27-03-2012, 12:49 PM
Financial services management
28076595-Merchant-Banking-in-India.pdf (Size: 271.46 KB / Downloads: 42)
INTRODUCTION
Financial services are an important component of financial system. The
smooth functioning of financial system depends upon the range of financial
services extended by the providers. Financial services in India have
witnessed remarkable changes in the recent past after the implementation of
“Liberalization, privatization and globalization”.
DEFINITION:
In banking, a 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.
ORIGIN
Merchant banking originated through the entering of London merchants in
foreign trade through acceptance of bill. Later, the merchants assisted the
Government of under developed countries in raising long – terms through
floatation of bonds in London money market. Over a period they extended
their activities to domestic business of syndication of long term and short
term finance, underwriting of new issues, acting as registrars and share
transfer agents, debenture trustees, portfolio managers, negotiating agents
for mergers, takeovers etc.
Merchant Banking in India – Historical Perspective:
Till 18th century moneylenders, moneychangers, village merchants
(maharanis), & saucers performed the function of banks & merchant banks.
They also issued & discounted bills of exchange (handiest) & bank draft.
They gave loans on mutual trust, on mortgage of lands, ornaments & other
property.