provides an overview of merchant banking, including its definition, origin, services offered, and difference from commercial banking. Merchant banking emerged in the 17th-18th centuries in Italy and France to finance foreign trade. It came to India through Grindlays Bank in 1967 and other banks soon followed. Merchant banks offer services like project counseling, working capital financing, portfolio management, credit syndication, and lease financing. The key difference from commercial banks is that merchant banks cater to corporate clients and are more involved in primary markets and management. Major players in India include SBI Capital, ICICI Securities, Axis Bank, and foreign institutions like Goldman Sachs and Citigroup.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    8 views16 pages

    Merchant Banking: Gokul.A S3 Mba JBS

    Uploaded by

    nijina
    This document provides an overview of merchant banking, including its definition, origin, services offered, and difference from commercial banking. Merchant banking emerged in the 17th-18th centuries in Italy and France to finance foreign trade. It came to India through Grindlays Bank in 1967 and other banks soon followed. Merchant banks offer services like project counseling, working capital financing, portfolio management, credit syndication, and lease financing. The key difference from commercial banks is that merchant banks cater to corporate clients and are more involved in primary markets and management. Major players in India include SBI Capital, ICICI Securities, Axis Bank, and foreign institutions like Goldman Sachs and Citigroup.

    Copyright:

    © All Rights Reserved
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    of 16

    Merchant Banking

    GOKUL.A
    S3 MBA
    JBS

    Contents:

    Definition : Banking

    Merchant Banking : Origin

    Services of Merchant Banking

    Difference b/w commercial & merchant banking.

    Institutes offering Merchant Banking

    Definition: Banking

    Business activity of an financial advisory that accepts


    deposits and channels those deposits into lending
    activities, either directly or through capital markets.
    Few Services Offered:
    a) Savings/Current account
    b) Home/Personal loan
    c) Mutual fund
    d) collect cheques, drafts & notes.

    Merchant Banking: Origin

    Merchant Banking came into existence in 17th & 18th


    century in Italy & France.
    Merchant banking in the modern era started from London;
    Merchants started to finance the foreign trade through
    acceptance of bill.
    Merchant Banking officially came to India through
    Grindlays Bank in 1967.
    Recognized the requirements of upcoming class of
    Entrepreneurs for diverse financial services.

    Merchant Banking: Contd.

    Few Other Institutes who joined the bandwagon:

    Citibank Setup its merchant banking division in Indian


    in 1970.
    Indian banks Started banking Services from 1972.
    State bank of India started the merchant banking
    division in 1972.
    Many other banks came after this like ICICI, Canara
    Bank, UCO bank etc.

    Services:

    Project counseling.
    Working capital finance.
    Portfolio Management.
    Credit Syndication.
    Lease Financing.
    Some Other Services.

    Contd.

    Project counseling:

    Its a part of corporate counseling & deals with analysis of project


    viability .

    Comprises of preparation of project report & deciding finance


    pattern for cost of project.

    Filling up of application form with significant information for


    obtaining funds.

    Services contd.

    Working Capital Finance:

    Meeting the day-to-day expenses of an enterprise is working


    capital finance.

    Assessment of working capital requirements.

    Preparing necessary application to negotiation for sanction


    of appropriate credit facilities.

    Portfolio Management.

    Making decisions for the investment of cash resources of


    a corporate enterprise in marketable securities.

    Decides quantum, timing & type of security to be bought.

    Help in achieving maximum return with minimum risk by


    proper combination of securities.

    Services contd.

    Credit Syndication:

    Relates to activities connected with credit procurement &


    project financing.
    Estimates total cost of the project
    Drawing up of financial plan which conforms
    requirements of promoters & their collaborators.
    Selecting institutions for participation for financing.

    Lease Financing.

    Its an important alternative source of financing a capital


    outlay.
    Involves letting out assets on lease for use by the lessee
    for a particular period of time.
    Providing advice on viability of leasing & choice of
    favorable rental structure.

    Mutual Funds:

    Its collective investment scheme that pools money from


    several investors & channels them into productive
    investments.
    Investing money in diversified portfolio of shares &
    debentures.
    Assuring Investors return in terms of capital appreciation.

    Difference b/w Commercial & Merchant banks

    Commercial Banking

    Catering needs of common


    man.
    Anyone can open an A/c.
    Less exposed to risk.
    Related to secondary markets.
    Its asset oriented.
    Plays the role of financers.

    Merchant Banking

    Catering needs of corporate


    firms.
    It cannot be done.
    More exposed to risk.
    Related to Primary
    markets.
    Its management oriented.
    Plays different roles like
    underwriting, portfolio etc.

    Institutes offering Merchant Banking

    Public Sector

    SBI capital markets ltd


    Punjab national bank
    Bank of Maharashtra
    Karur Vysya bank ltd
    State Bank of Bikaner
    and Jaipur.
    IFCI financial services
    ltd.

    Private Sector

    ICICI Securities Ltd


    Axis Bank Ltd
    Bajaj Capital Ltd
    Reliance Securities
    Limited
    Kotak Mahindra Capital
    Company Ltd
    Yes Bank Ltd

    Key Foreign Players

    Goldman Sachs (India) Securities Pvt. Ltd.


    Bank Of America

    Citigroup Global Markets India Pvt.ltd

    R
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    THANK
    KIND
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    LIS

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