Merchant

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MERCHANT BANKING IN INDIA
INTRODUCTION
Financial services are an important component of financial system. Thesmooth functioning of financial system depends upon the range of financialservices extended by the providers. Financial services in India havewitnessed remarkable changes in the recent past after the implementation of  “Liberalization, privatization and globalization”

.Funds are tapped from the capital market to finance various mega industrial projects. In attracting public savings, merchant bankers play a vital role asspecialized agencies. The resources raising functions remains to be the primary business of a merchant banker. The primary market holds the key torapid capital formation, growth in industrial productions and exports. Therehas to be accountability to the end use of funds raised from the market. Theincrease in the number of issues and amount raised the number of merchant bankers. Therefore, the field became highly competitive market where itrequires a specialized skill in handling the situation. The merchant bankershave a social responsibility to in building an industrial structure in India. 1

Merchant bankers assist corporate in raising capital. They assist in issue of Shares, syndicating loans, public issue of debentures. They do not providefunds.They only assist. They also actively arrange working capital, appraisalProjects scrutinize & persuade merger proposals.  In BRITAIN 

merchant bankers & investment bankers are synonymous.
 In the U.S 
., Merchant bank means as investment bank which is well-equipped to handle multinational corporations.  In INDIA
merchant bankers is a body corporate who carries on any activityof the issue management, which consist of preparing prospectus & other information relating to the issue. Merchant banks in India are not allowed toconduct any business other than that related to securities market. There is noofficial category in investment banking. 2

Merchant Banking In India
· Merchant Banking In India:
The merchant banker are those financial intermediary involved with the activity of transferring capital funds to those borrowers who are interested in borrowing. The activities of the merchant banking in India is very vast in nature of which includes the following a) The management of the customers securities

b) The management of the portfolio,
c) The management of projects and counseling as well as appraisal d) The management of underwriting of shares and debentures
e) The circumvention of the syndication of loans
f) Management of the interest and dividend etc
Factors responsible for the Changes:
1) . Globalization of Indian Economy
It has made the whole economy open, which has more multinational player in the era of the financial services? This has resulted in to the emergence of the global investment in financial sector. Government has now open up the doors of investments especially in the area of banks and insurance, which leads to competitive environment for the present players. Now they have to bring something new which is efficient and best services to live in the competitive environment. 2). Competition arising out of Private Company Participation It is due to the liberalization of the economy. Now along with the public/government players, private players are also offering financial services and instruments, which are more innovative and different than the earlier offering. All around, there is a fresh thinking on the financial products, structure of banking and insurance instruments with value creation. Financial markets are being redefined, reinvented and reconfigured on a persistent basis. 3). Changing Customer Demographics:

If we look at the all-growing economies like China, Germany and Brazil, India has 35% of the population in the age group of 15years to 34 years. It is estimated that by 130mn plus people get added to working population by 2009 with 55 million families (320 million people) will be added in the middle-income...
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