Report on Function of Merchant Banking Activities

28/02/2013 13:27

A merchant bank differs from a regular investment bank as it generally deals in the commercial banking requirements of international finance as well as stock underwriting and long-term corporate loans. A merchant bank is known as a wholesale bank and isn't used by the general public. Most merchant banks deal with large corporations as well as with other merchant banks, large financial institutions and, sometimes, various governments around the world. There are several major functions that a merchant bank carries out.

Lease financing is a new concept in Bangladesh. Lease financing was first introduced in Bangladesh in the early 1980s. The idea of setting up an equipment leasing company in Bangladesh was first discussed in a meeting of the shareholders of Industrial Promotion and Development Company of Bangladesh Limited (IPDC) held in Washington D.C. in November 1983. The International Finance Corporation (IFC) as one of the shareholder in IPDC, and a pioneer in the promotion of leasing operation in the developing countries came forward to assist IPDC in setting up the leasing company in Bangladesh.

The Korea Development Leasing Corporation (KDLC) of which IFC was a shareholder, was identified as a technical partner for the proposed venture. Joint appraisal missions quickly followed and with the active support of the Government of Bangladesh. Industrial Development Leasing Company of Bangladesh Limited (IDLC) commenced its journey in 1985, as the first leasing company of the country. In 1995, IDLC was licensed as a Financial Institution by the country’s central bank, Bangladesh Bank, following the enactment of the Financial Institution Act 1993. Over the last two decades, IDLC has grown in tandem with the country’s transition into a developing country and has emerged as Bangladesh’s leading multi products financial institution. The company now offers a host of diverse financial services and solutions to both institutional and individual clients, to meet their unique requirements.

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