ORIGIN OF MERCHANT BANKING

The origin of merchant banking is to be traced to Italy in late medieval timesand France during the seventeenth and eighteenth centuries. The Italianmerchant bankers introduced into England not only the bill of exchange butalso all the institutions and techniques connected with an organised moneymarket. Merchant banking consisted initially of merchants who assisted infinancing the transactions of other merchants in addition to their own trade.In France, during seventeenth and eighteenth centuries a merchant banker (lemerchand Banquer) was not merely a trader but an entrepreneur parexcellence. He invested his accumulated profits in all kinds of promisingactivities. He added banking business to his merchant activities and became amerchant banker.

MONEY CHANGER AND EXCHANGER1

In the late medieval to early modern times, a distinction existed in bankingsystems between money changer and exchanger. Money changersconcentrated on the manual change of different currencies, operated locallyand later accepted deposits for security reasons. In course of time, moneychangers evolved into public or deposit banks; exchangers who operatedinternationally, engaged in bill-broking, raising foreign exchange and provisionof long-term capital for public borrowers. The exchangers were remittersand merchant bankers. In the seventeenth century, a merchant banker was adealer in bills of exchange who operated with correspondents abroad andspeculated on the rate of exchange.

1. The most famous was Cosimo de Medici who in the mid-fifteenth centuryestablished a network of operations beyond Italy with offices in London, Bruges(Belgium) and Avignon (France).

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Initially, merchant banks were not banks at all and a distinction was drawnbetween banks, merchant banks and other financial institutions. Among allthese institutions, it was only banks that accepted deposits from public.

MERCHANT BANKS IN THE UNITED KINGDOM

In the United Kingdom, merchant banks came on the scene in the lateeighteenth century and early nineteenth century. Industrial revolution madeEngland into a powerful trading nation. Rich merchant houses who madetheir fortunes in colonial trade diversified into banking. Their principal activitystarted with the acceptance of commercial bills pertaining to domestic as wellas international trade. The acceptance of the trade bills and their discountinggave rise to acceptance houses, discount houses and issue houses. Merchantbanks initially included acceptance houses, discount houses and issue houses.A merchant banker was primarily a merchant rather than a banker but hewas entrusted with funds by his customers.

The term merchant bank is used in the United Kingdom (the oldestmerchant bank in London was Baring Brothers and it was very prominent inEurope during the nineteenth century, and it had considerable representationin North and South America) to denote banks that are not merchants,sometimes for merchants who are not bankers and sometimes for businesshouses that are neither merchants nor banks.2 The confusion has arisen becausemodern merchant banks have a wide range of activities. Merchant banks inthe United Kingdom (a) finance foreign trade, (b) issue capital, (c) manageindividual funds, (d) undertake foreign security business and (e) foreign loanbusiness. Many major merchant banking activities (money-market lending,corporate finance and investment management), are also performed by money-market dealers, commercial banks and finance companies, share brokers andinvestment consultants, and unit trust managers.3

They also used to finance sovereign governments through grant of long-term loans. They financed the British government to purchase shares of theSuez Canal, helped America purchase the State of Louisiana from Napoleonby raising loans from money market in London; and Lazard Brothers grantedloan to Government of India for Durgapur Steel Plant.

A merchant bank should contain some eleven characteristics: highproportion of decision makers as a percentage of total staff; quick decision

2. Reid, Sir Edward, “The Role of Merchant Banks Today”, the Presidential addressgiven to the Institute of Bankers, London, 15 May, 1963.

3. Michael T. Skully, “Merchant Banking”, The Bankers’ Magazine of Australasia,June 1977.

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process; high density of information; intense contact with the environment;loose organisational structure, concentration of short and medium termengagements; emphasis on fee and commission income; innovative instead ofrepetitive operations; sophisticated services on a national and internationallevel; low rate of profit distribution; and high liquidity ratio.4

Since the end of the second world war commercial banks in WesternEurope have been offering multiple services including merchant bankingservices to their individual and corporate clients. British banks set up divisionsor subsidiaries to offer their customers merchant banking services.

MERCHANT BANKING IN INDIA

As planning and industrial policy envisaged the setting up of new industriesand technology, greater financial sophistication and financial services arerequired. According to Goldsmith, there is a well proven link between economicgrowth and financial technology.5

Economic development requires specialist financial skills: savings banksto marshal individual savings; finance companies for consumer lending andmortgage finance; insurance companies for life and property cover; agriculturalbanks for rural development; and a range of specialised government orgovernment sponsored institutions. As new units were set up and businessesexpanded, they required additional financial services which were then notprovided by the banking system. Like the local banking system and the tradebefore, the local system of family enterprises was unsuited for raising largeamounts of capital. A public equity or debt issue was the logical source offunds.

Merchant banks serve a dual role within the financial sector. Throughdeposits or sales of securities they obtain funds for lending to their clients(SEBI forbids lending by them): a function similar to most institutions. Theirother role is to act as agents in return for fee. SEBI envisages a mandatoryrole for merchant banks in exercising due diligence apart from issuemanagement, in buy-backs and public offer in take over bids. Their underwritingand corporate financial services are all fee rather than fund based and theirsignificance is not reflected in their total assets of the industry. SEBI hasbeen pressing for merchant banks to be primarily fee based institutions.

4. Hans. Peter Bauer, What is a Merchant Bank, The Banker, July 1976, p. 795.5. Goldsmith, R., Financial Structure and Development, 1969, Yale University Press,

New Haven. Meckinnon, R.I., Money and Capital in Economic Development, TheBrookings Institution, Washington, DC.

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BANKING COMMISSION REPORT, 1972The Banking Commission in its Report in 1972 has indicated the necessity ofmerchant banking service in view of the wide industrial base of the Indianeconomy. The Commission was in favour of a separate institutions (as distinctfrom commercial banks and term lending institutions) to render merchantbanking services. The Commission suggested that they should offer investmentmanagement and advisory services particularly to the medium and small savers.The Commission also suggested that they should be able to manage providentfunds, pension funds and trusts of various types.

Merchant banking activity was formally initiated into the Indian capitalmarkets when Grindlays Bank received the license from Reserve Bank in1967. Grindlays which started with management of capital issues, recognisedthe needs of emerging class of entrepreneurs for diverse financial servicesranging from production planning and systems design to market research.Apart from meeting specially, the needs of small scale units, it providedmanagement consultancy services to large and medium size companies.Following Grindlays Bank, Citibank set up its merchant banking division in1970. The division took up the task of assisting new entrepreneurs and existingunits in the evaluation of new projects and raising funds through borrowingand issue of equity. Management consultancy services were also offered.

Consequent to the recommendations of Banking Commission in 1972,that Indian banks should start merchant banking services as part of theirmultiple services they could offer their clients, State Bank of India started theMerchant Banking Division in 1972. In the initial years the SBI’s objectivewas to render corporate advice and assistance to small and mediumentrepreneurs.

The commercial banks that followed State Bank of India in setting upmerchant banking units were Central Bank of India, Bank of India andSyndicate Bank in 1977; Bank of Baroda, Standard Chartered Bank andMercantile Bank in 1978; and United Bank of India, United Commercial Bank,Punjab National Bank, Canara Bank and Indian Overseas Bank in late seventiesand early ‘80s. Among the development banks, ICICI started merchant bankingactivities in 1973, followed by IFCI (1986) and IDBI (1991).

SERVICES RENDERED BY MERCHANT BANKS

The working of merchant banking agencies and units formed subsequently tooffer merchant banking services has shown that merchant banks are renderingdiverse services and functions, such as organising and extending finance forinvestment in projects, assistance in financial management, acceptance housebusiness, raising Eurodollar loans and issue of foreign currency bonds, financing

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of local authorities, financing export of capital goods, ships, hydropowerinstallation, railways, financing of hire-purchase transactions, equipment leasing,mergers and takeovers, valuation of assets, investment management andpromotion of investment trusts. Not all merchant banks offer all these services.Different merchant bankers specialise in different services. Merchant bankingmay cover a wide range of financial activities and in the process include anumber of different financial institutions. In the last 35 years new servicesand functions apart from issue management have been added.

ORGANISATION OF MERCHANT BANKING UNITS

The structure of organisation of merchant banks reveals certain similarcharacteristics:

• a high proportion of professionals to total staff;• a substantial delegation of decision making;• a short chain of command;• rapid decision making;• flexible organisation structure;• innovative approaches to problem solving; and• high level of financial sophistication.

In the words of Skully, a merchant bank could be best defined as a financialinstitution conducting money market activities and lending, underwriting andfinancial advice, and investment services whose organisation is characterisedby a high proportion of professional staff able to approach problems in aninnovative manner and to make and implement decisions rapidly”.6

Merchant banking activities are regulated by (1) Guidelines of SEBI andMinistry of Finance, (2) Companies Act, 1956 and (3) Listing Guidelines ofStock Exchange and (4) Securities Contracts (Regulation) Act, 1956.

INVESTMENT BANKING

Investment banks in USA are the most important participants in the directmarket by bringing financial claims for sale. They specialise in helping businessesand governments sell their new security issues, whether debt or equity in theprimary market to finance capital expenditures. Once the securities are sold,investment bankers make secondary markets for the securities as brokers anddealers. In 1990, there were 2500 investment banking firms in USA doingunderwriting business. About 100 firms are so large that they dominate the

6. Skully, Michael T., Merchant Banking in ASEAN, 1983, Oxford University Press,Kuala Lampur.

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industry. In recent years some investment banking firms have diversified ormerged with other financial firms to become full service financial firms.

INVESTMENT BANKS AND COMMERCIAL BANKS

Early investment banks in USA differed from commercial banks whichaccepted deposits and made commercial loans. Commercial banks werechartered exclusively to issue bank notes and make short-term business loans.On the other hand, early investment banks were partnerships and were notsubject to regulations that apply to corporations. Investment banks werereferred to as private banks and engaged in any business they liked and couldlocate their offices anywhere. While investment banks could not issue notes,they could accept deposits as well as underwrite and trade in securities.

The distinction between commercial banking and investment banking isunique and confined to the United States, where legislation separates them.In countries where there is no legislated separation, banks provide investmentbanking services as part of their normal range of business activities. Countrieswhere investment banking and commercial banking are combined have‘universal banking’ system. European countries have universal banking systemwhich accept deposits, make loans, underwrite securities, engage in brokerageactivities and offer financial services.

RESTRICTIONS ON COMMERCIAL BANKS

In India, commercial banks are restricted from buying and selling securitiesbeyond five per cent of their net incremental deposits of the previous year.They can subscribe to securities in the primary market and trade in sharesand debentures in the secondary market. Issue management activities whichare not fund based are managed by wholly owned subsidiaries and distinctfrom the banks’ operations. Further, acceptance of deposits is limited tocommercial banks. Non-bank financial intermediaries accept deposits for fixedterm and are restricted to financing leasing/hire purchase, investment andloan activities and housing finance. They cannot act as issue managers ormerchant banks. Only merchant bankers registered with Securities andExchange Board of India can undertake issue management and underwriting,arrange mergers and offer portfolio services. Merchant banking in India isnon-fund based except underwriting.

INVESTMENT BANKING IN USAEnglish and European merchant banks played a prominent role in the UnitedStates until indigenous investment bankers emerged in the 1880’s. In the earlynineteenth century English and European merchant bankers met therequirements of finance for rail road construction and international trade. Later

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they opened their own offices in USA. Kidder, Peabody & Co. was set up in1824 and John Eliot Thayar banking firm in 1857. During 1850–60 severalmerchant banks were set up to arrange capital and enterprise to promoterailways, industrial projects and trade and commerce. In the late 1890’s andearly 1900’s investment bankers replaced brokers and promoters who earlierplayed a prominent role in the issue of securities. Investment bankers apartfrom launching and organising industrial units and mergers helped transformprivately held companies into publicly owned companies.

Investment banking largely remained unregulated until the Blue Sky Lawswere introduced in Kansas to protect investors from fraudulent promotersand security salesman. However, their growth was facilitated by the enactmentof Federal Act in 1914, emergence of US dollar as leading internationalcurrency and expansion of activities of US banking system.

Prominent investment bankers in 1920’s were Kidder, Peabody, Drexel,Morgan & Co., Brown Bros and T.P. Morgan who bought and sold corporatebonds and stocks on commission, dealt in federal, state and municipal securities,trading and investing in securities on their own account, originating anddistributing new issues and participating in the management of corporationswhose securities they had helped distribute or in which they invested.

GLASS-STEGALL BANKING ACT, 1933After the great crash of 1929 and the depression, investment banking businessconsiderably contracted and experienced heavy financial losses. The federalgovernment enacted several laws, called New Deal Enactments, to reformWall Street practices to protect the interests of investors. Officially called theBanking Act of 1933 the Glass-Stegall Banking Act separated investmentbanking and commercial banking and prohibited depositories from underwriting.The Act, however, does allow commercial banks some security activities suchas underwriting and trading in US government securities and some state andlocal government bonds. Securities Exchange Act of 1934 sought of correctpractices in securities trading.

The Glass-Stegall Banking Act prohibits commercial banks from actingas investment banks or owning a firm dealing in securities. The Act has beenchallenged by banks offering money market mutual funds and other investmentservices and is expected to be the subject of reform. The US Federal ReserveBoard decided in January, 1997 to issue a sweeping proposal (subject to a 60-day comment period) that would loosen restrictions on bank’s activities in thesecurities business. Under the proposal bank holding companies and theirsecurities industry affiliates can offer ‘one stop shopping’ for their customers.

The securities activities of banks are allowed under a special provision inGlass-Stegall Act to be conducted by separately capitalised subsidiaries. In

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1987 when the Federal Reserve first bagan allowing the existence of suchsubsidiaries, it subjected them to strict provisions, including a series of barriersor ‘firewalls’ separating the activities of the bank and the affiliate. As a partof the recent changes to those provisions the Fed has voted to allow thesecurity affiliates of banks to generate as much as a quarter of their revenuefrom the underwriting and dealing of securities—an increase from the previouslimit of 10 per cent.

Regulation of Investment Banking in USAInvestment banking in USA as compared to merchant banking in the UnitedKingdom is subject to the following regulations:

1. The Securities Exchange Commission (SEC) exercises advisory andregulatory role on investment bankers.

2. Investment bankers were restricted from undertaking reorganisationof public corporations under the Chandler Act. The task was assignedto distinguished trustees.

3. Association of trustee with either the issue or its investment bankeris prohibited under the Trustee Indenture Act, 1939. To protect theinterests of security holders the trust indenture had to be filed withSEC.

4. The investment and portfolio activities became subject to SECsupervision.

The increased regulation and control of domestic operations gave a fillipto large US banks to undertake merchant banking functions in internationalcapital markets. The US investment banks have extended their operations tothe international level. They are largely responsible for the development ofthe Eurodollar market in securities and globalisation of capital markets. Theyhave a prominent presence in London and other European financial centres.Investment banks have today a strong parent, a strong balance sheet and astrong international network to play a global role.

ACTIVITIES OF INVESTMENT BANKS IN USAInvestment banks make the primary markets in USA, arrange mergers andacquisitions, undertake global custody, proprietary trading and market making,niche business, fund management and advisory services to governments andfirms. The five largest investment banks were Bear Stearns, Lehman Brothers,Merrill Lynch Goldman Sachs and Morgan Stanley.

Issue of SecuritiesInvestment banks make the primary markets in the USA. They are responsiblefor finding investors for initial public offerings (IPOs) of securities sold in the

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primary market. By bringing the buyers and sellers together, they create amarket. Such sales can take the form of best offers or agency arrangement.Best offers activity is resorted to in the case of either new or small companiesin whose case underwriting would be risky or established and popularcompanies whose issues are enthusiastically received. Investment bankersmay also help as a finder for private placement of securities with institutions.

They also purchase new issues from security issuers and arrange fortheir resale to the investing public. Investment bankers buy the new issue atan agreed price and hope to resell it at a higher price. In this capacity theyare said to underwrite, or guarantee, an issue. A group of investment bankersjoin together to underwrite a security offering and form what is called anunderwriting syndicate. The commission received by the investment bankersconsists of the differential or spread between purchase and resale prices.The underwriting risk would be that the issue may not attract buyers at apositive differential. Some of the investment banking firms like Merrill Lynchand Fenner and Smith perform brokerage services. Merrill Lynch providesreal estate financing and investment advisory services. Firms like SalomonBrothers and Goldman Sachs are investment banking firms that limit theirretail brokerage activities.

Before the underwriting process is completed the issuer and the investmentbank have to comply with the Securities Act, 1933 dealing with new or primaryissue of securities, a companion legislative piece to the Securities and ExchangeAct, 1934. The purpose of these two laws is to require security issuers tofully disclose all information that affects the value of their securities. Underthe Act the issuer has to file a registration statement with SEC prior to thesale and a red herring or preliminary prospectus to the issue. The registrationstatement must contain all relevant financial information about the issue andprospectus.

The exemptions to SEC Act are: (a) securities issued by US federalgovernment; (b) private placements; (c) interstate offerings; and (d) commercialpaper. SEC Rule 415 now permits experienced issuers the advantage of shelfregistration provided they meet certain criteria with regard to pre-registrationoffering.

Mergers and Acquisitions (M & A)For investment bankers M&A encompasses anything that affects thefundamental structure of the companies, the business of acquisitions, disposals,and the shape of the balance sheet in terms of long-term debt and equity. It isessentially what used to be called ‘Corporate Finance’.

The M&A wave in middle nineties, which has hit the markets around theglobe is fortunately based on fundamentals with greater focus by companies

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on strategic restructuring and the urge to earn global stature. Corporatemergers around the globe numbering 22,000 during 1996 were propelled byrecord stock prices and low interest rates. The value of mergers in 1996 at arecord $1.04 trillion surpassed by 25 per cent the record of $866 billion in1995. Regulatory changes and the threat of increased global competition areexpected to encourage in 1997 telecommunication companies, broadcasters,utilities and financial service companies among others to merge in order toreduce costs and increase revenue. Further, interest rates are expected tostay at a relatively low level to enable companies to borrow to buy othercompanies.

To realise economies of scale in technology and cut costs in administration,banks, fund companies and insurers resorted to mergers. Three of the topfive mergers in Europe in 1996 were of financial services companies. InUSA, telecommunications industry accounted for $120 billion in mergers. Radioand Television mergers, totalling $37 billion were the second largest. Mergeractivity in utilities industry on account to deregulation allowing electriccompanies to join natural gas providers at $32 billion was the third largest.

Merger mania has struck the investment banks too leading to removal ofbarriers between investment banking and other financial services. Investmentbanks have been traditionally wholesale banks and avoided dealing with public.The mergers have, however, involved the adoption of a retail approach. Apartfrom mergers of investment banks with others, investment banks and brokersare teaming up. After merger, giant investment banks are emerging with fundmanagement, securities trading and credit card business. The changes in theactivities of investment banks are influenced by the need to diversify thesource of their earnings to compete in share and bond underwriting which isquite lucrative with securities market firms. Further, fund management businessis a regular source of income and is more highly valued by the market thantrading and underwriting which is quite volatile. Investment banks have alsoadopted a retail approach to exploit the boom in mutual funds and retirementassets controlled by individuals sweeping across America and Europe in thenineties.

Global CustodyGlobal custody is a service provided by investment banks to local fundmanagers for cross border settlement and administration. It involves receiptof dividends and interest, subscribing to rights, issues and adjusting portfolios.

Custody is the unglamorous aspect of investment banking, the prosaicback office work of settling trades, making payments, keeping records andsuch related tasks. Investment banks provide this service for a fee to largeinvestors such as mutual funds, pension funds and insurance companies,

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enabling fund managers to buy and sell securities at home and abroad. It is ahi-tech, hi-volume, low margin business, revolutionised by advances in computertechnology and information exchange.

Global custody is growing at the rate of 15–20 per cent a year and exceeds$3 trillion of the $17 trillion of international securities investment. The primaryreason for such growth is the growing need to diversify beyond domesticmarkets to reduce risk and boost returns.

Custody fees are based on the value of assets under consideration. Withincreased competition, bank fees are falling to levels insufficient to coveroperating expenses. This is forcing a shake out in the industry with big namessuch as J.P. Morgan, Bank of America and the US Trust Corporation throwingin the towel on their custody business and deploying their energy and capitalelsewhere.

Proprietary Trading and Market MakingThe big changes in investment banking in the 90’s have increased competition,the advent of new technology and globalisation of capital markets. Increasedcompetition and new technology have set the margins to be earned fromtraditional financial mediation and compelled many investment banks toundertake proprietary trading. Several of the world’s largest investment bankshave $5–6 billion of equity which enables them to undertake proprietary trading.Globalisation demands large worldwide network to service governments andlarge firms.

Some investment banks have proprietary trading desks which makestraightforward wagers on financial markets by buying and selling securities.Secondly, market makers who buy and sell securities on behalf of customersoften hold an inventory of securities. If investment banks expect markets torise, they can take a bet by holding bigger inventories and by not hedgingthem against falling prices.

Shareholders have put pressure on investment banks to mend their waysby discounting the risks, since proprietary trading leads to wild swings inprofits from quarter to quarter and from year to year.

Some investment banks, such as Goldman Sachs and Salomon Brotherswho want to stay in proprietary trading have invested heavily in complex riskmanagement systems that should aid their understanding and control of tradingrisks. Others are taking risks of a different sort by moving into loan business,underwriting huge chunks of debt for companies to finance acquisitions andselling them later to other banks.

Some investment banks are using their capital to buy long-term stakes incompanies to sell them later at a profit. Securitisation consisting of buying

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such assets as mortgages and consumer loans, repacking them as bonds andselling them at a profit is another activity. But securitisation has landed somebanks, among them Bear Stearns, Lehman Brothers, and Salomon in losseswhen the prices of their inventories and of mortgages fell in 1994. In 1980’ssome banks such as First Boston (since renamed CS First Boston) cameunstuck when the values of its portfolio of bridge loans to finance leveragedbuyouts collapsed.

Niche BusinessSome investment banks have a clutch on niche business such as trading ingold bullion (Rothchild has a franchise since the early 19th century), financingmining houses in America and Australia (again Rothchild), advising governmentson privatisation (Schroders and Rothchild), and trading in bonds denominatedin Australian and New Zealand dollars (Hombros).

Fund ManagementInvestment banks provide fund management services. Funds undermanagement of Schroders have swollen five-fold to 74 billion pounds in theten years to the end of 1995. Fund management contributes to nearly half ofSchroders annual profits. Flemings manages 60 billion pounds, Rothchild 17billion pounds and Hombros, 8 billion pounds.

Advisory ServicesSeveral investment banks have long standing relationships with governmentsand firms. Their advise is sought because these banks are not big traders anddistributors of securities (Hombros) or do not have a commercial bank parent(e.g. Schroders and Flemings).

Extension of CreditAfter the stock market crash and consequent drop in M&A and equitiestransactions since 2000 the extension of credit through loans; bonds andcommercial paper has returned to the centre stage of the investment bankingbusiness.

A fallout of the credit crisis in 2007 and 2008 and the collapse of thesecuritised debt and housing mortgages was the implosion of investment bankingmodel. There are no investment banks on Wall street. Two universal bankshave taken the place of the two survivors, Goldman Sachs and Morgan Stanley.After the infusion of government capital they have become banks.

UNIVERSAL BANKING

A good deal of interest is generated in India in the concept of universal bankingin view of the expansion of the activities of all India development banks into

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traditional commercial banking activity such as working capital finance andthe participation of commercial banks in project finance, an area earlierconfined to all India as well as state level financial institutions. Further, thereforms in the financial sector since 1992 have ushered in significant changesin the operating environment of banks and financial institutions driven byderegulation of interest rates and emergence of disintermediation pressuresarising from liberalised capital markets. In the light of these developments,the Reserve Bank appointed a Working Group (Chairman Shri S.H. Khan) inDecember 1997 to examine and suggest policy measures for harmonising therole and operations of development finance institutions and banks.

DEFINITION OF UNIVERSAL BANKING

Universal banking refers to the combination of commercial banking andinvestment banking including securities business. “Universal banking can bedefined as the conduct of range of financial services comprising deposit takingand lending, trading of financial instruments and foreign exchange (and theirderivatives) underwriting of new debt and equity issues, brokerage, investmentmanagement and insurance.”7 The concept of universal banking envisagesmultiple business activities. Universal banking can take a number of formsranging from the true universal bank represented by the German model withfew restrictions to the UK model providing a broad range of financial activitiesthrough separate affiliates of the bank and the US model with a holdingcompany structure through separately capitalised subsidiaries.

REFERENCES

Bauer, Hans-Peter, “What is a Merchant Bank”, The Banker, London, July1976, pp. 795–799.

Bloch, Earnest, Inside Investment Banking, Dow Jones-Irwin, Illinois, 1986.

Commerce, “Momentum of Merchant Banking in India” Commerce, June 5,1976, pp. 835–837 and 857.

Francis, Jack Clark, Management of Investment, Second Edn., McGraw-Hill International.

7. Saunders, Anthony, A and Walter, Ingo, Universal Banking in the United States,Oxford University Press, New York, 1994, p. 84.

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Government of India, Report of the Banking Commission, 1972,pp. 396–398.

Ramachandra Rao B., “Merchant Banking”, Eastern Economist. February,1974, pp. 165–168.

Saunders, Anthony and Walter, Ingo Universal Banking in the United States,Oxford University Press, New York, 1997.

Skully, Michael, T., Merchant Banking in ASEAN, 1983, Oxford UniversityPress, Kuala Lampur.

Warren, Law, “Investment Banking”, in Altman, Edward I, Editor, Handbookof Financial Markets and Institutions, Sixth Edn., Wiley, New York, 1987.