Merchant Banking Services - Definition, Development, SEBI Regulations | MODULE D: FINANCIAL PRODUCTS AND SERVICES
Merchant Banking Services Definition of Merchant Banking Merchant Banking refers to a combination of banking and consultancy services. It involves providing capital to companies in the form of share ownership rather than loans, and offers advice on corporate matters such as mergers and acquisitions, underwriting, and fundraising. Merchant banks primarily cater to large enterprises and high net-worth individuals (HNIs). Historical Background Merchant banking originated in the 17th and 18th centuries in Europe, especially in London. Initially, merchant banks assisted in financing foreign trade by providing short-term loans and issuing letters of credit. Over time, they expanded their services to include management of public issues, portfolio management, and underwriting activities. Development of Merchant Banking in India Merchant banking in India began in the late 1960s, with Grindlays Bank (now part of Standard Chartered) being the f...