Question

Which among the following is not true with regard to merchant banker?
i.It can accept deposits.
ii.It can advance loans.
iii.It can do other banking activities.
iv.It can be manager to a public issue.

• A. (i), (ii) and (iii)
• B. (ii), (iii) and (iv)
• C. (i), (iii) and (iv)
• D. (ii) and (iv)

Answer 1

The correct option is A (i), (ii) and (iii)

Merchant banks are financial institutions and companies that deal with international finance for multinational corporations. These banks differ from other types of financial institutions. As such, they don't deal with the general public. Unlike retail or commercial banks, merchant banks do not provide financial services to the general public. Merchant bankers are in charge of the issue process. They act as intermediaries between the company and the investors. They are also responsible for preparing the prospectus and marketing the issue.

The following points are not true with regard to merchant bankers:-i. It can accept deposits.
ii. It can advance loans.
iii. It can do other banking activities.Hence, option (A) is the correct answer.