Investment Banking System

The Investment Banking refers to a scheme where banks render long-term finance to run across the fixed working capital missive of the alphabet requirements. So it is likewise called industrial banking. The investment banker acts equally middlemen together with connects both the issues (public bodies equally good equally private draw of piece of job organisation firms) of securities who require working capital missive of the alphabet together with the ultimate investors (both institutional together with individual) who pick out surplus funds to invest. They channelize the savings together with facilitate the current of needed capital. Start upwardly together with expanding draw of piece of job organisation units, governmental together with non-governmental organizations seek the assistance of investment bankers to run across their finance requirements.

Industries require finance non solely for curt periods but likewise for long periods. For example, inward Bharat IDBI, UTI, LIC together with GIC are considered equally investment institutions. UTI mobilized funds past times introducing diverse schemes. LIC together with GIC collect premiums on insurance policies of life together with general. The coin then mobilized is invested inward shares together with bonds of companies.
Basically, the system  of investment banking was born inward Germany, it has spread to Kingdom of Denmark together with Switzerland. Investment banks are classified equally Originators,  Underwriters and Retailers. As originators, they convey out novel resultant of the securities together with equally Underwriters they nether write the resultant together with equally the retailers they retail the securities to private together with institutional investors. Under this scheme every lending is preceded past times through investigation. The banking company inspects the premises of industry, studies its plans together with provides finance solely subsequently it is fully convinced of the soundness of the industry.
As an investment banker, thus, performs a highly useful service to the draw of piece of job organisation the world past times providing the necessary working capital missive of the alphabet for providing long term working capital missive of the alphabet needs of industry. The investing populace are likewise benefited past times the activities of the investment banker. This is because of the independent together with comprehensive analysis, which he makes inward gild to estimate the desirability of securities, which they suggest to underwrite. Instances practice non wanting where unscrupulous bankers pick out cheated the populace thereby damaging the goodwill of the entire investment banking system, However it is gratifying to banker’s complaint that many countries pick out already enacted protective legislation providing for the prosecution of dishonest safety dealers.
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