Which of the following Is NOT a function of Merchant Bank

Step 1: Analyze the question We are asked to find the option that is NOT a function of a merchant bank.

Step 2: Concept Merchant banks in Nigeria deal mainly with corporate clients and provide specialised financial services. Their typical functions include:

• Underwriting and issuing shares and securities for companies (this includes guaranteeing the purchase of shares)
• Granting medium and long-term loans to businesses
• Accepting bills of exchange (acceptance house function)
• Managing investment portfolios
• Giving financial and management advice, and handling mergers and acquisitions
• Equipment leasing and project finance

Implementing monetary policy is not their job. That belongs to the Central Bank of Nigeria (CBN), which regulates the money supply, sets the Monetary Policy Rate, and supervises banks. Merchant banks are only subject to those policies.

Step 3: Check each option

• A. Helps public companies to issue new shares: This is a function (issuing house activity).
• B. Provision of medium and long-term loans: This is a function.
• C. They accept bills of exchange: This is a function (acceptance house activity).
• D. They guarantee the buying of shares: This is a function (underwriting).
• E. They implement government monetary policies: This is NOT a function of a merchant bank. It is the role of the central bank.

Exam tip: Whenever you see "implements monetary policy", "banker to the government", "lender of last resort", or "issues currency" in a banking question, think Central Bank. Merchant banks are about corporate finance: underwriting, issuing, acceptance, and medium or long-term loans.