Merchant banks are private financial institution or an organization which provides a number of services collectively with supervision of securities issues, portfolio management, hold of capital market institute, insurance, economic advices, project analysis, depository services etc. Here is a difference between a commercial bank and a merchant bank. The merchant banks mostly suggest financial services for a payment. While commercial banks agree to deposits and contribution of loans. The merchant banking does not act as repositories for investments of the persons.
Functions of Merchant Banking:-
Depository Services is the investment securities both in certificated or uncertificated form. In the depository system, securities are held in accumulate accounts, which are like to holding funds in bank accounts. Rearrange of ownership of securities is done through simple account transfer.
Types of Depository Services: - 2 Types of Depository Services.
1- NSDL (National Securities Depository Limited)
2- CDSL (Central Depository Services Limited)
NSDL (National Securities Depository Limited): - This is the earliest central securities depository in India based in Mumbai. It is promoted by institutions of nationwide in charge for the financial development of India.
NSDL is promoted by NSE (National Stock Exchange), IDBI (Industrial Development Bank of India Limited), UTI (Unit Trust of India)
SBI, HDFC Bank, Axis Bank, OBC, Dena Bank, Canara Bank, Union Bank of India etc.
CDSL (Central Depository Services Limited): -This is the second Indian central securities depository based in Mumbai.
CDSL is promoted by Bombay Stock Exchange (BSE), State Bank of India (SBI), Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, and Union Bank of India.