{"id":51046,"date":"2025-06-20T12:00:31","date_gmt":"2025-06-20T06:30:31","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=51046"},"modified":"2025-06-20T13:45:54","modified_gmt":"2025-06-20T08:15:54","slug":"merchant-banking-in-india","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/merchant-banking-in-india\/","title":{"rendered":"Merchant Banking in India"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Merchant Banking Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The Securities and Exchange Board of India (SEBI) recently said merchant bankers (MB) can now engage in unregulated activities such as advisory and consultancies without needing a separate legal entity. <\/span><\/p>\n<h2 style=\"text-align: justify;\"><b>About Merchant Banking<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Merchant Banking refers to <\/span><b>financial services designed<\/b><span style=\"font-weight: 400;\"> especially <\/span><b>for businesses and corporate clients.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These services <\/span><b>help business owners raise funds, manage investments,<\/b><span style=\"font-weight: 400;\"> and <\/span><b>expand operations.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Banks registered as merchant bankers provide <\/span><b>expert advice on mergers, acquisitions, <\/b><span style=\"font-weight: 400;\">and <\/span><b>other business activities requiring capital.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They act as<\/span><b> intermediaries between companies and investors <\/b><span style=\"font-weight: 400;\">to ensure smooth financial growth.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The role of a merchant banker is <\/span><b>similar to that of a financial advisor.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They <\/span><b>help make critical decisions<\/b><span style=\"font-weight: 400;\"> and also help businesses expand by <\/span><b>arranging private equity investments or strategic partnerships.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">One of the primary services merchant bankers provide is <\/span><b>issue management.<\/b><span style=\"font-weight: 400;\"> It involves <\/span><b>helping companies raise capital<\/b><span style=\"font-weight: 400;\"> from the public by <\/span><b>managing the process of issuing shares<\/b><span style=\"font-weight: 400;\">, debentures, or other <\/span><b>securities<\/b><span style=\"font-weight: 400;\">.\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Merchant banks <\/span><b>do not provide regular banking services to the general public.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>regulatory framework<\/b><span style=\"font-weight: 400;\"> governing merchant banks in India is primarily <\/span><b>overseen by the Securities and Exchange Board of India (SEBI).<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">One of the key regulations involves the maintenance of <\/span><b>minimum net worth requirements<\/b><span style=\"font-weight: 400;\">, which ensures that merchant banks have <\/span><b>sufficient financial resources to undertake their activities and absorb potential losses.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additionally, SEBI mandates that merchant banks <\/span><b>adhere to a strict code of conduct, <\/b><span style=\"font-weight: 400;\">which includes provisions <\/span><b>related to fair dealing, conflict of interest,<\/b><span style=\"font-weight: 400;\"> and <\/span><b>transparency<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Merchant banks are also s<\/span><b>ubject to periodic inspections and audits by SEBI <\/b><span style=\"font-weight: 400;\">to ensure ongoing compliance.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Any violations can result in penalties, including suspension or cancellation of the registration certificate.<\/span><\/li>\n<\/ul>\n<h2><b>Services Offered by Merchant Banks<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Corporate advisory services:<\/b><span style=\"font-weight: 400;\"> Offering guidance on mergers, acquisitions, and restructuring\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Capital raising:<\/b><span style=\"font-weight: 400;\"> Helping businesses raise funds through debt or equity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Investment management: <\/b><span style=\"font-weight: 400;\">Managing large-scale investments and portfolios.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Underwriting:<\/b><span style=\"font-weight: 400;\"> Assisting in public offerings by guaranteeing the sale of securities. <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b style=\"font-size: inherit;\">Risk management: <\/b><span style=\"font-weight: 400;\">Reducing financial risks by offering expert advice.<\/span><\/li>\n<\/ul>\n<p><b>Source<\/b><span style=\"font-weight: 400;\">: <\/span><a href=\"https:\/\/www.thehindu.com\/business\/sebi-relaxing-merchant-banking-norms-may-boost-their-profitability\/article69714053.ece\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">TH<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Merchant Banking offers specialized financial services to businesses and corporates, including fundraising, advisory, and investment management support. Read more about Merchant Banking in India, Meaning, Services, Functions, UPSC Notes<\/p>\n","protected":false},"author":23,"featured_media":51076,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[937,21,22,23],"class_list":{"0":"post-51046","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-merchant-banking","9":"tag-prelims-pointers","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=51046"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/51076"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=51046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=51046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=51046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}