BANKING AFFAIRS

Detailed explanation-1: -Merchant banking is a financial service provider that offers a wide range of services such as underwriting, issuing of securities, asset management, portfolio management, and advisory services. Merchant banks provide specialized services to large corporations, high net worth individuals, and institutional investors.

Detailed explanation-2: -They do not provide basic banking services. Among all the services, the focus is on financial advice. These banks primarily earn from the fee paid for advisory services. In addition, the bank invests depositors’ assets in financial portfolios-based on expected returns and risk-taking capacity.

Detailed explanation-3: -Commercial banks serve both businesses and individuals, while merchant banks work only with businesses. And rather than lending money to companies like a commercial bank, merchant banks instead often invest in the companies for a share of the ownership.

Detailed explanation-4: -Merchant banking refers to the financial and banking services provided by a merchant bank to large corporations and individuals with high net worth. The services offered by merchant banks include underwriting, issue management, fundraising, loan syndication, portfolio management, financial advice, and more.