Underwriters, in the banking sector, perform the critical operation of appraising the credit of a potential customer and whether or not to offer loan. They appraise the credit history of the customer through their past financial records, statements and value of collaterals provided, among other parameters. Banks, at the time of allotment of shares and debentures by the companies, perform underwriting. It means, that the part of shares and debentures which is not bought by the public, the banks guarantee it to buy, and along with this, the company becomes free from the problem that what would be done in case the public won’t buy its shares and debentures.
