This action might not be possible to undo. Are you sure you want to continue?
First and foremost, I am indebted to Mr.
, my project guide who was a constant source of
guidance and inspiration throughout the project.
I also owe this project to Mr.
for sharing their knowledge with me. This project would not
have been a success without their help.
I am also thankful to Mr.
for the logistical support extended by them from time to time.
Last but not the least, I
INTRODUCTION OF INVESTMENT BANKING Investment bankers function as intermediaries in financial transactions. They are experienced in carrying out projects that, for most companies, take place very rarely, but are critically important.
What is Investment Banking? Investment banking is a multi-faceted practice area that involves structuring financial transactions for private and public companies into developed and emerging markets. Investment bankers identify capital opportunities, negotiate and structure deals, and execute private and public financial transactions. The essential function of an investment bank is to act as an intermediary between potential investors and those who seek capital. Investors include individuals, mutual funds, municipalities, public corporations, and private institutions. Generally, capital is raised through the issuance of equity (stock), debt (bonds), or through a merger and acquisition (buying and selling part of a company). Investment bankers perform duties ranging from the preparation of disclosure documents and marketing materials for public offerings, to analyzing potential mergers and acquisitions for boards and shareholders. Investment banks offer many different practice areas that typically fall under broader classifications such as investment banking, investment management, merchant banking, finance and operations, information technology, global research, fixed income, risk management, and equities. Due to high salaries, large potential bonuses and the drama associated with the financial markets, investment banking has become increasingly popular among JDs. Generally, those with JD degrees choose positions in corporate finance, M & A, structured finance, or a more technical discipline.
Investment banking relationship:
Of course, the paper indicated that the investment banking activity affects the objectivity of research analysts by impacting the quality of their recommendations. I think that we should list different circumstances when such things occur. The most
usual circumstance is when the research analyst fears to issue a negative recommendation so as not to lose a potential investment banking contract with a firm. Another circumstance is when the investment bank department floats a company and strives to keep the closing price above the initial listing price. Any negative recommendation stemming from the research department is generally not welcome by both the issuer and the investment banker. Another circumstance is when there is a pressure from the commercial banking activity regarding research recommendations. In some countries, commercial banks are heavily dominating the investment banking activity. Regulatory bodies are often unwilling to impose clear ³firewall´ guidelines between the two activities due to the heavy lobbying power of the banks. Sometimes, the listed companies and their major shareholders are clients of the commercial bank which is reluctant to see any negative recommendation on the listed companies.
The role of the Investment Bank Investment banks provide four primary types of services: raising capital, advising in mergers and acquisitions, executing securities sales and trading, and performing general advisory services. Most of the major Wall Street firms are active in each of these categories. Smaller investment banks may specialize in two or three of these categories.
Raising Capital An investment bank can assist a firm in raising funds to achieve a variety of objectives, such as to acquire another company, reduce its debt load, expand existing operations, or for specific project financing. Capital can include some combination of debt, common equity, preferred equity, and hybrid securities such as convertible debt or debt with warrants. Although many people associate raising capital with public stock offerings, a great deal of capital is actually raised through private placements with institutions, specialized investment funds, and private individuals. The investment bank will work with the client to structure the transaction to meet specific objectives while being attractive to investors.
thereby empowering small to medium sized companies with financial and transaction experience without the addition of permanent overhead. and providing an opinion as to the fairness of a proposed transaction. structuring. placing new offerings. as well as a valuation range and recommended structure. acquisitions. the investment bank should provide a thorough analysis of the entity bought or sold. the sale of a company or a subsidiary of the company. In each case. and divestitures. allows for efficient use of client personnel. and executing a merger or joint venture. an investment bank provides objectivity. Example projects include the acquisition of a specific firm. or firms which plan to go public in the near future. and publishing research reports.Mergers and Acquisitions Investment banks often represent firms in mergers. Who needs an Investment Bank? Any firm contemplating a significant transaction can benefit from the advice of an investment bank. . A quality investment banking firm can provide the services required to initiate and execute a major transaction. and in a financial transaction may be at a disadvantage versus larger competitors. a valuable contact network. and is vitally interested in seeing the transaction close. Most small to medium sized companies do not have a large in-house staff. business valuations. General Advisory Services: Advisory services include assignments such as strategic planning. assisting in financial restructurings. Specific functions include making a market in a stock. Although large corporations often have sophisticated finance and corporate development departments. and assistance in identifying. Sales and Trading These services are primarily relevant only to publicly traded firms.
or "brokering" a transaction. accounting. preparation of relevant documentation such as an offering memorandum or presentation to the Board of Directors. and other advisors. coordinating legal. most projects will include detailed industry and financial analysis. Record of Success Although no reputable investment bank will guarantee success. for example when bidding on a company that is for sale. Experience It extremely important to make sure that experienced. Ability to Work Quickly Often. Generally only large client firms will get this type of service from the major Wall Street investment banks. such as potential investors or companies that could be approached for acquisition. The investment bank should have a wide network of relevant contacts. The investment bank must be .What to look for in an Investment Bank Investment banking is a service business. Depending on the type of transaction. it may be preferable to work with an investment bank that has some background in your specific industry segment. and generally assisting in all phases of the project to ensure successful completion. investment banking projects have very specific deadlines. and the client should expect topnotch service from the investment banking firm. the services should go well beyond simply making introductions. Some criteria to consider include: Services Offered For all functions except sales and trading. companies with less than about $100 million in revenues are better served by smaller investment banks. For example. assistance with due diligence. senior members of the investment banking firm will be active in the project on a day-to-day basis. the firm must have a demonstrated record of closing transactions. negotiating the terms of the transaction.
knowing that the transaction is being handled by individuals with experience in executing similar projects.willing and able to put the right people on the project and work diligently to meet critical deadlines. It is important to utilize a fee structure that aligns the investment bank's incentive with your own. that the project is completed in an efficient time frame. Because investment banks are intermediaries. Ongoing Support Having worked on a transaction for your company. an experienced. the investment bank will be intimately familiar with your business. and generally not providers of capital. which may be one-time or monthly. . At the same time. However. quality investment bank adds significant cant value to a transaction and can pay for its fee many times over. Fee Structure Generally. After the transaction. with the majority of the fee contingent upon successful completion of the transaction. a good investment bank should become a trusted business advisor that can be called upon informally for advice and support on an ongoing basis. the client is able to focus on running the business. The investment banker has a vested interest in making sure the transaction closes. rather than on the day-to-day details of the transaction. some executives elect to execute transactions without an investment bank in order to avoid the fees. and with terms that provide maximum value to the client. an investment bank will charge an initial retainer fee.
Sebi and RBI are now in the process of tracking fund flows from foreign institutional investors (FIIs) into stocks of companies whose net worth has eroded and also into little-known names. Unlike traditional banks. the regulator¶s antenna is up after evidence of such investment. The Sebi has alerted the RBI about the need to check if investments by FIIs into stocks of companies whose net worth has been eroded or are garnering losses is being done on behalf of local investors. Most also maintain broker/dealer operations. An individual or institution which acts as an underwriter or agent for corporations and municipalities issuing securities. a probe is underway by the RBI into the equity exposure of NonBanking Finance Companies (NBFCs). The government . This is done by outright purchase and sale of securities offered by the issuer. standby underwriting or "best efforts selling. Considering the fairly rigorous internal investment norms of most of the leading FIIs.Definition Businesses specializing in the formation of capital. Already. investment banks do not accept deposits from and provide loans to individuals. private equity placements and corporate restructuring. Also called investment banker. Investment banks also have a large role in facilitating mergers and acquisitions. according to officials. maintain markets for previously issued securities. and offer advisory services to investors. banks and co-operative banks. SEBI AND INVESTMENT BANKING THE sustained Bull Run in the Indian stock markets seems to have prompted the financial market regulators to cast the net wider to ascertain whether the overseas portfolio investment route is being used as a front by some local investors and promoters.
who are trying to bring back money into the country that was stashed away at foreign shores. FIIs had bought into the stock. there are now instances of foreign funds taking large stakes in smaller companies. the Sebi has sought clientwise trading data on penny stocks from stock exchanges. despite low liquidity in these counters. The regulator is trying to ascertain whether the prices have been artificially ramped up. However. Though any widespread manipulation is ruled out. The concern has been heightened by the fact that many FIIs invest mainly in A group stocks or in companies with a minimum market capitalizations of say $500m or so. The market regulator had also held meetings with both the BSE and the NSE and discussed surveillance issues. is the movement in penny stocks. A case in point is that of SBI Home Finance. . According to sources. This has prompted regulators to carry out a check on whether the money was being funneled back into the country by local investors by misusing the FII route. Although the housing finance regulator ² National Housing Bank ² had cancelled the licence of SBI Home Finance since it is no longer a going concern. the Sebi is also looking at companies which have seen a sharp rise in prices and stocks with high price-earning ratios. Also on the Sebi¶s scanner.and the regulators want to assess whether loans have been diverted for investment in the stock markets. There is a suspicion is that some FIIs are fronting for promoters of these companies. which are ascending marked by large volumes. There are also other companies that reported a loss and yet have takers among overseas portfolio investors. According to sources. officials fear that there could be price manipulations in some individual stocks.
85% increase in gross domestic saving as a per cent of GDP. which recorded 34% y-o-y increase in the current year so far.GROWTH OF INVESTMENT BANKING Global emerging economies are experiencing record savings at a time when the developed world has been witnessing a decline in gross domestic saving rates. much of emerging Asia¶s saving rates have been driven by increases in both household and public saving rates. Higher savings and investment rates eventually help in boosting GDP. India¶s household savings have grown considerably while China¶s growth in public savings has been significant. having a positive impact on the investment climate in countries like India and China. What¶s more. Data points to the fact that higher savings rates play a key role in boosting the investment climate in a country. Y-oy increments in aggregate savings help in providing capital to a country. For instance. This is perhaps another reason why GDP is growing faster in the emerging world than in the developed world. A clear example of it is the recent growth in non-food credit in the country. The hypothesis states . An IMF report found that a 1% increase in savings leads to a 0. UK. The majority of India¶s population is young and has a greater incentive to save compared to retired people who have a much lower incentive to save. The majority of emerging economies have higher gross domestic saving and gross capital formation rates compared with their developed counterparts. The banking sector is playing a key role in channeling household savings to investment-projects. and the EU have seen a major shift in their structure of national savings. these savings are finding their way into capital investments. This higher capital directly boosts investment activity. Countries like the US. The population demographics in India and most emerging economies is another reason for the recent trend in higher savings. On the other hand. almost two-thirds of the fall in savings rate in the developed world has been due to a fall in household and public savings. This kind of behaviour is consistent with the Modigliani life cycle hypothesis.
INVESTMENT BANKING ORGANISATION IN INDIA HSBC's origins in India date back to 1853. steadily grown in reach and service offerings. and has a lesser incentive to save. and then negative saving after retirement. when the Mercantile Bank of India was established in Mumbai. An IMF research paper found that a 1% increase in the elderly-dependency ratio in industrial countries would over time reduce savings by about 1. It is important to note that a large chunk of the population in developed countries is close to the retirement age. The Bank has since. HSBC Group entities in India · The Hong Kong and Shanghai Banking Corporation Limited (HSBC) · HSBC Asset Management (India) Private Limited · HSBC Electronic Data Processing (India) Private Limited · HSBC Insurance Brokers (India) Private Limited · HSBC Operations and Processing Enterprise (India) Private Limited · HSBC Primary Dealership (India) Private Limited · HSBC Private Equity Management (Mauritius) Limited · HSBC Professional Services (India) Private Limited · HSBC Securities and Capital Markets (India) Private Limited · HSBC Software Development (India) Private Limited Commercial Banking The Hong Kong and Shanghai Banking Corporation Limited (HSBC) . high saving at the middle and end of working life. In India.that there will be little saving in early adult life. This is proof of the role of demographics in the aggregate saving behaviour in a country.5% of GDP. the Bank offers a comprehensive suite of world-class products and services to its corporate and commercial banking clients as also to a fast growing personal banking customer base. keeping pace with the evolving banking and financial needs of its customers.
Internet banking also provides easy access to HSBC's services. together with a full range of personal and private banking products in India and overseas. Jaipur. Non Resident Indian banking HSBC's Non Resident Indian Banking (NRI) centres located in Asia-Pacific. Financial planning services Services include investment and custodian management and access to stock broking and insurance services. Bangalore. and internet banking . Customers have access to 24-hour banking services through an extensive network of automated teller machines (ATMs). transactional and deposit products. Also offered branch-wide are international Gold and Classic credit cards from VISA and MasterCard and debit cards from Visa. Corporate banking HSBC has well-established. Gurgaon. Noida. Thane. Trivandrum and Visakhapatnam. Mumbai. an integrated Call Centre. provide the international Indian Diaspora access to a range of products and services. trade facilities. Services include term and working capital finance.online@hsbc . Europe and North America. including personal lending and deposit products. New Delhi.Personal banking HSBC offers a wide range of personal financial services. Chandigarh. Kolkata. together with HSBC's offices worldwide. the Middle East. syndications. payments and cash management services and factoring. Coimbatore. Ludhiana. through its branch network in Ahmedabad. which are offered to resident as well as non-resident Indians. Business banking HSBC's Extra Mile Business Banking offers two types of account to small and . corporate deposits. Chennai. Kochi. Pune. long-term corporate banking relationships with large domestic Indian corporations and foreign multinationals operating in India. Hyderabad. These include NRI related investment (both international and domestic).
treasury and capital markets. Trade (international and domestic) and factoring services A wide range of solutions tailored to meet customer's requirements for both domestic and international businesses is offered. . Payments and cash management HSBC provides integrated domestic and regional transaction support to corporate clients through a sophisticated range of cash management solutions. insurance companies.medium-sized businesses . Institutional banking Working closely with Group offices in India and overseas. 24 hours a day. and correspondent and electronic banking activities are offered to banks. custody and clearing. Hyderabad. Services include Business Phone Banking. HSBC is also one of the leading banks involved in the bullion business through its offices in Ahmedabad.The Business Account and the BusinessVantage Account. payments and cash management. and review details of their domestic and international accounts. obtain international financial markets information. New Delhi and is supported by the Group's global expertise in the precious metal business. non-government and development organisations operating in India. asset management companies and other non-banking companies. Bangalore. from anywhere in the world. Business Doorstep Banking and Multi Branch Business Banking. the HSBC Group's dedicated electronic banking service allows users to perform financial transactions. HSBC is the leading provider of trade services in India and its trade centres are ISO 9002 certified. securities houses. Kolkata. Hexagon. financial institutions. Operations and client services are ISO 9001 certified. including collection and payment services and integration with customer back-end systems. Chennai. Treasury and capital markets Clients consistently rate HSBC's Treasury business as one of the best in India. trade services.
HSBC's custody and clearing services are available in 28 markets in Asia-Pacific and the Middle East. the Group provides: Self-service banking with over 150 in-branch and off-branch ATMs and 24-hour · Phone banking.foreign exchange. Custody and clearing The leading custodian in Asia. money market and fixed income products and derivatives in both rupees and major currencies. With experienced staff and the latest technology. HSBC clients include the domestic fund management sector in both the retail and institutional segments. HSBC's internet banking service. . serving clients in Mumbai and in the major metropolitan centres across the country. domestic and International VISA. fund administration services.Its dealing room in Mumbai is one of the largest in the country. · Trade and corporate banking services with real-time access to a centralized Information database · Instantaneous inter-city transactions through online connections between all branches · A state-of-the-art treasury dealing system · A sophisticated card system supporting debit and credit cards. provides customers with an Integrated and secure platform to access their accounts. Technology The HSBC Group develops and applies advanced technology to the efficient and convenient delivery of banking and related financial services. MasterCard. unit distribution and cash management services. Institutional Fund Services launched by the bank offers a comprehensive suite of products to domestic mutual funds and insurance companies ranging from custody. It provides a comprehensive range of products which include . HSBC is the premier provider of sub-custodian and clearing services to foreign institutional investors (FIIs) in India. and co-branded cards · A dedicated acquiring system for both MasterCard and Visa transactions · online@hsbc. In India.
it is able to deliver quality products to meet customers' investment objectives. through two centres in Mumbai and Chennai. a subsidiary of HSBC Private Equity (Asia) Limited in Hong Kong. Bangalore and Visakhapatnam provides data processing / customer service facilities for the HSBC Group's overseas operations. With the Group's global fund management expertise and investment capabilities. The company specialises in the provision of equity capital to unlisted growth . Data processing HSBC Operations and Processing Enterprise (India) Private Limited. provides operational processing services for HSBC offices in India. which will function as a direct and a reinsurance broker. through its offices in Hyderabad.· Internet Payment Gateway handles credit card transactions on the internet Asset management HSBC Asset Management (India) Private Limited offers mutual funds to its customers. Global Resourcing HSBC Electronic Data Processing (India) Private Limited. Insurance HSBC Insurance Brokers (India) Private Limited is licensed by the Insurance Regulatory Development Authority (IRDA) to operate as a composite insurance broking company. has a Liaison Office in Mumbai. Primary dealership HSBC Primary Dealership (India) Private Limited has been authorised by the Reserve Bank of India to act as a primary dealer in the government securities market. Private equity HSBC Private Equity Management (Mauritius) Limited.
the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. Asset Management. It deals in Indian securities for both Indian and international institutions and for select retail clients and is backed by an extensive research team. who has devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. Its Institutional and proprietary broking business is based in Mumbai and. Private Banking and Insurance functions. the great Hindu Jurist. with particular emphasis on the IT. The Corporate Finance and Advisory business. During the Mogul period. ROLE OF INVESTMENT BANKING Indian Banking Sector Banking in India has its origin as early as the Vedic period. Investment banking HSBC Securities and Capital Markets (India) Private Limited has two main business lines. with offices in Mumbai and New Delhi. it was the turn of the agency houses to carry on the banking business. has seats on two of India's premier stock exchanges. Treasury. Audit Service HSBC Professional Services (India) Private Limited provides internal audit services to the HSBC Group's internal audit units worldwide. It is believed that the transitions from money lending to banking must have occurred even before Manu. offers a full range of integrated investment banking services in India and internationally. the Bombay Stock Exchange and the National Stock Exchange. During the days of the East India Company. The General Bank of India .companies in India and Sri Lanka. Software development HSBC Software Development (India) Private Limited has established a software centre in Pune to develop solutions for HSBC's Group offices worldwide.
Regional Rural Banks mainly sponsored by Public Sector Banks Private Sector Banks a. the Imperial Bank of India was established on 27th January 1921. On July 19. Scheduled Co-operative Banks . Bank of India Ltd. Punjab National Bank Ltd. Old generation private banks b. State Bank of India and its associate banks called the State Bank group b.was the first Joint Stock Bank to be established in the year 1786. With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. the Bank of Bombay in 1840 and the Bank of Madras in 1843. 20 nationalized banks 18 c. the Central Bank of India Ltd. New generation private banks c. These three banks were amalgamated in 1920 and a new bank. The Reserve Bank which is the Central Bank was created in 1935 by passing Reserve Bank of India Act 1934. a number of banks with Indian management were established in the country namely. Canara Bank Ltd. Indian Bank Ltd. the Bank of Baroda Ltd. The others which followed were the Bank of Hindustan and the Bengal Bank. These three banks also known as Presidency Banks were independent units and functioned well. the Bank of Bengal in 1809. Foreign banks in India d. In the wake of the Swadeshi Movement. 14 major banks of the country were nationalized and in 15th April 1980 six more commercial private sector banks were also taken over by the government. 1969. Today the commercial banking system in India may be distinguished into: Public Sector Banks a. In the first half of the 19th century the East India Company established three banks.
Small Industries Development Bank of India (SIDBI) 6. Central Co-operative Banks 3. 7. Urban Co-operative Banks 6. Primary Agriculture Credit Societies 4. Primary Land Development Banks 8. Export Import Bank of India 9. Industrial Investment Bank of India (IIBI) 19 5. Primary Agricultural Development Banks 7. Industrial Finance Corporation of India (IFCI) 2. Land Development Banks 5. National Housing Bank TREASURY Profile India's largest bank is also home to the country's biggest and most . The co-operative banking sector in India is divided into 4 components 1.e. Industrial Credit and Investment Corporation of India (ICICI) 4. State Land Development Banks DEVELOPMENT BANKS 1. State Co-operative Banks 2. Non-scheduled Banks CO-OPERATIVE SECTOR The co-operative banking sector has been developed in the country to the supplement the village money lender. SCICI Ltd. Industrial Development Bank of India (IDBI) 3. National Bank for Agriculture and Rural Development (NABARD) 8.
SBI's relationships with over 700 correspondent banks are also leveraged in extracting maximum value from treasury operations. non-convertible debentures. backed by the assured expertise of informed professionals. preference shares. contributing to a major chunk of the total turnover in the money and forex markets. securitized paper. Through a network of state-of-the-art dealing rooms in India and abroad. the SBI extends round-the-clock support to clients in managing their forex and interest rate exposures. Products and Services Asset Liability Management (ALM): The ALM function comprises management 20 of liquidity. these include asset liability management. The TMG monitors the investment. Rupee Treasury The Rupee Treasury carries out the bank¶s rupee-based treasury functions in the domestic market. the Forex Treasury and the Treasury Management Group.powerful Treasury. investments and trading. fixed and floating rate products. Broadly. They can also be customized in terms of tenors and liquidity options. SBI's treasury operations are channeled through the Rupee Treasury. Investments: SBI offers financial support through a wide spectrum of investment products that can substitute the traditional credit avenues of a corporate like commercial papers. The Rupee Treasury also manages the bank¶s position regarding statutory requirements like the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR). . enable efficient interest risk management and optimize the cost of funds. The Rupee Treasury deals in the domestic money and debt markets while the Forex Treasury deals mainly in the local foreign exchange market. risk and asset-liability management aspects of the Bank's overseas offices. as per the norms of the Reserve Bank of India. SBI invests in primary and secondary market equity as per its own discretion. These products allow you to leverage the flexibility of financial markets. maturity profiles of assets and liabilities and interest rate risks.
both in the Interbank and Corporate Foreign Exchange markets. and deals with all the major corporates and institutions in all the financial centers in India and abroad. 21 The bank¶s team of seasoned. The FX Treasury can also structure and facilitate execution of derivatives including long term rupee-foreign currency swaps. Forex Treasury (FX) The SBI is the country¶s biggest and most important Forex Treasury. call money and other instruments. As the name . OVERSEAS TREASURY OPERATION Treasury Management Group The Treasury Management Group (TMG) is a part of the International Banking Group (IBG) and functions under the Chief General Manager (Foreign Offices). The bank¶s dealing rooms provide 24-hour trading facilities and employs state-of-the-art technology and information systems. The Rupee Treasury handles the bank¶s domestic investments. SBI is the biggest lender in call. thus providing you a dynamic substitute for traditional credit options.SBI invests in these instruments issued by your company. Trading The bank¶s trading operations are unmatched in size and value in the domestic market and cover government securities. skilled and professional dealers can tailor customized solutions that meet your specific requirements and extract maximum value out of each market situation. corporate bonds. rupee-foreign currency interest rate swaps and cross currency swaps. SBI¶s relationships with over 700 correspondent banks and institutions across the globe enhance the strength of the Forex treasury.
Portfolio Management & Custodial Services The Portfolio Management Services Section (PMS) of State bank of India has . apart from compliance with the regulatory requirements of the host country. investments and forex operations. Investment operations are conducted in accordance with the investment policy for foreign offices formulated by TMG. are (a) safety of the funds invested. Products and Services Asset Liability Management (ALM): The ALM function comprises management of liquidity. foreign currency interest rate swaps. cross currency swaps and forward rate agreements. Forex and Interest rate (Foreign Currency) derivatives: TMG also plays an important role in structuring. Reciprocal Lines: The department is also responsible for maintenance of reciprocal lines with international banks. Forex monitoring: Monitoring of forex operations of our foreign offices is done with the objective of optimising of returns while managing the attendant risks.implies the department monitors the management of treasury functions at SBI¶s foreign offices including asset liability management. The activates include appraisal of the performance of the foreign offices broad parameters such as income earned from investment operations. Investments: Monitoring of investment operations of the foreign offices of the bank is one of the principal activities of TMG. facilitating execution of foreign currency derivatives including currency options. The main objectives of investment operations at our foreign offices. marketing. composition and size of the portfolio. long term rupee . performance vis-à-vis the budgeted targets and the market value of the portfolio.foreign currency swaps. (b) optimization of profits from investment operations and (c) maintenance of liquidity. Commodity hedging is one of the recent activities taken up by TMG. maturity profiles of assets and liabilities and interest rate risks at the foreign offices.
follow and promote compliance with this Code. through the use of agents or other intermediaries. but one of the most valuable is our established and unquestioned reputation for integrity. who have the required depth of knowledge to handle large investment portfolios and address the concern of large investors. such as adherence to stated investment objectives security selection quality considerations conformity to policy constraints investment returns The team manning the PMS Section consists of highly experienced officers of State Bank of India. what is directly . All officers. its subsidiaries and its affiliates are responsible to become familiar with. PMS was set up exclusively for management of investments of Social Security funds and custody of the securities related thereto. even the most sophisticated investors are finding it difficult to address day to day investment concerns. The capabilities of the team range from Investment Management and Custody to Information Reporting. of State Bank of India. You shall comply with the spirit of these guidelines and not attempt to achieve indirectly. and all of its subsidiaries and affiliates. Escalade has adopted this Code of Business Conduct and Ethics to help ensure that it retains its integrity and merits public trust and confidence. In the increasingly complex regulatory and investment environment of today. We are judged by our conduct and we must act in a manner that merits public trust and confidence. The PMS forms part of the Treasury Dept. directors and employees of Escalade. have many important assets. and is based at Mumbai. INVESTMENT BANKERS CODE OF CONDUCT CODE OF BUSINESS CONDUCT AND ETHICS Introduction Escalade.been set up to handle investment and regulatory related concerns of Institutional investors functioning in the area of Social Security. Incorporated.
our personal values and integrity will guide us to the right decision. The quality standards established by Escalade¶s management are intended to match or exceed recognized good manufacturing practices and to comply with applicable laws and regulations. Controller and its other executive officers) should conduct themselves. is an integral part of the policies and procedures governing all of us at Escalade. seek guidance and express any concerns you may have. We encourage each employee to ask questions. Chief Financial Officer. Each employee of Escalade is responsible for maintaining the highest integrity and quality of Escalade¶s products and for reporting to your supervisor any actions that may jeopardize these standards.forbidden. You should read this Code carefully. officers and employees of Escalade (including Escalade¶s Chief Executive Officer. The Code is not intended to and does not in any way constitute an employment contract or assurance of continued employment. and does not create any rights in any director. and if you have any questions they should be directed to your supervisor. shareholder or any other person or entity. officer. its vendors or . employee. competitor. our business ethics must reflect the values and standards of conduct outlined in this Code. its customers. This Code is periodically reviewed by Escalade¶s Board of Directors. client. Quality of our Products Escalade¶s policy is to produce products of the finest quality for our customers. However. The Code is not intended to cover every applicable law or provide answers to all questions that might arise but. In most situations. and for this reason. This Code replaces any editions previously provided to you and your adherence to this Code is required to the same extent as you previously had agreed. supplier. Conflicts of Interest You have a duty of loyalty to the Company and must therefore avoid any actual or apparent conflict of interest with the Company. The Code is a general outline of the standard by which all directors. we must always keep in mind how our actions affect the credibility of our organization as a whole.
other employees and directors. A conflict situation can arise if you take action or have an interest that may make it difficult to perform your work objectively and effectively. Conflicts of interest may also arise if you or a family member receives improper personal benefits as a result of your position with Escalade.
Corporate Opportunities . You may not (a) take for yourself personally opportunities that are discovered through the use of Escalade¶s property, information or your position; (b) use Escalade¶s property, information or position for personal gain; or (c) compete with Escalade. You owe a duty to Escalade to advance the company¶s legitimate interests when the opportunity to do so arises. Without the prior approval of the President of Escalade, you are not permitted to participate with customers, competitors, or suppliers in business ventures, or, serve as a director, agent, broker or representative for them. Additionally, full time officers or executives may not serve as a director or agent for any ³for profit´ organization without the prior approval of the President of Escalade.
Gifts or Requests . Federal law makes it a criminal offense for you (1) to solicit for yourself or for a third party (other than Escalade) anything of value from anyone in return for any business, service or confidential information about Escalade or (2) to accept anything of value
(other than authorized compensation) from anyone in connection with the business of Escalade, either before or after a transaction is discussed or consummated. Any gift or gratuity from present or former customers, suppliers or shareholders should be declined to avoid any appearance of impropriety or undue influence, with the following exceptions: ordinary business meals; modest holiday gifts; gifts based upon a family relationship or close personal relationship predating your involvement with Escalade; acceptance of loans from banks or financial institutions on terms generally
available to the public at large; or acceptance of discounts or rebates on merchandise or services on terms generally available to the public at large or on terms generally available to These permissible gifts or gratuities should only be accepted when it is clear the donor is not trying to exert any influence over you in connection with a transaction involving Escalade, and the gift or gratuity is unsolicited. Generally, a gift or gratuity (or an aggregate of several gifts or gratuities) having a value greater than $100 should be rejected. Any offer or receipt of a gift, discount or rebate (or an aggregate of several of the same) of more than $100 should be promptly reported in writing to the Chief Executive Officer or Chief Financial Officer.
Investments. You should avoid any substantial investment in the business of a customer, supplier or competitor unless the security is publicly traded on a national exchange and there is no possibility for a conflict of interest. You should also avoid any investment in an initial public offering of any company if one of the underwriters or other investment banks involved in the offering is providing, has provided, or may likely provide in the future, products or services to or for Escalade. You should make personal investments with prudence and avoid situations which might influence one¶s business judgment or advice. In no event should you use confidential or propriety information or work product developed or acquired during the course of your employment as a means of making any personal gain.
Employment. For our full-time employees, outside employment is discouraged and Escalade reserves the right to prohibit full or part-time employees from engaging in outside employment where it might subject Escalade to criticism or might interfere with your employment at Escalade. Exempt salaried employees must notify the President of any outside employment in which they are presently engaged or desire to accept while employed by Escalade on a full or part-time basis. After notification, the President will
advise you if there is a potential problem.
Recommendation of Professionals or Products . When a recommendation is requested from you by customers or business partners of Escalade for their own use or by other employees, officers or directors of Escalade for use by Escalade regarding professional services such as accountants, attorneys, investment bankers, realtors or insurance agents or regarding products to be leased or purchased, you should avoid recommending someone if you or a family member receives improper personal benefits as a result of your recommendation. You should disclose any such relationships to the party requesting the recommendation and report any possible personal benefits that you or a family member may receive as a result of your recommendation to the President.
Civic and Charitable Activities . Before you become a director or trustee of an outside not-for-profit organization, you must notify the President. Volunteer work and participation in worthwhile and responsible civic and not-for-profit organizations is encouraged, provided it does not unduly interfere with your employment, pose a conflict of interest with your duties and responsibilities to Escalade or its customers or impair your ability to perform at Escalade.
Politics. You may not use company funds, goods or services as contributions to political parties, candidates or campaigns, unless specifically authorized in advance in writing by the President. Escalade understands that you may participate in political activities through contributions of your own time or money in your individual capacity. Prior approval, however, must be obtained from the President before you accept appointment or nomination to any public office or before you become a candidate for the same.
fair. rules and regulations. regulators.g. accurate. fraud or misrepresentation) or unethical means or methods when acting on behalf of Escalade. Activity or behavior which would be criminally or civilly actionable is deemed not to be in compliance. you may be called upon to provide necessary information to assure that Escalade¶s filings and public reports meet these standards. Escalade¶s senior executives should be consulted when appropriate. Rules. Depending on your position with Escalade. Company Reporting. You must conduct yourself at Escalade and all of its functions or when acting on its behalf in a manner which is in full compliance with all applicable domestic and foreign laws. ethically. competitors and others. timely and understandable. abuse of privileged or confidential information. as well as with all of Escalade¶s other policies and procedures. misrepresentation. bribery. In no case shall an employee. Regulations. It is of critical importance that Escalade¶s filings with the Securities and Exchange Commission and other regulatory agencies and authorities as well as its other public communications be full. fraudulent behavior or any other unfair dealing practice. records and accounts shall accurately and fairly reflect the transactions of Escalade in reasonable detail and in accordance with Escalade¶s accounting practices and policies. business partners. accurate answers to inquiries related to Escalade¶s filing and public disclosure requirements. officer or director use illegal (e. officers and directors to take this responsibility very seriously and to provide prompt. For example: . Compliance with Laws. employees. You may not take unfair advantage of anyone through manipulation.You should endeavor to deal honestly. fairly and in good faith with Escalade¶s customers. Escalade¶s books. concealment. shareholders. suppliers. Escalade expects employees. theft. Books and Records.
shall be made to any internal or external accountant. firms and persons from offering money or ³anything of value´ to any foreign government official for the purpose of influencing such official. The use of any funds or assets of Escalade for any unlawful or improper gifts. including the party requesting the treatment. auditor. . No payment shall be made with the intention or understanding that all or any part of it is to be used for any purpose other than that described by the documents supporting the payment. In the United States.S. nothing of value. The consequences of violating the FCPA are extremely severe. the reasons for the grant should be documented in writing in Escalade¶s records. Inc. payments to customers. Discounts. rebates. may be provided to government personnel unless clearly permitted by law and any applicable regulation. such as gifts or entertainment. credits and allowances do not constitute over billing when lawfully granted. The Foreign Corrupt Practices Act (³FCPA´) broadly prohibits U. government employees or other third parties is strictly prohibited. Consignment sales are pre-approved by the President and are not recognized as revenue until title is transferred and the right of return expires. The Escalade. Questionable or Improper Payments. ³Accounting Principles and Policies´ are to be followed. including possible civil and criminal penalties for both Escalade and individuals. written or oral. attorney or other representative with respect to preparation of Escalade¶s financial statements or documents to be filed with the Securities and Exchange Commission or other governmental authorities or regulatory bodies. rules and regulations and applicable accounting guidelines. No undisclosed or unrecorded funds or assets shall be established for any purpose unless permitted by applicable laws. 30 No false or misleading statements.No false or deliberately inaccurate entries (such as over billing) shall be made for any reason.
or any current or prospective customer or supplier for the purpose of improperly obtaining a desired government action. Loans. At all times we must remain within the limits of the FCPA. labor union. or gifts of nominal value (approximately $100 or less).. time. Protection and Proper Use of Company Assets. or any sale. a lunch. materials. hardware. Agreements between competitors relating to prices or allocations of territories or customers is unlawful. Loans may not be made to employees or directors without the approval of the Board of Directors. so-called ³facilitating payments´ made in foreign countries to low-level government employees may be permissible in certain circumstances. are valuable . Any business activities which involve any of our competitors should be conducted cautiously. no payment from Escalade¶s funds or assets shall be made to or for the benefit of a representative of any domestic or foreign government (or subdivision thereof). supplies. The only exception is that travel advances up to $1. Commercial business entertainment which is reasonable in nature. Reasonable business entertainment would cover for example.Therefore. Company assets.500. and facilities. Competition. or occasional athletic or cultural event. kickbacks or any other form of payoff. All such payments must be pre-authorized by Escaladeµs Chief Executive Officer or Chief Financial Officer. frequency and cost is permitted. Under the FCPA. contract or other commercial benefit. intellectual property. or its subsidiaries.00 may be approved by the President of Escalade. Competitive marketing and bidding activities should be fair and ethical. such as information. Inc. dinner. This prohibition applies to direct or indirect payments made through third parties and employees as well as is intended to prevent bribes. software. among other property. purchase.
or otherwise belonging to Escalade. product information. What Constitutes Confidential Information? All oral and written communications and information relating to Escalade. customer and prospect lists. You should assume that any such work product or materials are confidential information subject to the policies and restrictions on use and disclosure outlined in this Code. Confidential or proprietary information may not be disclosed to others except when disclosure is authorized by Escalade or legally required. This includes not only information you acquire from third parties but also any work product you generate as an officer. You are expected to treat the property of Escalade with care and should not remove it from company premises without a supervisor¶s approval. it remains the property of . for example. licensed. or its customers.resources owned. shareholders and other employees of Escalade. director or employee of Escalade including. and computer programs. Any work product of an employee is the property of Escalade if it is the result of work performed while at work or with company property. marketing materials. which you acquire during the scope of your employment and which is not otherwise available to the general public constitutes confidential information. business methods of processes may otherwise be available to the general public. its business partners. presentation materials. You acknowledge that while employed by Escalade all work products that you produce are and shall remain the sole and exclusive property of Escalade. What Constitutes Proprietary Information? Certain types of information may not be confidential but may still be proprietary property of Escalade. Escalade¶s property should only be used for legitimate business purposes. suppliers. Confidential and Proprietary Information You have an obligation to maintain the confidentiality of information entrusted to you by Escalade. Even though information such as customer and prospect names. suppliers. customers or others related to Escalade¶s business.
Escalade and individual employees shall have no personal rights to such information or products either during or after employment with Escalade. court order or other legal process. and you will only divulge information related to such systems or data to those having an authorized business requirement. officers and employees from engaging in insider trading and makes those persons responsible for ensuring compliance by his or her immediate family members of those same restrictions on trading. Aside from routine credit and personal inquiries. whether within or outside of Escalade. You acknowledge that Escalade¶s data processing systems and data are private and confidential. employee. You will not compromise access to such systems or data by communicating your identification and/or password to anyone. You also have an obligation to keep confidential any information acquired with respect to present. update or use of Escalade systems or data is strictly prohibited. past or prospective customers. information concerning a customer. Any such information shall be used solely for banking or corporate purposes and shall under no circumstances be revealed to unauthorized persons. Data Security. shareholder or a business transaction may be revealed only with the consent of the individual or entity involved. Furthermore. Customer/Supplier Information . shareholders and other employees of Escalade. you acknowledge your responsibility to protect the integrity of all systems and data for which you are authorized to access or update. and you may only access or update the systems and data according to the authority given you. You will report all violations or suspected violations of this policy immediately to your supervisor who then shall report same to Escalade¶s Chief Financial Officer. The company¶s insider trading policy is intended to comply with the securities . Prohibitions on Insider Trading Escalade has a written policy prohibiting directors. Any unauthorized access. suppliers. or pursuant to proper subpoena.
Escalade¶s prohibition applies to material confidential information obtained in the course of your employment and also relates to customers. Escalade¶s policy prohibits covered persons from engaging in any action to take advantage of. and Buying or selling puts or calls. PROFILE OF IDBI THE GROWTH PATH The genesis of "Industrial Development Bank of India Limited" (IDBI Ltd) can be traced to the establishment of The Industrial Development Bank of India (IDBI). Material confidential information is any nonpublic information that would be significant in making an investment decision. We also have adopted certain time periods in which no trades in Escalade securities will be permitted. the securities laws of the United States also prohibit the company¶s directors and executive officers from engaging in any of the following activities with respect to Escalade securities: ³short-swing´ trading (i. In addition to Escalade¶s insider trading policy. material confidential information. whether intentionally or inadvertently. Covered persons may not buy or sell Escalade securities while in possession of material confidential information about Escalade. or pass on to others. Escalade requires that directors. Covered persons are also responsible for the actions of any person who has received the material confidential information as a ³tip´.e. vendors and third parties with whom Escalade conducts business and/or may be considering a transaction. short sales (defined as selling non-owned shares at today¶s prices in anticipation that the stock can be purchased at a lower value in the near future). purchase and sale within any six month period). officers and employees pre-clear all trades in Escalade securities with our Chief Financial Officer.laws of the United States which prohibit those covered persons from buying or selling securities of Escalade while in possession of material confidential information relating to Escalade or from otherwise improperly using material confidential information in connection with trading in securities. .
IDBI Bank Ltd was merged into IDBI Ltd as per the scheme of amalgamation sanctioned by RBI. both in rupee and foreign currencies. for greenfield projects as also for expansion. (NSDL). in due course. The merger seeks to consolidate business across the value chain and provide economies of scale to the merged entity. The erstwhile IDBI has played a pioneering role in fulfilling its mission of promoting industrial growth through financing of medium and long-term projects. in consonance with national plans and priorities. covering almost the entire spectrum of industrial activities. modernisation and diversification purposes. Banking Business IDBI Ltd entered commercial banking with the incorporation of IDBI Bank Ltd as a its subsidiary. Promoter of Large Institutions IDBI Ltd. both within the geographical boundaries of India and. Stock Holding Corporation of India 36 (SHCIL). enabling it to offer an array of customer friendly services to its existing and prospective clients. etc.its predecessor entity. IDBI is a strategic investor in a plethora of institutions. abroad. diversified and efficient industrial and institutional structure but also has added a qualitative dimension to the process of industrial development in the country. the tenth largest development bank in the world is a board± managed institution and has promoted world class institutions in India. IDBI has enlarged its basket of products and services to industrial concerns. 2005. in 1964. Over the years. A few of such institutions built by IDBI are The National Stock Exchange (NSE). On April 2. IDBI has been instrumental not only in establishing a well-developed. by an Act of Parliament to provide credit and other facilities for the development of Indian industry. . which have revolutionized the Indian financial markets. IDBI and its successor entity IDBI Ltd provides financial assistance. The National Securities Depository Services Ltd. including manufacturing and services.
India's first universal bank and a leading financial supermarket. In the 1990s. ICICI Bank is currently active in the areas of corporate finance. In April 2002. retail and personal banking. ICICI Bank¶s long-term foreign currency debt is rated one notch higher than the sovereign rating for India by Moody¶s. corporate finance and investor services with the . innovation. With cutting edge relevant technology. with total assets of over Rs. Now. aggressive marketing. directly and through a network of subsidiaries and affiliates. significant benefits are expected to accrue from the merger.Future Promise Going forward. as a single entity. commercial banking. the international rating agency. the bank is all set to emerge as a model global corporate citizen in the days ahead ACTIVITIES OF INVESTMENT BANKING IN IDBI ICICI Bank is India's largest private sector bank and the second largest bank in the country. IDBI Ltd looks confidently into the future to face and thrive in the intense competitive environment that is emerging. providing innovative financial and banking solutions for corporates and individuals. The bank has now gained experience and has in place the strategies required for gaining a leadership position. ICICI Bank's equity shares are listed at various stock exchanges in India and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI transformed into a diversified financial services group offering a wide variety of products and services. ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. tight control over costs and with its motivated workforce. ICICI Bank was originally promoted in 1994 as the banking arm of ICICI Limited (ICICI). IDBI Ltd seeks to emerge as a top-drawer commercial bank. ICICI Group announced a synergistic merger of itself and two of its retail finance subsidiaries with ICICI Bank to create the new ICICI Bank . an Indian development financial institution set up in 1955. In 1999. Capitalising on its intimate knowledge of Indian industry and client requirements and a large retail base. 1 trillion.
healthcare and micro-finance. NSE enables shorter settlement cycles and book entry settlements systems. The ICICI Group is committed to the communities in which it operates and supports a diverse range of social projects in the areas of primary education. by ensuring equal access to investors all over the country through an appropriate communication network. efficient and transparent securities market to investors using electronic trading systems. 170 ATMs and robust Internet Banking and Phone Banking channels. investment banking and venture capital being performed by associate companies. ICICI Bank has been following a multi-channel multiproduct retail strategy. . speed & efficiency. debt instruments and hybrids. The National Stock Exchange is India's leading stock exchange covering 350 cities and towns across the country. asset management. market practices and trading volumes. and meeting the current international standards of securities markets. car loans and consumer loans. credit and debit cards. safety and market integrity. NSE provides a modern. With a network of about 450 bank branches. It pioneered Internet banking in India and today has more than a million retail customer accounts on the net. It has set up facilities that serve as a model for the securities industry in terms of systems. practices and procedures. A recent entrant in the area of retail assets including mortgages. fully automated screenbased trading system with national reach. The Exchange has brought about unparalleled transparency. which enables it to access and service an ever-growing number of customers. It also provides a fair. ICICI Bank is also India¶s foremost technology bank. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure. ICICI Bank is well positioned to service its discerning customer base and provide them complete financial fulfillment.specialized activities of insurance. with the objective of establishing a nation-wide trading facility for equities. National Stock Exchange National Stock Exchange (NSE) was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 . ICICI Bank has quickly acquired market leadership in most of these markets.
operational under one roof to support the NSE applications.Band VSAT network in the world. CRISIL offers a comprehensive range of integrated product and service offerings . take informed investment decisions and develop workable solutions. policy makers de-risk their business and financial decision making. Credit Rating Information Service of India Limited CRISIL Limited (formerly The Credit Rating Information Services of India Limited) was incorporated in 1987. 2003. Today it supports more than 3000 VSATs and is expected to grow to more than 4000 VSATs in the next year. measure and calibrate myriad risks .network is the largest private wide area network in the country and the first extended C. it has rated more than 4.440.NSE is one of the first de-mutualised stock exchanges in the country.real time news. responsiveness of the process and large scale dissemination of opinion pieces. Till March 31. and expert advice . operational.to enable investors. where the ownership and management of the Exchange is completely divorced from the right to trade on it.financial and credit risks. NSE is one of the largest interactive VSAT based stock exchanges in the world. issuers. CRISIL helps to precisely understand. CRISIL Ratings continues to play a stellar role in the development of the debt markets in India. Combining analytical excellence with strong sector knowledge and in-depth understanding of the local environment. Currently more than 9000 users are trading on the real time-online NSE application. price and market risks. incisive insights and opinion. strategic and regulatory risks. The NSE. CRISIL is the only rating agency to operate on the basis of a sectoral specialization which underpins the sharpness of analysis. analysed data. There are over 15 large computer systems which include non-stop fault-tolerant computers and high end UNIX servers. This coupled with the nation wide VSAT network makes NSE the country's largest Information Technology user. for more than 2000 companies.400 debt instruments worth over Rs.000 crores. CRISIL's Advisory businesses provide a range of policy and transaction level advice to governments and leading organizations across . exchange and liquidity risks.
As regards the settlement of claims LIC has touched the lowest outstanding claim ration at 0.23% during 2002-03 which matches with the performance of any such insurance company in the world. Research & Information. Analyzed Data. Life Insurance Corporation of India Act. the Corporation has widened its reach by providing insurance cover under 2. CRISIL is the most comprehensive.87 crore.00% on Sum Assured and 24. 1956. LIC has been actively involving itself in the promotion of new development financing institutions in collaboration with other institutions. For the year 2002-2003. Life Insurance Corporation of India An Act of Parliament. and by providing resources for economic development. It took over 244 private life insurance business companies then existing.9. . It is a wholly government owned organization with an initial capital of Rs.sectors.45.60 lakh coupled with appointment of over 110 Corporate Agencies has contributed to the growth in the number of policies.41% on Premium Income over the period of last two years.048 branches and over 9. registering the annualized growth of 10. 20. SIDBI. It provides resource support to other institutions by subscribing to their initial and subsequent offers of shares and debentures. It has subscribed to shares and bonds of IDBI.79.60 lakh agents coupled with the appointment of 110 Corporate Agencies. LIC is the largest life insurer in the country. Analytical Tools & Benchmarks.75% on policies. Its main asset is its staff strength of 1. For the same period. IFCI.5 Crores contributed by the GOI. ICICI.683 crore and Premium Income of Rs. the growth in the number of Agents from 7. established Life Insurance Corporation of India (LIC).29. Woven around its various subsidiaries and aiding clients to anticipate and negotiate economic and financial change for sustainable strategies. IRBI. CRISIL's information services business encompasses News.946 policies with a Sum Assured of Rs.92 lakh to over 9.688.1. Its mission is to ensure and enhance the quality of life of people through financial security by providing Life Insurance products and services of high quality. independent research & information services provider in India.24 lakh employees and 2.
industrial finance. Punjab National Bank Established in 1895 at Lahore. agricultural finance. then undivided India. The large presence and vast resource base have helped the bank to build strong links with trade and industry. THE CONCEPT OF INVESTMENT AND MERCHANT BANKING According to Anthony Sampson ³There are two types of bankers who can sometimes be distinguished by their look and the pace of their walk´ · The men from deposit banks. etc. Punjab National Bank (PNB) has the distinction of being the first Indian bank to have been started solely with Indian capital. enhances its capabilities to handle transactions worldwide. PNB offers a wide variety of banking services which include corporate and personal banking.EXIM BANK. commercial bankers or clearers are responsible for millions of bank account in hundreds of branches and they have to look very dependable. the bank has grown in size and stature to become a frontline banking institution in India at present. Strong correspondent banking relationship. With its presence virtually in all the important centers of the country. It has more than 4000 branches and over 400 extension counters. NHB. At the same time. The bank was nationalized in July 1969 along with 13 other banks. financing of trade and international banking. REC. which it maintains with over 200 leading international banks all over the world. . From its modest beginning. More than 50 renowned international banks maintain their Rupee Accounts with PNB. the bank has been conscious of its social responsibilities by financing agriculture and allied activities and small-scale industries. The bank is committed to maintaining the highest standards of service and will be covering more offices under this quality movement titled µAlliance with Quality¶.
Milan. financed a miscellany of overseas commercial ventures. London and Geneva). enjoyed the confidence of large entrepreneurs and commanded the machinery to serve them efficiently. describes what in the United States is referred to as an investment bank to distinguish it from a commercial bank. Rome. which do not involve the small saver. can justify the fee. Its antecedents in Europe. and consequently they are allowed to look more aggressive. from about the fifteenth century on. with a half-dozen offices outside Italy. and provided its many clients with most of the foreign exchange. which then added banking services. A merchant bank specializes in such corporate financing needs as underwriting stocks and bonds. The original merchant banks began as commercial trading companies. Europe¶s great merchant bankers with branches and agents in distant cities such as Medici. They have greater freedom and enterprise. Therefore an investment banker¶s key problem is whether the advice. In the 19th century. silks. originally a British term. were the initial providers of international banking services before commercial banks entered the field. However. The growth of commerce both in scope and volume made international traders increasingly dependent upon the safe and efficient transfer of funds from one principality and kingdom to another. particularly and even in the 1930¶s the larger merchant . banking and credit facilities they required. handling mergers and acquisition and underwriting a range of other financial advisory services. invested in and supervised a variety of domestic industries. 44 Giovanni Medici (1360-1429) headed an international trading and banking company that dealt in woolens. furs and leather. Avignon. (headquarters in Florence and branches in Venice. which he is giving. DEFINITION AND BRIEF HISTORY Merchant bank. this distinction is becoming more blurred in recent times.· The investment bankers (or merchant bankers) make deals between rich individuals or companies. Bruges. Investment banks from fees. Commercial banks have made most of their profit from interest.
the scale and the volume of transactions. Austria. Thus the rapid rise in international investment banking activities represents a resumption of development in the early 19th century. In recent years. banquets de affaires and universal banks and from Japan as long-term credit banks.bankers had influence and power on a scale unknown today for companies and governments. and the vast array of products now available are far beyond anything our financial forefathers could have imagined has grown and become institutionalized. Australia and the United States. Chile. and baring brothers´. the speed at which they are conducted. They come from America as commercial and investment banks from Europe as merchant banks. Within the US some investment and commercial banks used the name merchant banks as a public relations cachet endeavoring to tap the glamorous associations of this term. There the various types of banks compete in Eurobond and equity securities and investments of all types. Many of the international services that were unique to the merchant banks are now done by commercial banks so that today¶s merchant banks are focused on providing investment-banking expertise that supplements the lending and operational capabilities of the commercial banks. Canada. The world beyond one¶s own borders is often referred to in financial partancea as ³offshore´ where home country regulations do not apply. The French prime ministry in 1818 would say of one of them. Though in some countries (e. argentine. The great players are no longer small privates banking houses but substantial financial institutions whose activities span the globe. USA and Japan) there are regulations that require separation between deposits taking and loan making on one hand and securities underwriting and trading on the other such regulation do not apply beyond the borders of the countries involved.g. ³There are six great powers in Europe. barings war the agent bank for Russia. Russia. internationally and domestically. the volume of offshore bond and equity financing involving . Norway. trust banks and securities firms. However. France. Austria. city banks. Prussia. England. it is a virtually ³stateless´ world. For regulatory purposes. By the time of the American civil war.
highly competitive and risky. barriers to cross-border financial transactions have declined to almost nothing. In the case of major industries countries. complex. Prodigious improvements in telecommunication have made it possible for markets to become integrated. particularly the international market in which traditional regulatory orderliness does not apply. The international securities business has become large. INVESTMENT BANKING IN JAPAN During the American occupation of Japan following World War II. The 1980¶s and the 1990¶s have been times of great competitive and strategic repositioning by the world¶s major financial institutions and provides of financial services of all types. At the same time the equivalent of the US Glass-Steagall legislation was inserted into the Japanese securities and Exchange Act of 1948 as Article 65.transactions between national markets has grown very rapidly: linkages between these markets have increased to an extent that conditions in one market affect those in others. London and Tokyo and trading between these markets in almost instruments goes round the clock. foreign exchange and commodities are centered in New York. In order to survive today¶s players must continue to adapt to changes in the market place. leading us to conceive of world financial markets as having become ³globalize´. diverse. Accordingly Japanese commercial banking has since been separate from investment banking. Deregulation of the financial services sector in many countries has led to increased competition and exposure to international markets. These developments have greatly expanded the gange of alternatives to those from all over the industrial world who seek to raise money or invest it. Major markets for securities. the occupation authorities under Generation Douglas Mac Arthur affected a number of major reforms to the structure of Japanese industry. which is conducted exclusively by . The lager industrial and financial holding companies called Zaibatsu were broken up in the interest of restricting anticompetitive and politically powerful monopolies.
securities firms. These were dominated in Japan by four large retail brokerage houses Normura. Between them the ³big four´ as they are known accounted for approximately 4opercent of commissions earned and an even higher percentage of underwriting manager ships. Much of this. The firms had been associated with Zaibatsu before the war but were later restructured as independent companies. From 1999 brokers will be free to set commissions on all equity trades as they see fit. Nikko and Yamaichi. However the administrative jurisdiction of the ministry of finance does apply and the activities of banks and securities firms. they will be required only to ³register´. Daiwa. Big Bang (June 1997) Since the second world. The securities firms have grown more rapidly than banks. does not apply outside Japan. Article 65. Yamaichi has since collapsed in November 1997. Many new financial services have been introduced in Japan over the past few years and the banks and securities firms have fought over who should have right to which businesses. . which has also been subject to controversy and challenge. On 13th June 1997 the finance ministry announced the blueprint for its much-heralded financial deregulation. Many foreign banks already been able to bypass restrictions preventing them from participating in the securities business in Japan and this has put further pressure on the Japanese government to provide similar advantages for their own banks by amending Article 65. though liberalized greatly. Foreign banks are expected to be big winners from the reforms because of their greater adaptability and experience of other deregulated markets. Banks and securities firm will no longer have to be licensed by the ministry of finance. From April 1999 banks will be able to sell investment trusts (Japan¶s version of mutual funds). are still subject to strict regulation. like the US Glass-Steagall legislation. commission on share trading has been mostly deregulated. for example banks cannot trade in equities or offer insurance. Japan¶s Big Bang. with the exception of insurance is about to change. Japan¶s financial system has been segmented. It is generally assumed that the amendment or abolition of the Glass-Steagall Act will result in a similar change in Japan¶s Article 65. From April 1998.
if they wished. Banks have been evolving into financial conglomerates either by purchasing other institutions or by setting up their own subsidiaries. Previous stock Exchange rules had permitted the exchange to consider itself a closed shop. negotiated commissions rates were to be required. however. The Big-Bang (October 1986) The UK financial market underwent the most dramatic single restructuring of any of the major capital markets in October 1986 with the passing of the financial services Act.MERCHANT BANKING IN THE UNITED KINGDOM Unlike legal divisions existing in USA and Japan where commercial banks are not permitted to underwrite corporate securities. foreign and other non-member securities firms could join the exchanges and compete for business against the British firms. Foreign and domestic banks have purchased stockbrokers and jobbers and obtained licenses as primary dealers in gilt. the Big Bang required that the entire London Stock Exchange system of dealing in debt and equity securities be scrapped and rebuilt. The changes that ensured came to be known as the ³Big Bang´. second. Members could now act in a ³dual capacity´. although commercial banks have setup their own merchant banking subsidiaries. 1975. When negotiated brokerage commissions were introduced on the New York Stock Exchange on May 1. Unlike Mayday. brokers and jobbers or markets-makers would no longer be restricted to performing only their respective functions that is acting in a ³single capacity´. as both brokers and jobbers. Many foreign banks set up subsidiaries to underwrite and trade Eurobonds. the rule changes was forced by a threat of an antitrust action against the stock Exchange by the government. the division between clearing banks and merchant banks in the UK has been by custom rather than law. Third. . As in the case of ³Mayday´ in the United States. First.
Australia. when planning a debt financing the choice is no longer between the bond market and a bank loan. have acquired securities expertise. stock jobbers. For example. Home country clients. in particularly. The clearing banks. Most of these are well integrated with their domestic markets equivalent. Explosions similar to Big Bang have been heard around the world. (1) the division between home country clients and foreign clients and (2) the traditional division between services to those requiring access to capital and those requiring investments for capital. Europe and Japan have all seen a proliferation of financial services.Not only did the Act alter the whole aspect of the stock exchange and gilt markets but it also had a significant impact on the regulation of the Eurobond market of which London had become the center. and France and to some degree in Germany and Switzerland. Merchant banks have purchased stockbrokers and jobbers but remain smaller specialized investment banking institutions. it is between several capital market alternatives in the home market and several additional alternatives from the international and foreign markets. INTERNATIONAL INVESTMENT BANKING SERVICES There are now a broad range of international investment banking products and services. merchant banking and broking community has been to create financial conglomerates along the lines of universal banks seen as an essential development in order to compete in all areas of financial service and advice. financing in another currency swapped into the home . competition among the various institutions is intense. However. it is helpful to make two distinction. from the US. as financial markets were deregulation in the middle 1980s in Canada. which has considerably widened the range of alternatives available to them. These latter alternatives include straight debt financing in one¶s own currency. investment managers and merchant banks. Its effect on the structure of the commercial banking. With international banks from all over the world present or expanding their activities in London. either internally or through the purchase of existing stockbrokers.
require the same type of support services that they do when investing domestically. Many investment bankers believe they must maintain a first rate capital market team capable of offering a fully internationalized array of financing alternatives to avoid losing their traditional home country clients. in fact. Bond issues can be sold with detachable warrants that provide for the purchase by the holder of other securities of the issuer. It has. In any case. No longer must an issuer be a larger. The same has been true of investor clients who. at a fixed price. particularly private pension funds have expanded their international investments enormously in recent years. So many alternatives backed by so much competitive energy has resulted in a great deal of international financing being complete in recent years particularly in the Euro securities markets. Investment research and a willingness to make secondary market in issues are the most important of these.country currency or floating rate financing converted into fixed-rate financing by means of an interest rate swap. Institutional investors. As bankers regard non-domestic country clients they think in terms of three types of services (1) executing transactions in the banks home country for the foreignbased . The range of issuer whose securities are acceptable to the international markets has also expanded greatly since 1980. as clients have been drawn to tempting offerings of a globalised market place those bankers who have missed leading them there have been forced to follow along. become equally important for both defensive and opportunistic reasons for firms that offer services to investors to internationalise their business as well. well-known corporation to be able to launch a euro-bond offering. having discovered international portfolio diversification. Other. either additional debt securities or equity securities. many alternatives and ideas are provided to all sorts of potential issuers by aggressive opportunistic bankers. therefore. with fewer traditional clients sees opportunities for themselves in the situation.
France and Switzerland. Home country international services are the easiest to provide and probably the most profitable for investment banks. In British. British merchant banks have also provided foreign clients with British banking. The most difficult international securities services for a firm to offer successfully are those to be executed in national markets of foreign countries. In Japan. Also the arrangement of euro-market transactions for foreign clients has become quite common. Originally there was a significant competitive advantage associated with the arrangement of issues denominated in the bankers own home currency. Recent deregulation of securities markets in Canada and . The competitive field is smaller and the firm¶s domestic reputation is perhaps the most important factor in the awarding of the business to the bankers. eurodollar issues associated with US firms. euro-yen with Japanese and so on. The execution of services in third countries particularly the Euro markets is an important part of the international business of all investment bankers. money management and underwriting services for many years. Wellentrenched. The European banks permitted to perform investment-banking services in the US have not achieved a significant market share. particularly in the U. although the demand for Bull dog bonds and other strictly British services has been modest. where Big Bang weakened the hold of British firms a much greater opportunity to offer new and competitive products and services to clients in the UK.. freer and more intense competition has resulted. These services have been performed in one form or another for many years. Though this remains true on the whole. (2) executing transactions in third countries for them and (3) executing transactions in the foreign clients own national market. The markets have become exceedingly competitive and participants now quote activity in all major currencies. effective national competition is difficult to dislodge. however. corporate finance.clients. In the level playing field of the euro-market. anything goes.S. foreign competitors have faced much the same story. Germany. euro-Canadian Dollar issues with Canadian firms. these divisions are much less adhered to today.
are considerable. a reluctant seller or a willing target. The evolving environment will have more of the US characterized by a profitable internationalized M & A business. The European and Japanese environments have lacked the free wheeling capital markets and strict legal framework that have fostered the US. Banks with a strong local M & A team and an international preserve ± primarily US investment houses ± have well positioned to take advantage of this aspect of globalisation. A bond or equity issue requires the bank¶s underwriting Commitment and exposes it to the market risk. As an activity generating substantial fees but requiring no direct commitment of the banks capital.A loan involves a commitment of bank¶s capital and often the risk Of non-repayment. And the fees commensurate with the added Value of the services. homogenisation of environment will be approached. For the us and UK investment banks. As globalisation continues however.Australia may have a similar effect on foreign competition in those markets in the future. M & A business and related advisory work are irresistible to . as a result of putting the firm¶s skills and knowledge to work . M 7 A business. Few sources of revenue are more attractive to investment and all other types of bankers than merger and other high-value-added fees. tapping the international market for better terms than can be accessed domestically is often advisable and sometimes imperative in today¶s business environment.not as a result of Committing the firm¶s capital. providing international advisory services Has been a natural extension of providing the same services domestically. But advisory fees are earned exclusively. Whether the client is a buyer. Mergers and acquisitions advisory services In addition to raising capital for corporations through the issuance of debt or equity securities or bank loans corporate financial services include the giving of advice on a variety of complex matters that a corporation must deal with in order to evaluate or accomplish a particular transaction. A swap involves booking a Contingent liability or asset.
One must control the team without stifling it. America¶s eighth-largest ³A global financial services provider with a translatic platform´. Managing the M & A department is highly challenging. HEAVY WEIGHTS IN INVESTMENT BANKING The upsurge in the urge to merge among banks and other financial services firms in recent times. The hectic merger activity among banks has altered the invesment banking . America¶s second-bigger bank and travelers group. At the end of 1997 four American houses ± (i) Merrill Lynch. (iii) the recently merged Salomon smith. Lehman Brothers. Credit Suisse and First Boston (the investment banking division of credit Suisse) and J. Discover. (iv) and Morgan Stanley.many. (ii) Goldman Sachs. Union Bank of Switzerland. Dresdner Kleinwort Benson and ING Barings. Then came a queue of smaller banks with big ambitions ±wall street firms such as bear stearns and Donaldson Luffein and Jenrette.P. plus the investment ± banking divisions of European commercial banks such as Duetsche Morgan Grenfell. All demand skills specific to the M & A Business increasingly projected into an international dimension. a securities brokerage and credit-card group. Bankers trust bought Alex Brown a rival American house. Dean Witer. expertise and global reach to make a fortune selling investment banking service to the world¶s savers and multinational companies. Banks have been scrambling for partners that can add to their size and reach. Duetsche Bank announced that it was to create the world¶s biggest bank by buying bankers trust. Morgan Stanley announced its merger with Dean Witter. is actuated by a titanic struggle to join a handful of houses with the size.Morgan. four others were jostling for position. Barney. The merger between Swiss Bank corporation and union bank of Switzerland in july 1998 to form UBS-AG created the world¶s biggest financial institution with end1997 assets of US$ 699 billion. with assets of US$ 698 billion. which streches from property insurance to mutual funds to create citigroup. In November 1998. new comers should be warned that M & A activities may not co-exist easily with relationship banking in the same firm. However. That ranking was challenged in October 1998 by the merger of Citibank.
Societe Generale 10. at the end of 1998. The top 20 investment banks increased their share of global capital markets business from 80 percent in 1990 to 97 percent in 1998. Commerzbank 12. 1. Goldman Sachs 5. Natwest Group 9. This ranking is sure to be reshuffled after the integration of Duetsche Bank and Bankers Trust slated for completion by the end of the second quarter of 1999 and the agreed all-share bid made by Societe Generale for Paribas on 1 st February 1999 to create SG Paribas. Lehman Brother¶s 8.Morgan 3.3. the investment banking arm of Travelers merged with Citibank). Bankers Trust Alex Brown 13. Warburg Dillion Read (the investment banking arm of UBS the sum of two big Swiss banks-union bank of Switzerland and Swiss Bank corporatio 2. at the start of the decade to almost $ 4000 bn. 4. . The growing concentration of market share in the hands of the top banks has coincided with an explosion in the global capital market during the 1990¶s from total volume of less than $1500 bn. J.99) the world¶s leading 10 investment banks have almost doubled their share of fee-based and advisory business in the global capital market since 1990. Credit Suisse First Boston 6.landscape. HSBC 7. Bank of America 11.P. According to Euromoney the following was the ranking of investment banking houses in January 1999 on the basis of their market share of underwriting trading and advising business. they now have 77 percent of the market. Citigroup (includes Saloman Smith Barney. in terms of assets. Royal Bank of Canada According to the financial Times (1. second only to UBS in Europe.
It has also forced up their staff costs as the new entrants compete to hire expensive talents. . increasingly over networked computers.Over the past 15 years. Investment banks once made easy money as middleman. their margins and return on capital have sunk. The above theory however needs to be set beside a disconcerting fact. supply and price of capital moves freely around the world.PROFITABILITY OF INVESTMENT BANKING In theory a glittering prize awaits the victors of this contest.Electronic brokers match up investors¶ sales and purchases off-exchange. Yet over the same period. Against this background. Each of the three main bits of the global investment banking business ±underwriting and selling shares and bonds to investors who wants to buy and sell them and selling all manner of advice to big companies and government ±seems destined to become one of the great growth industries of the next century. and then report their transaction to an exchange once they are completed. the commissions investment banks earn by organizing share trades have fallen swiftly by about 40% in USA and UK over the past ten years. That service was useful in a world of poor communication. Computers themselves are becoming ever better at bringing together buyers and sellers and matching their trades automatically. This extra competition has not only squeezed the fees investment banks can charge. Increasingly big investors are finding ways of avoiding investment bankers commissions¶ altogether . scarce information and inefficient capital markets. investment banks have been blessed with near-ideal operating conditions. Today information about the demand. Bondtrading commissions have fallen by 25-50% depending on the currency. They range from the British and the American firms that bought Britian¶s stock brokers and merchant banks in the 1980¶s to the continental European and American banks that are buying or building investment ±banking divisions today. Margins have also come under pressure because wave after wave of commercial banks have tried to muscle into investment banking. they matched buyers with sellers and charged a big fee for their efforts.
As these partnerships were replaced by bettercapitalised publicly owned firms. More competition. Managers were responsible for ensuring the safety of their shareholders money. With fewer competitors and higher barriers to entry investment banks might be able to pay their staff less and wring better fees out of their customers. none of this fits well with the notion that global investment banking is heading assuredly towards everlasting sunshine. The big companies and fund managers that make up the investment banker¶s customers are becoming more powerful. Investment banking has become more and more capital intensive since 1980. more risk. not their own. this incentive weakened. has become the one constant of the financial services industry. the bypassing of middleman. Witness the hefty losses incurred by international banks in recent years. Partners had a sharp incentive to control their traders because their own money was at risk in the markets. high barriers to entry ± margins would not necessarily get much fatter. more capital. that incentive is weaker still. and the board to shareholders. Further consolidation might help. They are demanding more and more from investment bankers for less and less money. Fund ± management firms used to be excellent customers relying on investment banks to buy and sell the shares and bonds they invest in and supply research on their investments. Shareholders have every reason to worry about the traders gambling their money at the end of this line of command. In the early 1980¶s the typical wall street or city firms would have been a Partnership. But today¶s fund managers are huge and many have invested in their own analysis and traders. Even if the industry did reach some steady state ± a handful of dominant global firms. which the securities industry Association labels ³large investment banks´ has grown by more than 1000%. managers to the group¶s board . In today¶s financial conglomerates. the equity capital of the nine American firms. Disintermediation. traders answer to managers. sophisticated and demanding as their own industries consolidate.Investment banks must also live with more powerful customers. .
it constitutes the biggest borrower of this market.ROLE OF MERCHANT BANKING AND INVESTMENT BANKING Indian money market I] Introduction to Money Market The money market is a wholesale debt market for low-risk. they do have a significant impact . banks and financial institutions. the role and the level of participation by each type of player differs greatly. This market is dominated mostly by government. It is a formal financial market that deals with short-term fund management. highly ± liquid. Funds are available in this market for periods ranging from a single day upto a year. However. In order to promote certain prudential norms for healthy banking practices. Apart from functioning as a merchant banker to the government. short term instruments. financial institutions also undertake lending and borrowing of short-term funds. Government Securities or G-Secs and Treasury-Bills or T-Bills are securities issued by RBI on behalf of the Government of India to meet the latter¶s borrowing for financing fiscal deficit. the central bank also dons upon itself the role of a regulator of the money market and issues guidelines to govern the money market operations. banks are not allowed to use the entire amount for extending credit. Yet another dominant player in the money market is the banking industry. Moreover. Government is an active player in the money market and in most economies. most of the developed economies require all banks to maintain minimum liquid and cash reserves. If banks fall short of these statutory reserve requirements. banks are required to ensure that these reserve requirements are met before directing on their credit plans. Due to the large volumes these FIs transact in. Banks mobilize deposits and utilize the same for credit accommodation. Though there are a few types of players in money market. As such. they can raise the same from the money market since it is a short-term deficit. Both.
As such.000/. they are highly marketable. . Being risk free securities. the instruments used in it represent short-term claims. For instance. a. assured returns. Treasury Bills: b. eligibility for statutory requirements. T-Bills and Government dated securities are all issued by the RBI on behalf of the government. Thus.on the money market.and in multiples of Rs. Being issued by the government they are considered to be risk free as they are issued by the Government. The T-Bills are issued for a minimum amount of Rs. Investors prefer treasury bills because of high liquidity. It is important to note that the money market instruments do not include any equities. However. Foreign institutional investors (FIIs) etc also transact in money market. no capital depreciation etc. securities issued by banking sector and securities issued by private sector. money market also involves transfer of funds in exchange of financial assets and due to the nature of the money market. Government Securities:All funds raised by the government from the money market are through the issue of securities by the RBI. Corporates also transact in the money market mostly to raise short-term funds for meeting their working capital requirements. the level of participation of the FIIs in the Indian money market is restricted to investment in government securities only. Money Market Instruments: Just as any other financial market. 25. Money market instruments mainly include Government securities. the level of participation of these players varies largely depending on the regulations. no default risk. Other institutional players like mutual funds (MFS). A brief discussion of various money market instruments has been given below: - A. they set the benchmark for the interest rates of the other money market instruments. Investors in T-Bills generally include banks and other institutional investors.
Though the yield on treasury bills are less when compared to other money market instruments. Banking Sector Securities:The transactions taking place in these securities are large in size. The chief characteristics of the money market instruments other than enabling short term fund management. a. is to provide liquidity. being government securities these dated securities have fairly high liquidity and hence form part of the money market. A.25.e. High rates indicate the tightness of liquidity in the financial system while .000. The interests paid on call loans are known as the call rates. Inspite of being long term instruments. often from hour-to-hour. These securities carry a coupon rate and are not issued at a discount.. other institutional investors and individuals. the risk adverse investors and banks prefer to invest in these securities. The maturity period of call loans vary from 1 to 14 days. At present. T-Bills are issued at a discount and redeemed at par. These rates vary from day-to-day and within the day. These are medium to long term government securities. the Government of India (GOI) issues 4 types of T-Bills i. The call money market is a part of the money market where. The money that is lent for one day in call money market is also known as µovernight money¶. Thus. the call money market is most liquid of all short-term money market segments. both in terms of amount involved in the transaction and volumes traded. Moreover. these government securities form a part of the money market due to their liquidity. 91 day. The short-term requirements of banks vary from a single day up to a year for meeting the reserve requirements and credit accommodation purposes. mostly of banks. 14 day. It also set a benchmark for the long-term interest rates. day to day surplus funds. Moreover. Government dated Securities:Investors mainly include banks. RBI raise funds on behalf of the Government of India by acting as an issuing agent to meet the latter¶s short-term funds requirement. FIs. c. are traded. The call rate is expected to freely reflect the daytoday lack of funds. Call and Notice Money: b. 182 day and 364 day.
the borrower will have to repay the funds within the given time.low rates indicate an easy liquidity position in the market. IDBI. the deposits mobilized are deployed by the bank at a longer maturity to earn more returns and duration of withdrawal of deposits by customers vary. On receipt of this notice. immediately after the date of issue and can be traded in secondary market from the date of issue. Term Money:d. Due to their negotiable nature. EXIM Bank. Certificate of Deposits (CDs) Certificate of Deposits (CDs) are issued by banks in the form of usance promissory notes. IIB. The lender will simply issue a notice to the borrower 2-3 days before the funds are to be repaid. Thus. these are also known as negotiable certificate of Deposits (NCDs) CDs are issued by commercial banks and six financial institutions ± IFCI. ICICI. e. funds lent in the notice money market do not have a specified repayment date when the deal is entered. SIDBI etc. CDs are issued at a discount to face value. Banks access this term money route for the purpose of bringing greater stability to their shortterm deficits. In India. CDs are freely transferable by endorsement and delivery. the banks borrow from call money markets to meet short-term maturity mismatches. call money is lent mainly to even out the short-term mismatches of assets and liabilities and to meet CRR requirement of banks. the banks borrow from call money market to meet the cash Reserve Ratio (CRR) requirements that they should maintain with RBI every fortnight and is computed as a percentage of Net Demand and Time liabilities (NDTL). c. On the other hand. The discount rate is freely determined by the issuing bank considering the prevailing call money rates. CDs are considered as virtually riskless instruments as the default risk is almost nil and investors are sure of receiving the invested amount with interest. Moreover. treasury bills rate. The short-term mismatches arise due to variation in maturities ie. maturity of . The money that is lent for more than 14 days is referred to as µTerm Money¶. unlike conventional deposits.
The minimum size for the issue of CDs is Rs. 62 iii. 5 lakhs. but are not backed by any assets. banks.the CD and its relation with the customer. CP is a short-term. unsecured usance promissory note issued at a discount to face value by well known or reputed companies who carry a high credit rating and have a strong financial background. Unlike CD. Hence they are unsecured. CPs are generally open to all the investors ± individuals. varied maturity and high yield when compared to bank deposits. non banking company can raise funds through commercial paper. 5 lakhs (face Value) and thereafter in multiples of Rs. CPs are issued in multiples of Rs. 1 lakh. public sector unit. Investors prefer to invest in CPs due to high liquidity. 5lakhs and the minimum size of each issue is Rs. Also CPs have a minimum maturity period of 15 days and a maximum of 1 year. the liquidity is high because it can be transferred by endorsement and delivery. Corporates prefer to raise funds through this route when the interest rate on working capital charged by banks is higher than the rate at which funds can be raised through CP. Any private sector company. corporates and also non-resident Indians (NRIs) CPs are backed by the liquidity and earning power of the issuer. as prescribed by RBI. The company needs to get the commercial paper credit rated by one of the approved credit rating agencies like CRISIL/ICRA/DCR. Banks can issue CDs for a minimum period of 15 days to a maximum of one year whereas a financial institution can issue CDs for a minimum of 1 year and a maximum of 3 years. Moreover. Private Sector Securities:i. the issuer can buy-back its own CP. It is yet an another important source of raising funds that the corporates generally . CPs as a source of short-term finance is used by corporates as an alternative to Bank finance for working capital. Generally. A. Intercorporate Deposits:iv. etc. It should be taken into consideration that there is no ceiling on the maximum amount that can be raised by them. Commercial Papers:ii.
v. The guidelines on MMMFs specify a minimum lock-in period of 30 days during which investor cannot redeem his investment. By investing in the money market through MMMF the returns earned will be higher than what is obtained by depositing in a bank. invest funds usually in securities of capital market. other than MMMFs. at present. Retail investor normally deposits short term surplus funds into a saving bank account. The mutual funds. Also.adopt. However. MMFs can be set up by commercial banks. at a glance . RBI and public financial institutions. Certificate of Deposits etc. MMMFs are open not only to individual investors but also to trusts. Money market Mutual Funds invest funds primarily in money market instruments i.e. all the MMMFs should invest at least 25 % of their funds in treasury bills.. All MMMFs should get prior approval from the RBI. It should be taken into consideration that the interest rates of these instruments are generally higher than the other short-term sources since the risk is higher and is unsecured in nature. body corporates etc. The returns from the securities are distributed among the fund participants. the MMMFs from private sector are required to get prior approval from RBI and also from SEBI. Even companies in the private sector. 63 (III) REPO. societies. the returns from which are relatively low. MMMFs represent a low-risk and high-returns avenue to the retail investor in the money market. Thus. Commercial Papers. T-Bills. MMMFs accumulate the funds from widely scattered investors and invest the funds in different securities. bank and high rated corporate securities. Money Market Mutual Funds(MMMF) Money Market Mutual Funds are special type of Market Funds that invest primarily in money market instruments of very high quality and of very short maturities. Like other mutual funds. Government. are allowed to set up MMMFs based on the guidelines given by RBI. The safety level of these funds will also be high since the investments will generally be in high quality securities ie. On the contrary.
monetary contraction can be made possible by adopting repo transactions. a Bank or a NBFC. This transaction raises short-term funds to the party selling the securities.By repo it implies repurchase obligation. the Central bank can enter into repo transactions to remove the excess liquidity present in the system. there will also be instances where banks would like to buy the securities for a short term as a part of their SLR management in which case the size depends on the need for securities to make up for the SLR shortfall of the bank. It is an agreement. The Government introduced repurchase agreements in order to manage the excess of liquidity in the system. The transaction is called Repo from the point of the seller of the security whereas the same is viewed as reverse repo from the point of the buyer of the security. It is usually the borrower who initiates the transaction and decides the quantum of the borrowing depending on the requirement. which will be reversed at the end of the transaction. It should be taken into consideration that every . In a situation where there is excess money supply. However. Repo transactions are basically a contract that is entered into by two parties. That is. Hence the minimum period can be even a day while the maximum period is normally 14 days. It essentially results in cash money form the buyer to the seller at the beginning of the transaction. though repos for a longer-term are also seen in the market. which may include the RBI. Though there is no statutory limit for this maximum period it normally does not exceed 3 months. The underlying securities that are bought and sold are generally government securities. which involves a sale of a security with an undertaking to buy-back the same security at a predetermined price and at a future date. There are no regulations prescribing the minimum or maximum duration for a repo transaction. Thus the liquidity in the system is sucked out for the term of the Repo. RBI undertakes repos with banks as a part of its monetary management. RBI can add liquidity to the system by entering into reverse repos with Banks. When RBI enters into repo transactions it sells the securities to banks with an undertaking to buy them back.
In contrast. OMO basically involves the purchase and sale of government securities (i. the interest rate is likely to be lower than the rate prevailing in call market. amount and the prevailing call money and term money rates. Reverse Repos involve buying the securities in the first leg which will be sold back. 1 crore. Considering the secured nature of borrowing in a repo transaction. [IV] Open Market Operations (OMO) RBI can adjust the liquidity in the system by its open market operations. Repo transactions involve sale of securities in the first leg and buy them back later. at the close of business on any day be less than such percentage of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight.. This is referred to as µStatutory Liquidity Ratio¶ In case of RBI. On the other hand. it would be unsecured in nature. The interest rate on the borrowing will be mutually negotiated depending on the term. RBI announces the nature of securities eligible for Repo transactions.banking company shall maintain in India in cash. If a bank borrows the amount to meet their requirements through a repo transaction the lender will receive a security duly transferred which will be held in his name till the reversal of the transaction takes place. However.e. gold or unencumbered approved securities an amount which shall not. tenders should be submitted for a minimum amount of Rs. While the open market purchase of G-secs will ease the liquidity of banks. 1 crore (based on face value of securities) and in multiples of Rs. Hence Repos will involve reduction in money supply for the period of repo while reverse repo will increase the money supply. if the bank borrows the same amount in the call market. All the GOI securities and Treasury bills are eligible for Repo transaction. the open market sale of the same . the difference is not very conspicuous since the default risk in a call loan is also significantly low. Even state Government securities have been made eligible for undertaking repos. As far as securities are concerned. T-Bills and Government dated securities) by RBI through is open window. as the Reserve Bank of India may specify from time to time. To conclude with.
a drive to increase its size and range of activity. In 1998. seems to be the watershed in its dream of becoming an universal bank. Following significant proportion of loans made in the early and mid-1990s turning bad. On the other hand. The report clearly pointed towards . ICICI has relentlessly pursued its goal of becoming an universal bank to survive the changed environment. have been the defining features of ICICI's strategy. As a part of the OMO. ICICI Bank. a universal bank to carry out all kinds of intermediation under one roof as been viewed as a route to make the best of new opportunities as well as face up to new competition. For instance. Ever since Development Financial Institutions (DFIs) were cut off from concessional funding in the early 1990s and asked to face heightened competition. bank reverse merger an acid test SIZE. a committee comprising commercial banks and DFI examined the ways in which the role played by them could be harmonised. which can be an incentive to buy securities from RBI. Reserve Bank of India may buy or sell specified government securities at prices determined by RBI. Simply put.will contrast their liquidity. If RBI wants to reduce the money supply it can offer yields on specified securities which are higher than those prevailing in the market. an universal bank means nothing more than carrying out all aspects of financial intermediation under one roof. the move to embark on a reverse merger with its offspring. open market operations help RBI to adjust the liquidity in the system. commercial banking. wholesale lending. Thus. and thereby cushion the impact of loans turning bad. range and low-cost resources have been recurring themes in ICICI's strategy over the last few years. ICICI. In a new environment where all traditional barriers have vanished. if RBI wants to increase the money supply it can offer to buy securities at yields lower than the market related rates thus inducing the participants to sell the securities to RBI which will increase the money supply. retail lending and insurance were traditionally carried out by unrelated entities. This in effect reduces the money supply. Currently.
thereby making it easier to handle merger-related issues there. it will give ICICI a chance to access lower cost funds and thereby sharpen its competitive edge in many of its lending businesses. On the other hand. Banks such as SBI have been able to venture into the domain of the DFIs armed with low-cost deposits.both within and across different types of financial intermediaries -. Both ICICI and ICICI Bank are listed in New York Stock Exchange (NYSE). recently. Only early this week did the RBI say that universal banking should not be viewed as a strategy to address the problems of financial institutions such as non-performing assets.institutions and banks looking at mergers -. ICICI Bank' shareholders may not necessarily be pleased because it enjoys a better equity valuation and a better perception. One area where the impact could be telling is retail consumer financing business such as commercial vehicle finance. Growing competition from other financial intermediaries.and thereby view size as a strategy to thrive in a more competitive environment. the foray of DFIs into the domain of banks have been handicapped by the lack of access to low-cost deposits. universal banking that includes the likelihood of a reverse merger with ICICI Bank has for long been a strategy proclaimed by ICICI. Though ICICI Bank's balance sheet (as on March 31. 2001) is just 29 per cent the size of ICICI's balance sheet. ICICI's shareholding in ICICI Bank is currently around 46 per cent. ICICI's image has been clouded by speculation on the real extent of bad loans in its books. In the case of shareholder approval. an area dominated by finance companies. The biggest hurdles that the merger is likely to face are smoothening the difference in regulatory requirements between commercial banks and DFI. ICICI. entered commercial vehicle financing and the impact on pricing . and convincing shareholders. In this environment. a harsher environment for corporates and withdrawal of concessional funding have left DFIs most vulnerable.
If it goes through smoothly.structure was immediate. that foreign capital will come only when the domestic economy is stable. foreign investment in infrastructure in the developing countries has declined instead of increasing. IMPORTANCE AND NEED OF INVESTMENT BANKING IN INDIA Importance of public investment in infrastructure ONE of the planks on which the Congress(I) came to power was seeing greater role for the government in the economy. that stability will come when inflation is in control. Developing countries have more or less followed the World Bank approach. In the case of a merger. This is welcome. One only hopes the party will not get derailed from this policy by the World Bank's advice. and that the government will have to reduce its expenditure to control inflation. the share of foreign investors in investment in infrastructure of the developing countries . The attempt at reverse merger between ICICI and ICICI Bank will be the first of its kind in India. However. In India. there may other such in the making. for example.8 per cent equity stake in Corporation Bank. Yet. The World Bank has been teaching India for the last 10 years that it needs a large amount of foreign capital for investment in infrastructure. This is much lower than the 8-13 per cent inflation of the earlier decade. All eyes are likely to be glued to the ICICI group for the moment. the Prime Minister. For example. there have been other path-breaking moves to capitalise on new opportunities. IDBI and UTI are two large institutions grappling with critical problems and IDBI in particular needs to access lower cost funds to stay competitive. inflation has been under 6 per cent for much of the last six years. The most significant being the strategic alliance between LIC and Corporation Bank after LIC took a 26. has been close to these multilateral institutions. The proposed reverse merger is likely to be a test case in the financial sector. After all. finance companies will find it almost impossible to compete with ICICI. Dr Manmohan Singh. According to World Bank's Global Development Finance Report 2004.
Foreign investments have dropped in developing country infrastructure because they have not been profitable. This declined to 3. but on the other. New Delhi was investing 10 per cent of GDP in the 1980s. A survey of 32 road projects by Standard & Poor's found that the use of roads was less than projected in 28 cases. Similarly. The World Bank taught India that foreign investment will rise if you maintain economic stability but exactly the opposite happened. But these investments are yet to return any profits. This has declined to 5. But demand for power did not materialise and investment in power sector came to a standstill. This explains the decline in the share of foreign investors in developing countries. the demand for infrastructure did not arise as projected and the foreign investors ran away. As a result. investments may increase because private investors have greater confidence. Why is the share of foreign investment in developing country infrastructure declining? The truth is that the mantra of economic stability works like a double-edged sword. This decline in public investment led to a slowdown in the economy. But they fail to explain why the positive impact of reforms is not to be seen. State Electricity Boards entered into agreements with foreign investors to buy power at high prices thinking the increasing demand would make it possible for them to sell expensive power to the consumers. according to Economic Survey. Investors laid excellent roads thinking that many vehicles would ply on them but this did not happen. Why did the expected demand for infrastructure not happen? The reply the World Bank and mainstream economists give is that the fiscal deficit of the government is still large and deeper economic reforms are required.was 6.4 per cent last year. public investment declines because the government has to control its fiscal deficit.2 per cent six years ago. . On the one hand.9 per cent in 2002. Telecom companies made huge investments in optic fibre cables and 3Generation mobile phones across the world.
How did China secure high rates of growth by following the World Bank prescriptions? But this may prove to be short-lived. Thus. The role of government in infrastructure is important." This is strange. It is even more unfortunate that the World Bank continues to harp on the importance of economic stability which practically means that public investment in infrastructure has to be further reduced. Let us hope that it stays on course. It was unnecessarily pushed the wrong way by the World Bank. At that time prices were rising at 8-12 per cent per year.The World Bank has indirectly accepted this reality. India should not get distracted by China's experience. research. The figures may also be suspect. RELATIONSHIP OF FOREGIN BANK AND INVESTMENT BANKING Global Relationship Banking The Global Relationship Bank (GRB) is a leading provider of financial . Now that there is considerable macroeconomic stability. But that is asking for the moon. This means that about 22 per cent savings of China are being taken away by the MNCs. It can be argued that government consumption should be cut so that public investment can rise along with lowered fiscal deficit. It was investing 10 per cent of GDP. revenue expenditures in Defence. law and justice have the positive effect of fostering economic growth. This is precisely what the Government of India was doing in the 1980s. particularly in sectors such as water and road transport. Salaries constitute a large part of the revenue expenditures and they are difficult to cut. Infrastructure was being developed. Yet the growth rates are nearly equal. It has said in its Global Development Finance report that "public sector support will remain crucial in attracting private capital. space. But the more important point is that China is saving 45 per cent of its national income while India is saving merely 23 per cent. At that time the World Bank got the government to stop investing saying that it was more important to establish macroeconomic stability. It is welcome that the Congress(I) has adopted this stance. the Bank is saying that the role of the public sector is important! The country was moving in the right direction. One question remains. Moreover.
serving the financial needs of the world's preeminent corporations and financial institutions at both their head offices and at their subsidiary operations. the GRB is organized primarily along industry lines. It is crucial that the isolation from the originator be established and for the comfort of the investor clearly stated by the . The result is a steady stream of innovative cross border and local financial solutions. value-added solutions for our clients. wherever they may be around the world. derivatives. Our organization is defined by the clients we serve. They can also draw upon the entire spectrum of Citigroup's services beyond corporate and investment banking to serve the needs of clients and their employees. and structured products. Importantly. RBI AND INVESTMENT BANKING LEARNING FROM INDIA¶S FIRST CDO EXPOSURE: ON WHOM IS THE INVESTORS¶ EXPOSURE ? A clarification on whether investing in securitisation instruments is exposure to the originator or to the SPV is important. clearing. and loans. Our global relationship bankers are specialists in a full array of corporate banking solutions. Serving companies in over 100 countries.services to top-tier multinational clients worldwide. from cash management. foreign exchange. tailored to the specific needs of individual clients. This organizational model yields a capability which draws on a deep understanding of industry trends. Combined with a keen appreciation for the broad set of services offered by Citigroup. to capital markets. all with the ultimate objective of helping their clients succeed in their businesses around the world. this understanding forms the basis for the effective delivery of innovative. as well as market knowledge based on a local presence which dates back up to 100 years in many of these markets. they also work in tandem with their investment banking partners to introduce our investment banking capabilities to their relationship clients. and we're staffed by relationship bankers whose task is to understand the wide range of banking issues facing these highly complex institutions. custody.
A clarification to investors from RBI to this effect would be a necessity if any of the banks were expected to invest in ICCDO. For ICCDO. The method of obtaining this clarification from RBI is as follows: First. In the case of ICCDO most of the major investors have a very high exposure to ICICI. All the same. This time period has to be considered while planning a market issue where a similar clarification is required from the RBI. However it should be noted that the work on this front was started somewhere in the middle of February. It may be interesting to note what the RBI working Committee says on this: Suggestion in RBI Working Committee Report: ³Banks and Financial Institutio ns investing in the ABS/MBS will get exposed .Reserve Bank of India. an investing bank has to write a letter seeking a clarification pertaining to exposure for this specific issue. In the case of ICCDO. RBI has confirmed that investment in this particular issue shall not be an exposure on ICICI. However this issue has not been resolved completely. A new structure necessitates an explanation of the instrument to various people at RBI ranging from a Deputy Governor to a Deputy General Manager. In the case of the ICCDO issue. ICICI¶s relation with the regulator has played a major role in expediting the clarifications. this letter is very significant as it is the first time that the RBI has chosen to comment on any securitised instrument. The process is time consuming and hence should be done on a Proactive basis. it took around 12-15 days to obtain the clarification. for the simple reason that this letter from RBI does not state as to whom the investor is exposed to should he invest in the ICCDO. subsequent to the letter from a Bank to RBI.
should guard against concentrations of exposures to a particular industry/sector.to the pool of assets/mortgages/obligors underlying such securities. however the valuation was to be done as per any other mutual fund unit. the exposure may be treated proportional against those borrowers. Co-operative banks cannot invest in corporate paper. In case there are a few identifiable obligors. RRBs are allowed to invest in corporate paper with a cap of 5% of their incremental deposits. the exposure may be treated against this particular sector to which the pool of assets belong. institution or geographic area. The institutions therefore. VALUATION OF THE PAPER IN THE BOOKS OF INVESTORS: A major concern for investors is the valuation of this instrument. This regulation did not allow them to invest in the ICCDO.´ It is to be noted that this is only a recommendation by a committee and does not have e any regulatory value. MFs cannot invest more than 5 % of their Net Asset Value in other mutual funds. each of whom has the share of 25 per cent or more in the pool of assets. In the case of a large number of underlying obligors. If Mutual Funds had come in as investors into this issue. the exposure may be treated against those obligors. If a Mutual Fund invests in another MF unit they also lose out on AMC fees. ELIGIBILITY CRITERIA FOR INVESTORS Co-Operative Banks and Regional Rural Banks Co-operative Banks are not allowed to invest in Mutual Funds except for schemes floated by UTI. The main reason has been the issuance of the securities in the form of Mutual Fund units. it would have been a positive boost for secondary market liquidity of this instrument. Even RRBs are not allowed to invest in mutual funds. as they (MFs) are the most active traders. Its . Mutual Funds Mutual Funds preferred to stay away from the issue. In case there are one or two obligors. The confusion probably cropped up due to the fact that the instrument is to be traded like a other bond.
the cushion in terms of cash reserve and tranching is sufficient to protect investors from any yield loss to certain extent. has made investors skeptical about the motive behind this securitisation transaction. µAvailable for Sale¶ and µHeld To Maturity¶. whichever is lower. The inclusion of certain assets. In our opinion. the valuation is done on a daily/ weekly basis. the valuation is done on a quarterly / half yearly / annual basis and for µHeld To Maturity¶ category. If to say that nearly all the assets continue to remain on ICICI¶s books. this exercise has increased market awareness of Securitization and particularly CDO¶s . Investors wrongly felt that ICICI is trying to take out bad assets out of its books. Bank valuation is done on category wise basis. µAvailable for Trading¶. as and when the NAV is published. CONCERN ABOUT THE UNDERLYING POOL OF ASSETS. For valuation. after securitising a part. no valuation is required.NAV was to be declared every week as is mandatory under SEBI rules. In µAvailable For Sale¶ category. MARKETING STRATEGY The marketing efforts have been stupendous and close to 400 presentations were made to the whole gamut of prospective investors. However. with no precedent to build their comfort level. SECONDARY TRADING IN THE PAPER: ICICI agreed to provide Market Making in this instrument by way of daily two . The best way to allay these fears is if the Originator continues to hold some assets of the same Obligors.way quotes. it should be well emphasized to the investors that since it is very unlikely that all assets would default at the same time. the price considered is either the NAV or the repurchase price. For µAvailable For Trading¶ category. investors still remained unconvinced about liquidity since this was a first time transaction. depending on which category the investment falls under viz. Besides that. the mutual fund units were also proposed to be listed on the NSE. which has defaulted on interest payments to institutions. However.
All the same in hindsight. the migration path to BizTalk 2004 has become much clearer for the bank. consumers are more informed about financial services and far more likely to switch between providers. as well as increased processing capabilities.112.024 crore. This requires banks to differentiate themselves from the competition by providing a unique customer experience ICICI Bank. India¶s second largest bank. such as Rules Engine and Business Activity Monitoring (BAM). It helped the bank overcome the limitations of the then existing infrastructure in terms of scalability and flexibility. driven by an ever more competitive landscape. with total assets of about Rs. providing a multi-channel experience is no longer an option for banks. At the same time. Situation In the retail banking market. wanted to provide an enriched customer experience that would encourage loyalty among existing users and help it gain new business. banking .tremendously. Should the marketing have been top down or bottoms up? Though both the approaches were taken. we can possibly say that the following two strategies could have positively impacted the overall marketing. a higher and early concentration on a top-down approach would have worked better. ICICI Bank wanted to explore how new features. Less than five years ago. The results of the trial showed that the bank could achieve much more flexibility and efficiency in report generation and monitoring. it joined the early adopter program (EAP) for Microsoft BizTalk Server 2004. it is a necessity. To further enhance its capabilities in this area. It could also achieve more complex orchestration of transactions between its channels and various back-office systems. would help it meet the increasingly sophisticated demands of its customers. in our opinion. CASE STUDY ICICI Bank has successfully implemented Microsoft® BizTalk Server 2002 as an enterprise application integration solution as part of the infrastructure for its multi-channel banking operations. After the trial.
a 1. but since then the bank has moved to the Microsoft . . rolling out a multi-channel strategy that today includes a network of about 450 branches and offices. This was implemented by Microsoft Consulting Services and ICICI Infotech.750 ATMs. the bank implemented an enterprise middleware based on Microsoft® BizTalk Server 2002 and Microsoft SQL Server 2000. But ICICI Bank has been at the forefront of change in the country.NET Framework and the Visual Studio .500-seat call center and an Internet banking user base of over five million.NET development environment to take advantage of native support for XML Web services. The bank has used the business process orchestration capabilities of BizTalk to create drawings that describe loosely coupled business processes. 1.´ After a tendering process. It needed a solution that would achieve a high level of integration and the flexibility to service customers in a more efficient and effective manner. a group company of ICICI Bank. Manager. It also wasn¶t flexible enough for the type of demands that the business was putting on it. These processes can then be compiled and executed. Jayant Prasad. The bank offers a wide range of banking products and financial services to corporate and retail customers in the areas of consumer banking. including leading middleware vendors. It found that with a rapid growth in customer numbers. and completed after several months. says: ³Our middleware at the time just was not scaling to the kind of volumes we were beginning to see.in India was primarily restricted to branches. component re-use and improved development efficiency. life and non-life insurance. The custom code layer built on top of BizTalk Server 2002 was originally built using C++. Technology Management Group. investment banking. venture capital and asset management. in terms of implementing new transactions and modifying existing ones. the proprietary middleware it had built to connect the multiple channels with the bank¶s various back-office systems was no longer sufficient. ICICI Bank. and the synchronous and asynchronous linkages between multiple channels and back-office systems. ICICI was satisfied with the progress it made thanks to BizTalk Server 2002.
new orchestration-based scenario that could potentially run at the bank¶s call centers. As with the implementation of its original solution. It was particularly interested in new features. related to a customer request for a credit card limit increase. In this scenario. and was tested with BizTalk 2004 to explore how the migration of orchestrated transactions would work. . such as Health Activity Tracking. The new business process orchestration capabilities also afforded more power to define and implement complex pathways for the developers. This would enable call center workers to amend and make additions to forms in the familiar Microsoft Office System environment. This provided ICICI Bank¶s technology team with a clear understanding of how and where Microsoft Office InfoPath 2003 could play a role within its solution as a forms engine The powerful features within BizTalk 2004 provide the ability to expose orchestrations as Web services as well as call Web services from within orchestrations. and Human Workflow to help increase its customer service capability Solution ICICI Bank decided it would use BizTalk Server 2004 in two different scenarios to explore new enhancements and how they might benefit the bank. customers¶ credentials such as credit card number and PIN are supplied at a front-end channel are sent to the back-end system for validation. it was keen to investigate BizTalk Server 2004. Rules Engine.For this reason. it was supported by Microsoft Consulting Services and ICICI Infotech The first scenario was one that the bank already had been testing in its existing solution. user-friendly front end to BizTalk 2004. The use of Business Rules Composer and InfoPath provided the bank with a flexible. The testing also revealed how property fields could be used to enable correlation between sets of transactions and promote data fields within XML schemas. Business Activity Monitoring. Upon successful validation. the transaction can then be sent to the credit card system for processing using the orchestration features of BizTalk 2004 A second. and signed up to the early adopter program to evaluate its migration options.
Further. the business groups could use the Business Activity Monitoring (BAM) module for online tracking of processes. as well as the identification of business milestones. .Both scenarios meant the developers could use the Health Activity Tracking functionality within BizTalk 2004 to identify and track the status of an executing orchestration.
standby underwriting. The bank performs public offerings. It means financing of the capital requirements of an enterprise rather than the current working capital demand of business. This is done by outright purchase and sale of securities offered by the issuer. Businesses specializing in the formation of capital..Conclusion Investment banks assist public and private corporations in raising funds in the Capital Markets (both equity and debt). BIBLIOGRAPHY The data which I have collected from the two sources Internet site i. and carries through mergers and acquisitions. acts as a broker..e. . or "best efforts selling.com The book which I have referred i. ³ INTERNATIONAL BANKING OPERATIONS´ .e. acquisitions and other types of financial transactions.google.com www. as well as in providing strategic advisory services for mergers." A form of banking done by investment banking firms for corporations . Investment banks differ from Commercial Banks which serve to directly take deposits and make commercial and retail loans. www.rbi.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.