Definition of Offshore banking

It refers to the banking system which is set up in specially demarcated zones which are separate from the domestic banking system and which raised funds for its operation from offshore or non-resident sources for investment in domestic and or third country projects.

It also refers to the banking operations that cover only non-residents and do not mix with the domestic banking. An off shore banking centre is a place where deliberate attempt is made to attract international banking by offering many concessions in the form of taxes and levies being imposed at lower rates or not being charged.

Definition of Merchant banking

A merchant bank may be considered as an institution which centers its operation on all or mostly in management of issue of various securities traded in stock exchange, underwriting, project counseling, corporate counseling in areas of capital restructuring or effective management of finance, amalgamations, mergers, takeovers, technical consultancy services, portfolio management, investment management, equipment leasing and providing venture capital etc.

Definition of Mixed banking

Commercial banking and investment banking combined together is referred to as mixed banking. These two types of banking are completely different from each other. Commercial banks are engaged in short-term financing while investment banks are engaged in log-term financing. Commercial banks’ deposits are of short duration and payable on demand or short notice.

Definition of Investment banking

Investment banks are institutions which assist commercial organizations in raising long-term capital through the sale of shares, stocks, debentures and bond. It is a system where banks arrange long-term funds for business and industry. They work both as financiers as well as underwriters. As financiers they themselves provide long-term funds to business and industry.