Non-Fund Based Activities (Fee Based) 🗣️

These services rely on expertise rather than money. The income is Fee or Commission.

1. Merchant Banking 👔

Role: "Managers to the Issue".

• When a company wants to raise capital (IPO), Merchant Bankers manage the entire process.
• Functions: Drafting prospectus, pricing shares, marketing the issue, complying with SEBI rules.
• Examples: SBI Capital Markets, JM Financial, Kotak Investment Banking.

2. Credit Rating ⭐

Role: Grading the safety of debt instruments.

• Agencies rate bonds/debentures based on safety of repayment.
• Ratings: AAA (Highest Safety), AA, A, BBB... D (Default).
• Agencies in India: CRISIL, ICRA, CARE.
• Benefit: Helps investors decide where to invest.

3. Stock Broking 📈

Role: Buying/Selling shares for clients.

• Brokers are members of Stock Exchange (BSE/NSE).
• Services: Trading account, Demat account, Research reports.
• Income: Brokerage fee.

4. Letter of Credit (LC) 🌏

Role: Guaranteeing payment in international trade.

• Bank guarantees to foreign seller that Indian buyer will pay.
• If buyer fails, Bank pays.
• Fee: LC Commission.

5. Bank Guarantee (BG) 🛡️

Role: Guaranteeing performance or payment.

• Performance Guarantee: Contractor guarantees to Govt that he will build the bridge on time. Bank backs this promise.
• Financial Guarantee: Guaranteeing repayment of loan.

6. Corporate Advisory 🤝

Role: Business advice.

• M&A Advisory: Helping companies merge or acquire others.
• Project Advisory: Feasibility studies for new projects.
• Tax Advisory: Tax planning.

Quiz Time! 🎯

💡 Final Wisdom: "In Non-Fund services, you pay for the 'Brain' (Advice/Guarantee), not the 'Wallet' (Loan)!" 🧠💡

Next up: Modern Financial Services - Trends & Innovations! 🚀