An investment bank is a financial and banking organization, which mainly provides both financial as well as advisory banking services

to their clients. Apart from that, an investment bank even deals with research, marketing and sales of a range of financial products like commodities, currency, credit, equities etc. An investment bank assists individuals, corporations and governments in the following: 1. Raising capital by underwriting 2. Acting as the client's agent in the issuance of securities 3. Assisting companies involved in mergers and acquisitions 4. Providing ancillary services such as o Market making o Trading of Derivates Fixed income instruments Foreign Exchange Commodities Equity securities Investment Bank emerged from the concept of Merchant banking which could be defined as "an organisation that acts as an intermediary between the issuers and the ultimate purchasers of securities in the primary security market". Merchant Banker has been defined under the Securities & Exchange Board of India (Merchant Bankers) Rules, 1992 as "any person who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities as manager, consultant, advisor or rendering corporate advisory service in relation to such issue management". Merchant Banking, as a commercial activity, took shape in India through the management of Public Issues of capital and Loan Syndication. It originated in 1969 with the setting up of the Merchant Banking Division by ANZ Grindlays Bank. The main service offered at that time to the corporate enterprises by the merchant banks included the management of public issues and some aspects of financial consultancy. The early and mid-seventies witnessed a boom in the growth of merchant banking organisations in the country with various commercial banks, financial institutions, brokerage firms, entering into the field of merchant banking.

Reform measures were initiated in the capital market from 1992, starting with the conferring of statutory powers on the Securities and Exchange Board of India (SEBI) and the repeal of Capital Issues Control Act and the abolition of the office of the Controller of Capital Issues. These have brought about significant improvement in the functional and regulatory efficiency of the market, enabling the Merchant Bankers shoulder greater legal and moral responsibility towards the investing public. ROLE OF INVESTMENT BANK At the macro level, investment banking is related with the primary function of assisting the capital market in its function of capital intermediation, i.e., the movement of financial resources from those who have them (the investors), to those who need to make use of them for producing GDP (the issuers).

Sources: Websites: http://business.mapsofindia.com/investment-industry/investment-banks.html http://www.karvy.com/corporatefin/mbdhome.htm http://en.wikipedia.org/wiki/Investment_banking