When does a bank become guarantor or under-writer?

1.	When does a bank become guarantor or under-writer?
Answer» When a new company enters the capital market and collects funds through shares it is afraid if it will be able to collect at least a minimum subscription to start the business. In such situations it requests the bank to become a guarantor or say under-writer that in case if it cannot raise sufficient money from the market the bank will fulfill the deficit by investing in the company.

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