Merchant Banker is a company that is a combination of consultancy and banking services. Activities of the merchant banker in India are regulated by SEBI (merchant banker) rule 1992.

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As per SEBI rule:

Any person who is engaged in the business of issue management either by making arrangements regarding buying, selling or subscribing to securities or acting as manager, consultant or rendering corporate advisory services in relation to such issue management.

It may perform some of its services like an investment bank but can’t an as regular bank. These are specialized bankers who accept and underwrite or syndicate equity or bond issues.

Services provided by merchant banker:

• Counselling the project
• Estimating the funds required for the project
• Forecasting and market survey
• Fundraising from the capital market
• Fundraising through new investment
• Merger and amalgamation
• Loan syndication
• Financing for working capital
• Venture capitalist
• Lease financing
• Factoring

Categories of the Merchant Banker

Process, fee & forms for the license of merchant banker:

• No person shall carry on the activity as a merchant banker unless he holds a certificate granted by SEBI
• A merchant banker is required to have a minimum net worth of not less than 5 crore
• An applicant is required to send an application form Along with additional information along with a non-refundable fee of 50000 by way of a demand draft.
• Every merchant banker is required to pay 20 lacks as a registration fee (as per SEBI regulation, 2014) at the time of grant of the certificate of initial registration by SEBI.

And this certificate of initial registration remains for 5 years. The merchant banker has to apply for the grant of the certificate of permanent to SEBI, 3 months before the expiry of the validity of the certificate of initial registration, if it wishes to continue as registration, a merchant banker.

• For permanent registration, the merchant banker is required to pay 9 lacks for the first block of 3 years towards permanent registration payable in term of schedule iii of SEBI regulation 1992.
• Merchant banker is required to take SEBI’s prior approval for change in control.

ADDITIONAL INFORMATION SHEET

In addition to the information furnished in Form A, the applicant is also required to furnish detailed information on the following areas, as per the instructions contained therein.

• Memorandum and Article of Association of the applicant
• Provide the UIN obtained under MAPIN for the applicant.
• Details of Directors/ Promoters & shareholding pattern
• Details of Key personnel
• Details of infrastructure facilities
• Details regarding registration as NBFC
• Financial Accounts of the Applicant
• Report from principal bankers
• Details of associated registered intermediaries
• Undertakings
• Enclosures
• Declaration by at least two directors