STUDY OF INVESTMENT BANKING BY- PRATHMESH KELUSKAR R No:- 13.T.Y B&I.
INDEX Introduction to bank. Indian banking –Introduction. State bank of India. Function of bank. Concept of investment bank. Role of investment bank. Investment management. Investment managers and portfolio structures. Recent trends in investment Banking.
INTRODUCTION *Introduction to Banks:-The bulk of all money transactions today involve the transfer of bank deposits. Depository institutions, which we normally call banks, are at the very centres of our monetary system. Thus a basic knowledge of the banking system is essential to an understanding of how money works.
Indian Banking:- Introduction The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring and shortcoming in the system. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting all higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.)
The journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Phase I
The General Bank of India was set up in the year 1786.
The East India Company established Bank of Bengal (1809),
Bank of Bombay (1840)
And Bank of Madras (1843) as independent units and called
it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial
Bank of India was established which started as private shareholders banks, mostly Europeans shareholders.
Phase II :- The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: * 1949 : Enactment of Banking Regulation Act. * 1955 : Nationalization of State Bank of India. * 1959 : Nationalization of SBI subsidiaries. * 1961 : Insurance cover extended to deposits. * 1969 : Nationalization of 14 major banks. * 1971 : Creation of credit guarantee corporation. * 1975 : Creation of regional rural banks. * 1980 : Nationalization of seven banks with deposits over 200 core.
This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimhama, a committee was set up by his name which worked for the liberalization of banking practices.
State Bank of India (SBI):- . The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951.
Functioning of a Bank:-Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public . repayable on demand or otherwise and withdrawable by cheques , draft, order or otherwise."Banks essentially perform the following functions :- Accepting deposits is one of the two major activities of the Banks. Lending money to the public. Apart from accepting deposits and lending money, Banks also carry out, on behalf of their customers the act of transfer of money - both domestic and foreign. To check out and transfer funds. Note issuing.
Branches:- The corporate center of SBI is located in Mumbai. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has about 10000 branches, well networked to cater to its customers throughout India.
Types of service provide:- ATM Services SBI provides easy access to money to its customers through more than 8500 ATMs in India. State Bank of India as well as the Associate Banks – State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc.. Subsidiaries:- The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries..
The Eight banking subsidiaries are:- * State Bank of Bikaner and Jaipur (SBBJ) * State Bank of Hyderabad (SBH) * State Bank of India (SBI) * State Bank of Indore (SBIR) * State Bank of Mysore (SBM) * State Bank of Patiala (SBP) * State Bank of Saurashtra (SBS) * State Bank of Travancore (SBT)
Products And Services:- Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi -Plus Scheme
Concept investment banks. The banking scenario in India is itself huge, covering the different facets of the economy. By and large, investment banks in India are itself an institution which generates funds in two different ways. The first manner in which it works is by drawing public funds via the capital market by way of selling stock in their company. The other way in which it operates is to seek for venture capital or private equity, as a substitute for a stake in their company.
Introduction:- An individual or institution which acts as an underwriter or agent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. Investment banks also have a large role in facilitating mergers and acquisitions, private equity placements and corporate restructuring. Unlike traditional banks, investment banks do not accept deposits from and provide loans to individuals. also called investment banker
Role of an Investment Bank The major work of investment banks includes a lot of consulting. For instance, they offer advices on mergers and acquisitions to companies. The role that an investment bank plays sometimes gets overlapped with that of a private brokerage house. The usual advice of buying and selling is also given by investment banks. There is no demarcating line between the investment banking and other forms of banking in India. This has been observed majorly of late. All banks nowadays want to provide their customers the best of services and create a niche for themselves and that is why apart from investment banks, all other banks too are aiming at making it big
Defining Short Term Investments:- A short term investment fund is a fund that earns you a return on your money in a short period of time, such as one to ten years. This is different than retirement investing, and it can be a challenge to find short team, high yield investments. Good short term investments will have a high interest rate, allowing you to earn substantial money immediately
You might need short term investments if you have a
pressing need coming up in the near future.
If, for example, you might need to have a down
payment for a house or car in a year or two, you could make use out of short term investment options.
Also, you might use this type of fund in replacement
of a traditional savings account, because you will earn a higher rate of return.
Main activities:- An investment bank is split into 3 parts . 1:-Front office 2:-Middle office 3:-And back office. .
Typically, an investment banking group nowadays provides, world-wide some or all of the following services, either in divisions of the bank or in associated companies within the group:- 1. Mergers and Acquisition Advisory 2. Private Placement of Debt and Equity 3. Securities Underwriting 4. Management of Capital issues 5. Management of Buyback and takeovers 6. Corporate Advisory Services 7. Project Advisory Services 8. Other services like Restructuring/Sales, Real Estate, Loan Syndication and so on.
The core services provided by the Investment banks are in the areas of debt market, equity market and advisory services:- The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance. In business or economics a merger is a combination of two companies into one larger company. Merger is a tool used by companies for the purpose of expanding their operations often aiming at an increase of their long term profitability. An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile.
STEPS TO REGISTER FOR INVESTMENT BANK INTERNET BANKING Login to www.investbank.ae Click on INTERNET BANKING Click on REGISTER NOW Enter the following information Your CIF NUMBER (First six digits of your account number) Your EMAIL ID (this email id must have been registered with the bank) Your desired INTERNET BANKING USERID Enter your PASSWORD Re-enter your PASSWORD to confirm
Authorized User should keep his/her USERID and PASSWORD CONFIDENTIAL at all times. He/she MUST not share this with or disclose to ANYONE. Authorized User will be responsible for all transactions conducted using this ID and PASSWORD. It is strongly recommended that the password should be changed frequently to avoid IMPORTANT misuse Click on the "I accept the above terms and conditions Click on SUBMIT Click on the PRINT Button to print the Registration Form. Complete the Registration Form (see section below for Access Rights restrictions) or have it signed by the authorized signatories and submit/fax it to the branch where your account is held. Branch/bank will verify your details and signatures and send you an email (on your registered email address) which will carry a link. Click on that link to select your desired PIN Once you have the password and the PIN you are ready to start using Investment Bank Internet Banking.
Investment Management:- Investment management is the professional management of various securities (shares, bonds and other securities) and assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking ". The provision of 'investment management services' includes elements of financial statement analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Coming under the remit of financial services many of the world's largest companies are at least in part investment managers and employ millions of staff and create billions in revenue
Investment managers and portfolio structures:- At the heart of the investment management industry are the managers who invest and divest client investments A certified company investment advisor should conduct n assessment of each client's individual needs and risk profile. The advisor then recommends appropriate investments. Asset allocation The different asset class definitions are widely debated, but four common divisions are stocks, bonds, real-estate and commodities. The exercise of allocating funds among these assets (and among individual securities within each asset class) is what investment management firms are paid for. Asset classes exhibit different market dynamics, and different interaction effects.
Recent trends in investment Banking:- In the early 1980s, the SEC introduced and made law a rule that permits well-known companies to register securities without a set sale date and delay the sale of the securities until the issuers expect their securities will have strong prices in the market. These registrations are known as "shelf registrations and have become an important part of investment banking. Shelf financing also contributed to the decline of the historic connections between specific corporations and investment banks. Nevertheless, it did not change the basic structure of the industry, which has retained the pyramid shape. The apex investment houses before the introduction of shelf financing by and large remained the apex houses afterwards. Contemporary investment banking is also influenced by the growth of institutional investors as key players in the securities market. Whereas institutional investors accounted for 25 percent of securities trade in the 1960s, they accounted for over 75 percent in the 1990s. In addition, the securities market has become more global.
QUESTIONNAIRE What interest rate provided in your bank? How to decide marketing strategy by deciding interest rate? What extra services you provide other than investment banking? What is the scope of investment banking in future? From how many years you doing investment banking?