Charles P. Kindleberger ―Merchant banking is the development of banking from commerce which frequently encountered a prolonged intermediate stage known in England originally as merchant banking.
The Notification of the Ministry of finance defines A 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 or rendering corporate advisory service in relation to such issue management‖.
• A merchant banker is one who is a critical link between a company raising fund and the investors.
• Merchant banker is one who underwrites corporate securities and advices clients on issues like corporate mergers.
• The merchant banker may be in the form of a bank, a company, firm or even a proprietary concern.
• Merchant Banker understands the requirements of the business concern and arranges finance with the help of financial institutions, banks, stock exchanges and money market.
Objectives
Channelizing the financial surplus of the general public into productive investments avenues.
Co-coordinating the activities of various intermediaries like the registrar, bankers, advertising agency, printers, underwriters, brokers, etc., to the share issue.
Ensuring the compliance with rules and regulations governing the securities market.
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