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How to Get a Merchant Banking License in India

Narendra Kumar

| Updated: Jan 24, 2018 | Category: Startup

Merchant Banking

Getting Merchant Banking License in India is 100% online Process and an entirely follow of application will route thru SEBI Regulations.

What is Merchant Banking License?

An application by a person for grant of Certificate or License shall be made to SEBI in Form A. The application shall be accompanied by a non-refundable fee.

Consideration of Application for Merchant Banking License:

  • The applicant is a fit & proper person.
  • The applicant shall be a Body Corporate other than an NBFC as defined under Clause (f) of Section 45-I of RBI Act, 1934 as amended from time to time.
  • The applicant should have the necessary infrastructure like adequate office spaces, equipment’s & manpower to efficiently discharge his activities.
  • Applicant has in employment a minimum 2 persons who have relevant experience to conduct the business of Merchant Banker License.
  • A person directly/indirectly connected with the applicant has not been granted registration by Board.
  • The applicant fulfills the capital adequacy requirement required (5 Crore)
  • The applicant his partner, director or principal officer is not involved in any litigation connected with the securities market which has an adverse bearing on the business of the applicant.
  • The applicant, his director, partner or principal officer has not at any time been convicted of any offense involving Moral Turpitude or has been found guilty of any economic offense.
  • The applicant has the professional qualification from any institution recognized by Gov. of India.
  • Grant of Certificate to the applicant is in the interest of investors.

The Board, on being satisfied that the applicant is eligible, shall grant a certificate of initial registration in Form B & shall send an intimation to the applicant.

The Certificate shall be valid for a period of 5 years from the date of issue of the applicant.

*Application for permanent registration shall be dealt with in the same manner as if it were a fresh application for grant of a certificate of initial registration

Prerequisites for Merchant Banking License:

  • Every Merchant Banker shall abide by the Code of Conduct as specified in Schedule III.
  • Merchant Banker not to associate with any business other than that of the securities
  • A Merchant Banker who has been granted Certificate to act as primary or satellite dealer by RBI[1] may carry on such business as may be permitted by RBI.
  • Every Merchant Banker shall after the end of each accounting year furnish to Board copies of Balance Sheet, Profit & Loss Account, and Auditor Report & Statement of financial position when required by the board. They should also be maintained for a period of 5 years.
  • Every Merchant Banker shall submit to Board complete particulars of any transaction for the acquisition of securities of any corporate body whose issue is being managed by him within 15 days from the date of entering into the transaction.
  • Every Merchant Banker should submit a periodic report in such manner as may is specified from time to time.
  • Every Merchant Banker shall appoint a compliance officer who shall be responsible for monitoring the compliance of Act, rules & regulations issued by Board for redress of grievances of investors.

*A merchant banker who contravenes with any of the provisions of the Act, Rules or Regulations framed thereunder shall be liable for one or more actions specified therein under rules specified in this behalf.

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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