Merchant banking is a crucial aspect of the financial ecosystem. Currently, there are over 200 SEBI-registered merchant banks that provide a wide range of services to their clients. These banks are very different from regular banking and from other financial institutions in several ways.
They provide services to large/mid-size businesses, high-net-worth individuals (HNIs) and institutional investors. So, if you are a business owner of a growing enterprise, knowing about them is crucial. Read on to learn more about this concept, its features, functions and benefits.
It is a professional service provided by banks to their merchant customers. These banks offer professional advice to large corporations in terms of:
As such, they do not cater to the general public, as their target customers are business owners.
Here are some of India’s top examples of merchant banking institutions registered with SEBI.
|Bank of Maharashtra
|Axis Bank Ltd
|Barclays Bank PLC
|Bajaj Capital Ltd
|Citibank N A
|Edelweiss Financial Services Ltd
|Goldman Sachs(India) Securities Pvt. Ltd.
|DBS Bank India Ltd
|Reliance Securities Ltd
|J P Morgan India Pvt. Limited
|HDFC Bank LTD
|Tata Capital Markets Ltd
|Morgan Stanley India Company Pvt Ltd
|IDBI Capital Market Services Ltd
|Motilal Oswal Investment Advisors Limited
|Nomura Financial Advisory and Securities (India) Pvt Ltd
To understand their role in the business’s growth and financial health better, here are the key functions of merchant banking institutions.
Here’s a quick overview of their advantages:
Considering the above, you can see how merchant banking differs from regular banking. These banks make financial planning and wealth management easy for mid and large-size corporations. Likewise, the Fibe’s Instant Personal Loan Online allows you to manage your financial emergency and urgent fund requirements without any hassles.
With an easy and 100% digital application process, you can avail up to ₹5 lakhs for your personal or business-related needs. With Fibe, you can also enjoy affordable rates, flexible tenure, no foreclosure fees and quick sanction. Download our Personal Loan App or go to our website to register online and apply now!
The difference lies in their customer base. As the name suggests, merchant banking is designed explicitly for large merchants/ business owners. It doesn’t provide regular services offered by regular banks like opening a savings account, FD, bank deposit, etc.
These banks offer a wide range of services that involve offering financial advice based on market analysis. Thus, the key advantage of merchant banking is that it helps businesses grow and expand their operations.
Here are some of their disadvantages:
Yes, but it’s a lot more than that. It also helps businesses in the following ways: