MERCHANT BANK

A merchant bank is a financial institution which provides capital to companies in

the form of share ownership instead of loans. A merchant bank also provides
advisory on corporate matters to the firms they lend to.
A merchant bank basically deals with international finance, long term loans to
various companies and Underwriting activities. t is not meant to be for the general
public as they do not provide general banking services. Merchant banking can
also be carried out by most banks in ndia under the department of Wholesale
banking.
These banks provide advisor services to clients based on a particular fee. They
also provide other financial services to mergers and clients. t is the only financial
institute that invests its capital in the clients' company. t acts as an intermediary
between those who possess capital and those who need capital.
Changing RoIe Of A Merchant Banker
n The Past.
The role of the merchant banker was to arrange the necessary capital and
ensure that the transaction would be implemented i.e. a financial intermediary
facilitating the flow of capital among the concerned parties.
Today.
A merchant banker plays multiple roles which include those of an entrepreneur, a
management advisor, an investment banker, and a transaction broker. This
shows that the breadth and depth of a merchant bankers activity has changed
over the years.
:nctions of the Merchant Banking Services
W Raise :nds
W Offer Advisory Services
W Sec:rity Distrib:tion
W Aid n Projects
W OveraII inanciaI Reconstr:ction
W Offer Advice On Management Of Risks