PRESENTSTATEOFMERCHANT

BANKINGININDIA
 OriginofMerchantbanking
Merchant banking originated through the
enteringofLondonmerchantsinforeigntrade.
Later,the merchants assisted the Govt of under
developedcountriesinraisinglongtermfinance.
Overaperioddomesticbusinessofsyndication
oflongtermandshorttermfinance,underwriting
of new issues,acting as registars and share
transfer agents,debenture trustees,portfoilo
managers, negotiating agents for mergers,
takeoversetc
 HistoricalPerspective:
Till 18th century moneylenders,
moneychangers,villagemerchantsperformed
thefunctionofbanks&merchantbankers.
They also issued & discounted bills of
exchange(handiest)&bankdraft.
They gave loans on mutual trust, on mortage
oflands.Ornaments&otherproperty.
Merchant banks are private Financial
institution.theirprimarysourceofincomeare
PIPEfinancingandtheirsecondarySourceof
incomeareconsulting.
MerchantBankingInIndiaPost
Independence:
In 1967 RBI Issued its first merchant
bankinglicencetogrindlaysbank.
Itstartedwithmanagementofcapitalissues,
production planning,system design and also
market research. It provides management
consultingservicesaswell.
In1970Citibanksetupitsmerchantbanking
division
 Itsscopeincludesassistingnew
entrepreneur,evaluatingnewprojects,
raisisgfundthroughborrowingandissuing
equity

In1972*Indianbanksstartedbanking
serviceasapartofmutipleservices.
*Statebankofindiastartedthe
merchantbankingdivisionin1972.
TheSBI'sobjectivewastorendercorporate
adviceandassistancetosmallandmedium
enterpreneurs.
ThecommercialbanksthatfollowedSBIwere
Centralbankofindia,BankofIndiaand
Syndicatebankin1977.
BankofBaroda,StandardCharteredBankand
MercantileBankin1978.
UnitedbankofIndia,UnitedCommercialbank,
PunjabNationalbank,CanaraBankand
IndianOverseasBankinlate'70sandearly'80s
AmongthedevelopmentbanksICICIstarted
MerchantBankingactivitiesin1973
IFCI(1986)andIDBI(1991).
 CurrentAffairs:

RBIallowscashwithdrawalfrommerchant
bankterminals.
MorganStanleymakesibankingcomeback.
PNBaimsprofitof7500croreby2013.
ICICIBanktooverseemergersand
acquisitions.
BirlaCapitalandFinancialServicesgets
SEBIMerchantBankingLicense.
Normuralaunchesitsinvestingbanking
operationsinindia.