Study On Merchant Banking In India At Hsbc Bank

Abstract

A merchant bank is a capital-providing financial institution to corporations in the form of shareholding rather than a loan. A merchant bank also offers corporate advisory to the companies in which they invest. In the United Kingdom, the older term "merchant bank" is used to describe a bank. A Merchant Bank may be loosely defined as a private equity investment arm of a financial services company offering investment banking and ancillary services as well. Since a merchant bank plays the role of an advisor and broker as well as a principal, a merchant bank has a longer-term orientation than an ordinary investment bank and takes a keen interest in the viability of every investment opportunity and giving the correct advice to form a strong alliance with each client company. In banking, a merchant bank is an older term for an Investment Bank. It may also be used to describe banking's private equity activities. This article is concerned with the history of banking as established by the merchants, dating back from the middle Ages. Merchant banking is a valuable service rendered by a group of financial institutions that facilitates the development of the corporate sector which finally translates into the overall economic development of the nation. Merchant banks were supposed to undertake various functions like issue management, underwriting, portfolio management, loan syndication, consultant, advisor and host of other functions. Merchant banking is a blend of banking and consultancy services.