Merchant banks found their origin in the early periods in the country of Italy by Italian merchants. The main function of commercial banking services includes providing advice and financial services to both companies and individuals. These banks act as a kind of intermediary between the issuers of capital and the buyers of securities. These securities are issued by different companies on the stock exchanges to raise funds.

The need for commercial banking services

The economy of the country is often affected by different unpredictable conditions like inflation, unemployment, stagnation, etc. The need to sustain constant growth is necessary for corporations and individuals, which is only possible with a long-term strategy and financial options. Commercial banking services provide financial solutions and options.

These banks provide advisory services to clients based on a particular fee. They also provide other financial services to mergers and clients. It is the only financial institution that invests its capital in the company of its clients. It acts as an intermediary between those who have capital and those who need capital.

To help its customers with a number of financial options, commercial banking services operate in various countries around the world. In this way, clients have the opportunity to explore the different financial options to ensure better growth.

Functions of Commercial Banking Services

These banks have a number of functions and some of the most important include:

  • Fundraising: One of the main functions of this banker includes helping the clients’ company raise funds from the markets. Banks help manage stock offerings and debt. This function also includes underwriting support, issue pricing and marketing, stock listing, allotment and redemption, registration of offering documents, etc.
  • Offer advisory services: These banks also offer advisory services to their clients for a proposed fee.
  • Security distribution: The functions of these banking services also include the distribution of different types of securities such as fixed deposits, shares, mutual fund products, commercial paper and debt instruments.
  • Grants in projects: These banks also provide assistance in projects undertaken by clients by helping them to visualize the concept of the project. The feasibility of the project is also analyzed by these banks. Clients also receive support in preparing project reports.
  • General financial reconstruction: commercial banking services provide better options and financial solutions to customers. They help customers raise funds through cheaper resources. With the help of other financial institutions, these banks also help revive ailing units of client companies.
  • Offer advice on risk management: Another important function performed by these banks is to provide timely advice on risk management. The merchant banker provides advice on the different strategies adopted by clients.

Today, commercial banking services provide a number of other services such as loan syndication, credit acceptance, merger and acquisition advice, portfolio management, etc. They also help companies with short-term liquidity funds. In a nutshell, these banking services are indispensable as they help individuals and companies to expand their businesses.