12 August 2010
An investment bank is different from your traditional bank down the street in the sense that it does not keep any deposits with itself to pay you an interest nor does it guarantees the "safekeeping" of your money.
An investment bank is more specialized organization that takes in your money and after analyzing the possible risks and economic conditions gives you advice to convert it into more money. The services provided by Investment Banks takes many forms: securities underwriting, stock and bond trading, facilitating mergers and acquisitions, arranging and funding syndicated loans and providing financial advice to companies on aspects like pricing of securities.
A broader and better definition of investment banking is to think of investment banking as an industry, which either trades directly in capital market products or uses the underlying capital markets, to construct different financial products
So an Investment Banker is an individual or institution who/which acts as an underwriter or agent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. investment banks also have a large role in facilitating mergers and acquisitions, private equity placements and corporate restructuring.
Commercial banks services to individual customers. The most often used services are savings and checking accounts, personal accounts, mortgages, debit or credit cards, and etc.
12 August 2010
What Does Retail Banking Mean -----
Typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs).
A bank that deals mostly in (but is not limited to) international finance, long-term loans for companies and underwriting. Merchant banks do not provide regular banking services to the general public.
An activity that includes corporate finance activities, such as advice on complex dinancings, merger and acquisition advice (international or domestic), and at times direct equity investments in corporations by the banks.
12 August 2010
Retail banking refers to banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Banking services offered to the general public. Retail banking services are a group of financial services that includes installment loans, residential mortgages, equity credit loans, deposit services, and individual retirement accounts. In contrast with Wholesale Banking or corporate banking, retail banking is a high volume business with many service providers competing for market share. Some retail banking services, for example, credit cards, are among the most profitable services offered by financial institutions.
12 August 2010
The notification of Ministry Of Finance in India defines Merchant Banker as “any person who is engaged in the business of issue management either by making arrangements regarding selling, buying, or subscribing to the securities as manager, consultant, adviser in relation to such an issue management”. In general the merchant banks are the financial institution which provides financial services, solutions, & advice to corporate houses. Some of the world famous merchant banks are Goldman Sachs, Credit Suisse & Morgan Stanley etc. In India there are many banks which are into the field of merchant banking some of the banks are ICICI, State Bank Of India, Punjab National Bank etc.
12 August 2010
Merchant Bankers in India As of now there are 135 Merchant bankers who are registered with SEBI in India. It includes Public Sector, Private Sector and foreign players some of them are
Public Sector Merchant Bankers · SBI capital markets ltd · Punjab national bank · Bank of Maharashtra · IFCI financial services ltd · Karur Vysya bank ltd, · State Bank of Bikaner and Jaipur
Private Sector Merchant Bankers · ICICI Securities Ltd · Axis Bank Ltd (Formerly UTI Bank Ltd.) · Bajaj Capital Ltd · Tata Capital Markets Ltd · ICICI Bank Ltd · Reliance Securities Limited · Kotak Mahindra Capital Company Ltd · Yes Bank Ltd.
Foreign Players in Merchant Banking · Goldman Sachs (India) Securities Pvt. Ltd. · Morgan Stanley India Company Pvt. Ltd · Barclays Securities (India) Pvt. Ltd · Bank Of America, N.A · Deutsche Bank · Deutsche Equities India Private Limited · Barclays Bank Plc · Citigroup Global Markets India Pvt. Ltd. · DSP Merrill Lynch Ltd · FEDEX Securities Ltd
* Commercial banks are catering to the needs of the common man whereas the merchant banks cater to the needs of corporate firms. * Any person can open a bank account in the commercial bank whereas it cannot be done in the merchant bank. * Merchant bank deals with equities whereas the commercial bank deals with debt related finance which includes the activities like credit proposals, loan sanctions etc. * The merchant bank is exposed to the market so it is more exposed to risk as compared to commercial banks. * Merchant bank is related to the primary market whereas the commercial markets are more into secondary markets. * Merchant banking activities are capital restructuring, underwriting, portfolio management etc whereas the commercial banks play the role of financers. * The activities of merchant banks have a direct impact on the growth and liquidity of money markets. * Merchant Bank is management oriented whereas the commercial banks are asset oriented * The commercial banks generally avoid risks and on the other hand the merchant banks are willing to take the risks.
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