What Is The Development In Merchant Banking?

Merchant banking is the financial institution which deals with loan syndication, merger and acquisition-related services, fundraising services, portfolio services, marketing and underwriting of the new issue, advisory services, project promotion, and project finance for large corporations, high net worth individuals, and multinational companies that have businesses all around the globe.

The main purpose of the merchant banking is to make money, expand and modernize, and restructure the business which ultimately reflects into the overall economic development of the country.

Following are recent development in merchant banking:

• Setting up of Banks Subsidiaries: Merchant banking divisions of the nationalized banks have started forming independent subsidiaries, which provides special service with professional experts because of the growing demand of broad-based financial services from the corporate organization.
• Re-organization of Private Firms: Private firms of merchant banking have started reorganization of their plans and activities due to the tough competition from the growing number of merchant banking subsidiary companies of nationalized banks.
• Establishment of SUA: Stockbroker Underwriters Association cooperate with the merchant bankers and take the measure to promote the equity market operation by providing information on new issuance of equity market, developing a code of conduct for underwriters, protecting the interest of investor, and other services.
• Securities and Exchange Board of India: It deals with the regulation of security market and investor protection. Person dealing with security market traders, merchant bankers, underwriters, sub-brokers, portfolio directors, mutual funds, etc. must seek the Board's authorization.
• Discount and Finance House of India: It primarily deals with business bills by providing liquidity in the money market to fulfill the demands of working capital.
• Credit Rating Information Services of India Ltd: CRISIL rates different kinds of tools available to the public, such as debt, equity and fixed return securities, and provide assistance to investors, merchant bankers, businesses, brokers, banks, financial institutions in taking investment decision.
• Stock-Holding Corporation of India Ltd: The All India Financial Institutions established SHC in 1986 to ensure the delivery of stocks, secure custody, and the collection of securities  post sales. The establishment of SHC will have an impact on the capital market.