NATIONAL LAW UNIVERSITY, ODISHA

CORPORATE LAW-II PROJECT SYNOPSIS

MERCHANT BANKING: AN INDIAN PERSPECTIVE

SUBMITTED TO:
PROF. RAJAT SOLANKI

SUBMITTED BY:
Harshvardhan Pabri
14/BA. LLB/016

INDEX

Contents
INDEX.................................................................................................................... 2
Introduction........................................................................................................... 3
Objective of research............................................................................................. 3
Hypothesis............................................................................................................. 4
Research question................................................................................................. 4
Tentative Chapterization........................................................................................ 4

INTRODUCTION

Merchant Banking is a combination of Banking and consultancy services. It provides

consultancy to its clients for financial, marketing, managerial and legal matters. Consultancy
means to provide advice, guidance and service for a fee. It helps a businessman to start a
business. It helps to raise (collect) finance. It helps to expand and modernize the business. It
helps in restructuring of a business. It helps to revive sick business units. It also helps
companies to register, buy and sell shares at the stock exchange. Merchant banking provides
a wide range of services for starting until running a business. It acts as Financial Engineer for
a business.
A merchant bank is a financial institution providing capital to companies in the form of share
ownership instead of loans. In the United Kingdom, the historical term "merchant bank"
refers to an investment bank.
Today, according to the U.S. Federal Deposit Insurance Corporation (FDIC), "the term
merchant banking is generally understood to mean negotiated private equity investment by
financial institutions in the unregistered securities of either privately or publicly held
companies. Both commercial banks and investment banks may engage in merchant banking
activities. Historically, merchant banks' original purpose was to facilitate and/or finance
production and trade of commodities, hence the name "merchant". Few banks today restrict
their activities to such a narrow scope.

OBJECTIVE OF RESEARCH

The broad area of study is the general objective. The major objectives of the study

would be to go deep into the study of Merchant Banking as a subject of study.

The Specific Objectives of the study is carried on objectively keeping the relevant
factors in view.

HYPOTHESIS
Merchant Banking is recent origin in the scenario of Indian Financial Service. In India
merchant banking services were started only in 1967, by National Grindlays Bank, followed
by Citi Bank in 1970. The SBI was the first Indian commercial bank having set up a separate
merchant banking division in 1972. Narta (1996) conducted a research study to find out the
growth of new issue market and underwriting of capital issues in India, and to analyze the
cost of raising capital during the period 1970-71 to 1988-89. The study was based on the
secondary data. The progress of the Securities Industry of any country depends mainly on the
flow of funds. In fact, capital generation is the lifeblood of the capital market without which
the health and soundness of the financial system cannot be geared and for which welldeveloped capital market as well as money market is essential.

RESEARCH QUESTION

1. What is the meaning of the term Merchant Banking when it comes to SEBI
merchant bankers rule 1992?
2. Ascertainment of risk because of which Merchant Banks are worried by the trend of
incidence of loan defaulters and bad debt been recorded?
3. what is the legal authority of merchant banks in india?

TENTATIVE CHAPTERIZATION

I.
II.
III.
IV.

Introduction
Merchant banking in India
Who are merchant banker?
Role of merchant banker