Procedure for Registration of Merchant Bankers With SEBI

Priya Gandhi

Priya Gandhi

Published on: Feb 10, 2026

Aakanksha Singhal

Updated on: Feb 10, 2026

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Registration of Merchant Bankers (MBs) in India, is regulated by the Securities and Exchange Board of India (SEBI), via SEBI (Merchant Bankers) Regulations, 1992.

Categories of Merchant Banker

Applicable Provisions:

1. Regulation 3, 4, 5, 6, 6A, 7, 7A, 8, 9A, 10 of SEBI (Merchant Bankers) Regulations, 1992
2. Para 1 of Master Circular for Merchant Bankers Registered with SEBI

Mandatory Requirements:

1. Applicant must:
   • Be a body corporate (like a company or LLP*)
   • Satisfy the ‘Fit and Proper Person’ criteria (including its directors, partners, or principal officers)
   • Have at least two employees who are professionally qualified in finance or law or accountancy or business management
   • Such employees and Compliance Officer, possess prescribed certification
   • Meet the capital adequacy and liquid NW requirements
2. Ensure availability of adequate office space, equipment (computer systems, internet), and manpower.
3. Key personnel must not have adverse litigation related, to the securities market and no convictions for moral turpitude or economic offences.

* Note: Individuals, HUFs, trusts, AOPs, and partnership firms (unincorporated), Body corporate incorporated outside India other than a foreign bank licensed by RBI, OPC, NBFC, cannot act as merchant bankers.

Procedure:

1. Ensure Meeting Capital Adequacy and Net Worth Requirements:
   Applicant shall ensure that the capital adequacy and liquid NW requirements, as specified below are fulfilled:
   • Capital Adequacy requirements shall be NW not less than:
     • Rs. 50 crores for Category I Merchant Banker and
     • Rs. 10 crores for Category II Merchant Banker
   • Liquid NW requirements shall be NW not less than:
     • Rs. 12.5 crores for Category I Merchant Banker and
     • Rs. 2.5 crores for Category II Merchant Banker.
2. File Registration Application:
   Applicant must make an online application, to SEBI, in Form A (Application for Grant of Certificate of Registration), through SEBI Intermediary Portal, along with:
   • Supporting documents mentioned in the First Schedule, and
   • Prescribed non-refundable fee, as specified in Part A (Amount to be Paid as Fees) of the Second Schedule, which must be paid using the method specified in Part B of the same Schedule.
   Note:
   • Weblink for making application: (https://siportal.sebi.gov.in)
   • User Manual for Registration is available at https://siportal.sebi.gov.in/intermediary/index.html
   • Applicants must pay the required fees via direct bank credit through the online SEBI Payment Gateway
3. SEBI to Seek Clarifications:
   
   • SEBI can demand any additional information or clarification it deems necessary.
   • If requested by SEBI, the applicant (or its designated principal officer) must appear before SEBI for a personal interview/representation.
   • SEBI can reject the application if it finds grounds to do so. However, the applicant will be given a fair chance to be heard before the rejection is finalized.
   • The rejection decision must be communicated to the applicant within 30 days.
4. Grant of Merchant Bankers Registration Certificate:
   • Category-Specific Approval: SEBI will grant a certificate, under a specific Category (I or II), only if it’s satisfied that the applicant, meets all the rules, outlined in the Merchant Bankers regulations.
   • Final Registration: Once the applicant, pays the required registration fee (as detailed in the Second Schedule), SEBI will officially grant the Certificate of Registration in Form B, which shall be valid until Merchant Bankers is wound up.
5. Key Note Points for Merchant Bankers:
   • Merchant Bankers shall:
     • Abide by Code of Conduct as specified in Schedule III
     • Abstain to act for its Associate or to act as such in its own issue
     • Abstain to act as such, in an issue, where shares are held by its KMP or their relatives.
   • List of activities of MBs:
     • Primary function involves acting as the lead manager or book runner for the public issue of securities (IPOs and FPOs), rights issues, and buybacks
     • Professional services extend to underwriting obligations, where the MB, guarantees the subscription of a minimum portion of the issue, thereby absorbing the risk of under-subscription by the public
     • Conduct of comprehensive due diligence, on the issuer company, to ensure that the DRHP, contains true and fair disclosures
     • Advisory roles encompass corporate restructuring, mergers and acquisitions (M&A), and project counselling, providing strategic guidance on capital structure, financial engineering, and compliance with the Takeover Code
     • Market interface activities include managing investor grievances, coordinating with various intermediaries (registrars, bankers to the issue, and underwriters), and ensuring the timely allotment of shares and refund of application money.

Abbreviations Used:

1. IPO: Initial Public Offer
2. LLP: Limited Liability Partnerships
3. NW: Net Worth
4. HUF: Hindu Undivided Families
5. AOP: Association of Persons
6. RBI: Reserve Bank of India
7. OPC: One Person Company
8. NBFC: Non-Banking Financial Company
9. SEBI: Securities and Exchange Board of India
10. FPO: Further Public Offer
11. DRHP: Draft Red Herring Prospectus
12. KMP: Key Managerial Personnel