Question

Marketing Corporate Securities and Providing services related to capital market is the basic function of

• A. Retail Bank
• B. Investment Bank
• C. Merchant Bank
• D. Central Bank

Answer 1

Answer:

C. Merchant Bank

Merchant banking:

• New projects and raising funds through borrowing and issue of equity.
• They were originally traders of commodities.
• Besides trading, they undertake financing to trade especially foreign trade.
• They also collect deposits from their customers.
• The basic function of a Merchant Bank is - Marketing Corporate Securities and Providing services related to capital market.
• Merchant banking activities especially those covering issue and underwriting of shares and debentures.
• Merchant Banking originated in Italy.
• First Merchant Banking started in India by Grindlays Bank in 1967
• First Indian bank started merchant banks in India- SBI (1972)