BANKING AFFAIRS

Detailed explanation-1: -UPSC Mains. Q. Which of the following is true about merchant bank? Notes: Merchant bank underwrites securities for corporations, advices clients on mergers and get involves in in ownership of commercial ventures.

Detailed explanation-2: -1. A merchant bank is a financial institution conducting money market activities and: a. Lending.

Detailed explanation-3: -A merchant bank is a financial institution that provides services like fund-raising, venture capital financing, underwriting, loan syndication, investment advice, portfolio management, and issue management.

Detailed explanation-4: -Unlike retail or commercial banks, merchant banks do not provide financial services to the general public. Some of the largest merchant banks in the world include J.P. Morgan Chase, Goldman Sachs, and Citigroup.

Detailed explanation-5: -The primary characteristics of merchant banking include a quick decision process, high density of information, loose organisational structure, the concentration of short and medium-term engagements, emphasis on fee and commission income, low-profit distribution rate, high liquidity ratio, and more.