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WELCOME
Capital as such is not evil; it is its wrong use thatis evil. Capital in some form or other will alwaysbe needed.
Mahatma Gandhi
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MERCHANT BANKING
FACTORING AND VENTURE CPTL
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DEFINITION OF MERCHANT
BANKING An institution which covers a wide range of activities
such as management of customer services, portfoliomanagement, credit syndication, acceptance credit,counselling , insurance etc.
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SERVICES OF MERCHANT BANKS Corporate counselling
Project counselling
Loan syndication
Issue management
Portfolio management
Non resident investment
Off shore finance
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FACTORINGDEFINITION:
Factoring is a service of financial nature involving the
conversion of credit bills into cash.
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FUNCTIONS Purchase and collection of debts
Credit investigation and undertaking of credit risk
Sales ledger management Provision of finance against debts, and
Rendering consultancy services.
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TYPES OF FACTORING Full service factoring or without resource factoring
With recourse factoring
Maturity factoring Bulk factoring
Invoice factoring
Agency factoring
International factoring
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VENTURE CAPITALDEFINITION:
A financing institution which joins an entrepreneur
as a co-promoter in a project and shares the risks andrewards of the enterprise.
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SCOPE OF VENTURE CAPITAL Development of an idea-seed finance.
Implementation stage-start up finance.
Fledging stage-additional finance. Establishment stage-establishment finance.
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MONEY MARKET
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DEFINTIONThe money market is the collective name given to thevarious firms and institution that deal in the variousgrades of near market.
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MONEY market Vs CAPITAL market It is a market for short
term.
The central bank andcommercial banks arethe major institutions.
They do not have
secondary markets. Transaction mostly takes
place over the phone andthere is no formal place.
It is a long term fundsmarket
Development banks andinsurance companiesplay a major role.
Deals with instruments
like shares, debentures. Transaction have to be
conducted only throughauthorised dealers.
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CHARACTERISTIC FEATURES Highly organised banking system.
Presence of a central bank.
Availability of proper credit instruments. Existence of sub markets.
Ample resources.
Existence of secondary market.
Demand and supply of funds.
Other factors.
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COMPOSITION OF MONEY MARKETCALL MONEY MARKET.
COMMERCIAL BILLS MARKET OR DISCOUNT
MARKET.ACCEPTANCE MARKET.
TREASURY BILL MARKET.
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CALL MONEY MARKETHigh liquidity.
High profitability.
Maintenance of slr.Safe and cheap.
Assistance to central bank operations.
DRAW BACKS
Uneven development.
Lack of integration.
Volatility in call money rates.
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COMMERCIAL BILLSDEFINITION
An instrument in writing containing an unconditional
order, signed by the maker, directing a certain personto pay a certain sum of money only to, or to the orderof a certain person or to the bearer of the instrument.
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TYPES OF COMMERCIAL BILLSDemand and usance bills
Clean bills and documentary bills
Inland and foreign billsExport bills and import bills
Indigenous bills
Accommodation bills and supply bills.
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MERITS AND DEFECTSSafety
Liquidity
Ideal short terminvestment
Ideal fund management
Statutory liquidityrequired
Source of short termfunds
Hedging facility.
Poor yield
Absence of competitivebids
Absence of activetrading.
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THANK YOU.