BANKING AFFAIRS

Detailed explanation-1: -A Merchant Banker is required to have a minimum networth of not less than Rs. Five Crore.

Detailed explanation-2: -Valuation report by registered valuer and a report by a Merchant Banker is required when issuing equity shares or preference shares under private placement. Valuation report is also required the companies raise investment from foreign shareholder. Valuation report is also mandatory for converting CCD to equity.

Detailed explanation-3: -To be a merchant banker, an applicant is required to pay a non-refundable application fee of Rs 50, 000 by way of demand draft drawn in favour of ‘Securities and Exchange Board of India’, payable at Mumbai. Such an applicant is required to have a minimum net worth of not less than Rs 5 crore.

Detailed explanation-4: -1. Category I Merchant Bankers: These merchant bankers can act as issue manager, advisor, consultant, underwriter and portfolio manager.