As per SEBI’s guidelines, issued way back in 1992, a “merchant banker” means any person who is engaged in the business of issue management either by making arrangements regarding selling , buying or subscribing to securities as manager, consultant, adviser or rendering corporate advisory service in relation to such issue management.’
Recently,there was an article in FINANCIAL EXPRESS dated 27th May 2011 on the subject matter.It was titled :” Rating Those Merchant Bankers.”
To read the article,go to the following link:
I had sent my views on the topic to the Editor of FE .Todays issue of FE,carries my letter under the Letters to the Editor column.
Here is what is published in FE :L
etters to the editor
The Financial Express
Posted: Monday, Jun 06, 2011
Apropos of the column ‘Rating those merchant bankers’ (FE, May 27), merchant bankers in India have often been criticised. Some of them have personal relationships with a company management’s top honchos; some don’t downgrade a company promptly enough after noting discrepancies; some suddenly lower a credit score of a company and which can result in a vicious cycle, since, by its action, not only interest rates for the company would go up but also other contracts under consideration with financial institutions are likely to be affected, causing not only an increase in expenditure but also a decrease in its credit worthiness. In light of the above, it is suggested that a system must be put in place whereby all major merchant bankers agree to sign a mandatory code of conduct. Let’s hope Sebi will show willingness to bind the merchant bankers.
JS Broca, New Delhi
To read the letter on FE’s website,go to the following link:
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