| Services to Non-Resident Indians:
In order to attract foreign capital resources for being invested in India, Union Government has offered various incentives to Non-Resident Indians (NRIs) and Persons of Indian Origin Resident Abroad (PIORA). Merchant banks provide special services on this account to encourage the NRIs to invest their savings in Indian industry.
The services include:
(i) Advice on selection of investment.
(ii) Critical evaluation of investment portfolio.
(iii) Securing approval from RBI for the purchase/sale of securities.
(iv) Hold securities in safe custody.
(v) Maintaining investment records and complying with ceiling requirements.
(vi) Collecting and remitting interest and dividend on investment.
(vii) Providing tax counselling and filing tax returns.
(viii) Evaluation of investment portfolio periodically at the request of investors.
(ix) Circulation of investment news for the benefit of the investors.
Function # 5. Issue Management:
In the past, the functions of a merchant banker had been mainly confined to the management of new public issues of corporate securities by the newly formed companies, existing companies (further issues) and foreign companies in dilution of equity as required under FERA.
In this capacity, the merchant bank usually acts as a sponsor of issues. They obtain consent of the Controller of Capital Issues (CCI) now, SEBI and provide a number of other services to ensure success in the marketing of securities.
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