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CHAPTER 1

INTRODUCTION
The term Merchant Banking has its origin in the trading methods of countries in the
late eighteenth and early nineteenth century when trade-taking place was financed by
bill of exchange drawn by merchanting houses. At that time the merchants were
merely financing their own activities. As international trade grew and other lesser-
known names wanted to import goods from abroad, the established merchants ‘lent
their names’ to the newcomers by agreeing to accept bills of exchange on their behalf.
The acceptance houses would charge a commission for this service and thus there
grew up the business of accepting bills of finance trade not merely of themselves, but
of others. Acceptance business thus became and to a degree always has been
hallmark of true Merchant Banks. Merchant Banking
The second historical of Merchant Banks was the raising of capital for foreign
Government. In many cases, the Merchant Banks have been trading in the countries
concerned and gained the confidence of Governments and other authorities in those
countries. Thus the second principal ingredient of Merchant Banking became and still
is raising of capital through the issue of stocks and bonds. Therefore, Merchant Banks
can be accepting houses or issuing houses or both. Merchant Banking started in the
beginning of 20th century in UK and USA. More recently, the services offered by
Merchant Banks have entered into the other areas of operations. Their role is wide
ranging and they can now provide most of the financial services required by a
company, touching almost all aspects of establishing and running of industrial units
on sound financial footing.
Dictionary meaning of ‘merchant bank’ refers to an organization that underwrites
corporate securities and advises such clients on issues like corporate mergers, etc.
involved in the ownership of commercial ventures. This organization may be a bank,
corporate body, firm or proprietary concern.

HISTORY OF MERCHANT BANKING


During the seventeenth and most of the eighteenth century international finance was
centred on Amsterdam. Consequently Amsterdam merchants became the first masters
of the various financial techniques and developments which, in the course of time,
became identified with the emergent profession of ‘Merchant Bankers’.
Commercial Banking and Investment Banking are often confused with Merchant
Banking. In many ways, there may be similarities in their functions. However, in
certain ways, Merchant Banking is distinctly different from commercial Banking and
Investment Banking.

Merchant Banking
The primary function of a commercial bank is to receive deposits from the public and
lend the same to others. Commercial Banks can undertake some of the merchant
banking activities like Issue Management whereas Merchant Banking Units can not
undertake commercial banking activities. However, the functions of Merchant
Banking may not widely vary from Investment Banking. The Merchant Banker
mainly deals with Issue Management, post issue services, corporate adviser services
etc. the Investment Banker undertaken trading in securities, Investment advises and
Bought out deals which are not the main activities of Merchant Bankers.

In todays Scenario the Merchant banker and management consultants undertake


advisory services to the corporate sector. The Merchant Banker advices corporation
and firms relating to opening of issues, receiving loans etc, which the management
consultants also do. The management consultant have a wide area operations like
recognition to undertake capital market related activities which has enabled the
merchant banker to cater to the needs of the Corporate Sector.
A merchant bank may be considered as an institution which centres its operation on
all or most of the following activities.
(1) Corporate financial advice, on such diverse matters as new share and bond
issues, capital reconstructions, mergers and acquisitions;
(2) The taking of deposits and currency, money market operations including foreign
exchange dealing;
(3) Medium-term lending and syndication of loans;
(4) Acceptance credits and all forms of export finance;
(5) The holding and dealing in quoted and unquoted investment; and
(6) Fund management on behalf of clients, most typically pension funds, unit trust,
investment trusts and wealthy individuals.
Example;
The East India Trading Company secured a
Royal Warrant from England, providing the firm with official rights to lucrative
trading activities in India. This company was the forerunner in developing the
crown jewel of the English Empire. The English colony was started by what we
would today call merchant bankers, because of the firm's involvement in financing,
negotiating, and implementing trade transactions. The colonies of other European
countries were started in the same manner.
For example, The Dutch merchant
adventurers were active in what are now Indonesia; the French and Portuguese
acted similarly in their respective colonies. The American colonies also represent
the product of merchant banking, as evidenced by the activities of the famous
Hudson Bay Company. One does not typically look at these countries' economic
development as having been fueled by merchant bank adventurers. However, the
colonies and their progress stem from the business of merchant banks, according to
today's accepted sense of the word. Merchant banks, now so called, are in fact the
original " banks". These were invented in the middle Ages by Italian grain
merchants. As the Lombardy merchants and bankers grew in stature on the back of
the Lombard plains cereal crops many of the displaced Jews who had fled
persecution after 613 entered the trade. They brought with them to the grain trade
ancient practices that had grown to normalcy in the middle and far east, along the
Silk Road, for the finance of long distance goods trades.
The Jews could not hold land in Italy, so they entered the great trading piazzas and
halls of Lombardy, alongside the local traders, and set up their benches to trade in
crops. They had one great advantage over the locals.

Christians were strictly forbidden the sin of usury. The Jewish newcomers, on the
other hand, could lend to farmers against crops in the field, a high-risk loan at what
would have been considered usurious rates by the Church, but did not bind the
Jews. In this way they could secure the grain sale rights against the eventual
harvest. They then began to advance against the delivery of grain shipped to distant
ports. In both cases they made their profit from the present discount against the
future price. This two-handed trade was time consuming and soon there arose a
class of merchants, who were trading grain debt instead of grain.

DEFINATION;
The first authoritative definition for the term ‘Merchant Banker’ has been given in the
Rule 2 (e) of SEBI (Merchant Bankers) Rules, 1922. Accordingly, “A Merchant
Banker means any person who is engaged in the business of Issue Management
either by making arrangements regarding selling, buying or subscribing to Securities
as Manager, Consultant, Adviser of rendering Corporate Advisory Service in relation
to such Issue Management”.

A British term for a bank that specializes not in lending out its own funds, but in providing
various financial services such as accepting bills arising out of trade, underwriting new issues,
and providing advice on acquisitions, mergers, foreign exchange, portfolio management, etc

The Notification of the Ministry of Finance defines a merchant banker as, “any
person who is engaged in the business of issue management either by making
arrangements regarding selling, buying or subscribing to the securities as manager,
consult, adviser or rendering corporate advisory service in relation to such issue
management”.

CHARATERISTICS;

1 The high proportion of decision makers as a percentage of total staff.


2 Quick decision process.
3 The high density of information.
4 Intense contact with the environment.
5 Loose organizational structure.
6 A concentration of short and medium term engagements.
7 Emphasis on fee and commission income.
8 Innovative instead of repetitive operations.
9 Sophisticated services on a national and international level.
10 The low rate of profit distribution.
11 High liquidity ratio.

EVOLUTION & EMERGENCE OF MERCHANT BANKING

India has entered the 21st century as one of the Asia’s most dynamic economies. This
is the part of the assessment made by International Financial and Capital Market
Institutions based on India’s economic and financial reforms initiated in 1991 and
brought to fruition in various budget.
The progress of any economy mainly depends on the efficient financial system of the
country. Indian economy is no exception financial system of the country. The
importance of the financial sector reforms affirms an effective means for solving the
problems of economic, financial and social in India and elsewhere in the developing
nations of the world. The progress of the Securities Industry of any country depends
mainly on the flow of funds. In fact, capital generation is the lifeblood of the capital
market without which the health and soundness of the financial system cannot be
geared and for which well-developed capital market as well as money market is
essential.

India’s capital market is among the largest in the developing world. The market is
comprised of 24 stock exchanges transacting long-term debt; debentures and equity
shares both electronic and physical forms. Derivatives financial instruments are also
be added to the market shortly. The number of firms listed on the Indian Stock
Exchange is more than the USA. Market Capitalisation of listed firms is 1980s was
similar to Brazil, Malaysia, Singapore and Denmark.
The capital market of the country, however, underwent dramatic changes since the
beginning of 1980s basically because of a progressive realization that the command
economy on which the emphasis was placed could not lead to higher levels of
economic development and that a slant towards a market-oriented economy is
necessary.
It is in the context of fast expanding economy and a liberalized and deregulated
atmosphere that the growth of the Indian Stock Market activities has to be viewed.
No wonder that the markets have registered a quantum jump judge by any standards.
MERCHANT BANKING IN INDIA

In India prior to the enactment of Indian Companies Act, 1956,managing agents acted
as issue houses for securities, evaluated project reports, planned capital structure and
to some extent provided venture capital for new firms. Few share broking firms also
functioned as merchant bankers.

The need for specialized merchant banking services was felt in India with the rapid
growth in the number and size of the issues made in the primary market. The
merchant banking services were started by foreign banks, namely the National
Grindlays Bank in 1967 and the City Bank in 1970. The Banking Commission in
its report in 1972 recommended the setting up of merchant banking institutions. This
marked the beginning of specialized merchant banking in India.

To begin with, merchant banking services were offered along with other traditional
banking services. In the mid-Eighties, the Banking Regulation Act was amended
permitting commercial banks to offer a wide range of financial services through the
subsidy rule. The State Bank of India was the first India Bank to set up merchant
Banking division in 1972. Later ICICI set up its Merchant Banking division followed
by Bank of India, Bank of Baroda, Canada Bank, Punjab National Bank and UCO
Bank. The merchant banking gained prominence during 1983-84 due to new issue
boom.

MERCHANT BANKING: PAST AND PRESENT

Many banks entered merchant banking in the 1960s to take advantage of the
economies of scope produced when private equity investing is added to other bank
services, particularly commercial lending. As lenders to small and medium-sized
companies, banks become knowledgeable about individual firms’ products and
prospects and consequently are natural providers of direct private equity investment to
these firms. As mentioned above, commercial banks were the largest providers of
venture capital in the 1960s. In the middle to late 1980s, the decision to enter
merchant banking was thrust on other banks and bank holding companies by
unforeseen events. In those years, as a result of the LDC (less-developed-country)
debt crisis, many banks received private equity from developing nations in return for
their defaulted loans. At that time, many of these banks set up merchant banking
subsidiaries to try to get some value from this private equity.
Also at about that time, most commercial banks began refocusing their private equity
investments to middle-market and public companies (often low-tech, already
profitable companies) and, rather than providing seed capital, financed expansion or
changes in capital structure and ownership. Most particularly, they took equity
positions in LBOs, takeovers, or recapitalizations or provided subordinated debt in the
form of bridge loans to facilitate the transaction. Often they did both. Commercial
banks financed much of the LBO activity of the 1980s.Then, in the mid-1990s, major
commercial banks began once again focusing on venture capital, where they had
substantial expertise from their previous exposure to this kind of investment. Some of
these recent venture-capital investments have been spectacularly successful. For
example, the Internet search engine Lycos was a 1998 investment of Chase
Manhattan’s venture-capital arm. Commercial banks are permitted to report either
realized or unrealized gains on their merchant-banking portfolios, as long as they are
consistent in the reporting. This option makes it difficult for one to compare different
entities’ financial results and could lead to an overly liberal reporting of profits.

NEED & IMPORTANCE IN INDIA

 Important reason for the growth of merchant banking is due to exerting excess
demand on the sources of funds forever expanding industry and trade.
 Corporate sector had the only alternative to avail of the capital market services
for meeting their long-term financial requirements through capital issues of equity
and debentures.
 With the growing demand for funds there was pressure on capital market that
enthused the commercial banks, share brokers and financial consultancy firms to
enter into the field of merchant banking and share the growing capital market
 In India have opened their merchant banking windows and are competing in this
field, and also doing advisory functions as merchant bankers as well as managing
public issues in syndication with other merchant bankers.
 Merchant banks can play highly significant role in mobilizing funds of savers to
investible channels assuring promising return on investments. activity.
 With the growth of merchant banking profession corporate enterprises in both
public and private, sectors would be able to meet the growing requirements for the
funds for establishing new enterprises, undertaking
expansion/modernization/diversification of the existing enterprises.
 Merchant banks have been procuring impressive support from capital market for
the corporate sector for financing their projects.
 In view of multitude of enactments, rules and regulations, guidelines and offshoot
press release instructions brought out by the Government from time to time
imposing statutory obligations upon the corporate sector to comply with all those
requirements prescribed therein, the need of skilled agency existed which could
provide counseling.
 Merchant bankers advise the investors of the incentives available in the form of
tax reliefs, other statutory relaxations, good return on investment and capital
appreciation in such investment to motivate them to invest their savings in
securities.
 Thus, the merchant bankers help industry and trade to raise funds, and the
investors to invest their saved money in sound and healthy concerns with
confidence, safety and organizations for higher yields.

TRADATIONAL MERCHANT BANKING

Merchant Banking, as the term has evolved in Europe from the 18th century to
today, pertained to an individual or a banking house whose primary function was
to facilitate the business process between a product and the financial requirements
for its development. Merchant banking services span from the earliest negotiations
from a transaction to its actual consummation between buyer and seller.
In particular, the merchant banker acted as a capital sources whose primary activity
was directed towards a commodity trader/cargo owner who was involved in the
buying, selling, and shipping of goods. The role of the merchant banker, who had
the expertise to understand a particular transaction, was to arrange the necessary
capital and ensure that the transaction would ultimately produce "collectable"
profits. Often, the merchant banker also became involved in the actual negotiations
between a buyer and seller in a transaction

MODERN MERCHANT BANKING

During the 20th century, however, European merchant banks expanded their
services. They became increasingly involved in the actual running of the business
for which the transaction was conducted. Today, merchant banks actually own and
run businesses for their own account, and that of others.
Since the 18th century, the term merchant banker has, therefore, been considerably
broadened to include a composite of modern day skills. These skills include those
inherent in an entrepreneur, a management advisor, a commercial and/or
investment banker plus that of a transaction broker. Today a merchant banker is
who has the ability to merchandise -- that is, create or expands a need -- and fulfil
capital requirements. The modern European merchant bank, in many ways, reflects
the early activities and breadth of services of the colonial trading companies.
Most companies that come to a U.S. merchant bank are looking to increase
their financial stability or satisfy a particular, immediate capital

GROWTH OF MERCHANT BANKING IN INDIA

Formal merchant banking activity in India was originated in 1969 with Merchant Banking
Division set up by the Grindlays Bank, the largest foreign bank in the country. The main
service offered at that time to the corporate enterprises by the merchant banks included the
management of public issues and some aspects of financial consultancy. Other foreign banks
like Citi Bank, Chartered Bank also assumed the merchant banking activity in India. State
Bank of India started merchant banking in 1973 followed by ICICI in 1974. Both these Indian
merchant bankers emerged as leaders in merchant banking having done significant business
during the ` 15 Merchant Banking period of 1974-1987 in comparison to foreign banks. The
early and mid-seventies witnessed a boom in the growth of merchant banking organizations in
the country with various commercial banks, financial institutions, broker’s firms entering in
to the field of merchant banking. The early growth of merchant banking in the country is
assigned to the Foreign Exchange Regulation Act, 1973 (FERA) where under large number of
foreign companies operating in India were required to dilute their foreign holdings in order to
continue business in the country. This had caused two-pronged effect viz. firstly, in the form
of spate in ‘Foreign Exchange Regulation Act Issues’ eliciting interest of the investors by
creating massive awareness about capital markets amongst the new class of investing public,
secondly, merchant banking activity became attractive to banks and the firms of consultants
and share brokers who entered into this fields vigorously to reap the advantages of the
expanding capital markets.

PLAYERS IN MERCHANT BANKING

1. ENAM-
ENAM was founded in1984 to provide knowledge-driven financial services at the time
when Indian economy investors faced a bewildering array of options. ENAM is the one
of the largest underwriters in India. ENAM offers promising & exciting companies the
opportunity of assessing the public market equity finances. ENAM’s long-term
association with capital markets & primary markets has provided it with deep insights of
the functioning of Indian financial institutions. The merchant banking services provided
by ENAM are: -  Equity debt/syndication: Raising capital through a private placement
of a company’s securities is an effective & timely offering to a public offering. ENAM
represents the clients in the private placement of debt and equity with institutional & high
net worth investors.  Corporate Restructuring: - ENAM provides client with strategic
and practical solutions to financial challenges. Their restructuring services includes
Mergers & Acquisitions, Takeovers, Debt restructuring, Buyers services etc. ` 43
Merchant Banking  ENAM also provide the seed stage services, value creation services
and IPO’s advisory services which are represented below:

2. ICICI SECURITIES:
ICICI Securities Limited is a leader across the spectrum of Merchant Banking. We are
experienced in every aspect of the business from domestic and international capital
markets advisory, to M&A advisory, Private Equity syndication, Restructuring and
infrastructure advisory. Our investment banking team, based across key cities in India
and New York, London, and Singapore consists of professionals with expertise across a
range of industries. ICICI SECURITIES provide following services:  Mergers and
Acquisitions: - ICICI Securities Limited is amongst the first Indian investment Banks to
form a dedicated M&A practice and continues to be a leader by providing innovative and
unique solutions to achieve varied objectives of the client. They offer a full range of
advisory services, which include joint ventures, mergers, acquisitions, and divestitures. 
Equity Capital Markets: - ICICI Securities Limited is at the forefront of capital markets
advisory having been involved in most major book building and fixed price offerings
over the last decade. It is amongst the leading underwriters of Indian equity and equity-
linked offerings. ` 44 Merchant Banking  Infrastructure Advisory: - ICICI Securities
Limited has a dedicated infrastructure vertical focused on assisting clients in identifying
and capitalising on the opportunities thrown up by the all pervasive boom in the Indian
infrastructure sector.  Dealing with Bulls and Bears: - ICICI Securities Limited assists
global institutional investors to make the right decisions through insightful research
coverage and a client focused Sales and Dealing team. The equity group leverages
research and distribution reach to domestic and foreign institutional investors in case of
public offerings. Thus the quality of analysis and client servicing standards, are a
testimony to the quality of ICICI SECURITIES team.

3. KOTAK SECURITIES LIMITED:


Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and
distribution arm of the Kotak Mahindra Group. The company was set up in 1994. Kotak
Securities is a corporate member of both The Bombay Stock Exchange and The National
Stock Exchange of India Limited. Its operations include stock broking and distribution of
various financial products - including private and secondary placement of debt and equity
and mutual funds. Currently, Kotak Securities is one of the largest broking houses in
India with wide geographical reach. The company has four main areas of business: 
Kotak Institutional Equities: - Kotak Institutional Equities, among the top institutional
brokers in India. It mainly covers secondary market broking and the marketing of equity
offerings, including IPOs, to domestic and foreign institutional investors.  Structured
Finance (Project Finance & Advisory Business): -KMCC has developed expertise in
various vertical segments in the infrastructure sector including power, oil, gas, ports,
automobiles, steel & metals and hotels, by offering structured finance solutions. Some of
the transactions executed by this team include: ` 45 Merchant Banking  Advisor to Ford
on financial closure for its Car project in India.  Advisor to one of the largest LNG
projects on the Western coast of India.  Financial advisors and loan syndications to
British Gas and GAIL.  Mergers & Acquisitions: -In the area of Mergers &
Acquisitions, we provide our clients expertise and a comprehensive set of services that
help them achieve their strategic and financial objectives. Our spectrum of services
include:  Divestments  Spin-Offs / Restructuring & Joint Ventures / Strategic
Alliances

4. CITIGROUP:
Citigroup Corporate and Investment Banking achieve the extraordinary for our clients
around the world. No financial institution is more committed to advancing the goals of its
clients—our diverse and talented staff in more than 100 countries advises companies,
governments and institutions on the best ways to realize their strategic objectives. We
create solutions for and provide the broadest possible capital and market access to
thousands of issuer and investor clients. And no institution better executes the
increasingly complex payment and cash management solutions required in today's global
economy. The features Citigroup are as follows: -  Over the years, Citigroup has
established a track record of outstanding business milestones such as Cash Management,
pioneered by Citigroup in 1986 and utilized by over 900 Corporates with through-puts
totaling around $ 35 billion (8% of India's GDP).  It is India's largest foreign bank in the
FX (foreign exchange) market with a 14 per cent market share.  As the leading
custodian, Citibank has over $22 billion of custody assets under management. ` 46
Merchant Banking

5. DSP MERRILL LYNCH LTD.:


DSP Merrill Lynch Limited (DSPML), among India's leading investment banking and
brokerage company, is a culmination of a long standing relationship between DSP Financial
Consultants Ltd., and Merrill Lynch & Co., the leading international capital raising, financial
management and advisory company. DSPML is a full service investment bank and broking
company with leadership position in M&A, Capital Raising, Securities Research, Equity &
Debt Brokering, and Investment Advisory services. Euro money Magazine has ranked
DSPML as the "Best Domestic Securities firm in India" for the last four consecutive years.
This Transaction heralds DSPML as a key player in the private equity market. The service
features of DSPML are as follows: -  DSPML has consistently been rated as one of India's
leaders in origination, distribution, and trading of equity and debt securities.  DSPML has
consistently brought reputable issues to the capital markets. ` 47 Merchant Banking  A
diverse client base made up of India's most prestigious private and public sector corporations
and multinational corporations have rendered DSPML a commanding presence in the Indian
capital market.  Through direct market's group, DSPML offers investors access to every
major initial or subsequent public offering.  DSP Merrill Lynch is the leading underwriter of
Indian equity and equity-linked offerings across domestic and international markets. By
leveraging their extensive knowledge of local markets and global resources, they have delivered
innovative and customized solutions to their clients.

6. UPFC (Uttar Pradesh Financial Corporation) Scheme for merchant banking


& financial:
Decades ago UPFC has taken a humble step for the industrial development of U.P. by
providing term loan assistance to small & medium scale units. Since then it has acquired a
matured professional approach in Industrial Financing, several smallscale units nurtured by
UPFC has groomed into big enterprises. In order to meet the challenges of liberalized policy
of the Government & Changed economic Scenario, UPFC has started Merchant Banking &
other financial Services to serve its valued clients. UPFC, a category-I Merchant Banker with
unmatched expertise in project appraisal and term lending offers a whole gamut of Merchant
Banking Services. 1. Issue management: UPFC provides expert services to manage public
issues of the companies successfully; it has already managed Public Issues as a lead Manager
with great success. 2. Underwriting: In order to provide a protective umbrella to the public
issues of its clients, UPFC also underwrites the issue. ` 48 Merchant Banking 3. Subscription
to equity share: UPFC subscribes to the equity shares reserved under FI quota, to enable the
company to market the public issue effectively. 4. Advisory services: UPFC, with its long
experience, advises its clients for various advisory services such as capital Structuring, loan
syndication etc. 5. Project certification: UPFC also certifies the projects going to capital
markets for raising funds. This is a specialized activity of the Corporation. 6. Other financial
services: As a part of its commitment to provide professionalized financial services to its
clients, UPFC also offers Bill Discounting, Equipment Leasing & Hire Purchase Services,
Short- term loan, Brand Equity loan, etc to meet diversified requirements of it's clients

7. JM Morgan Stanley Investment :


Banking focuses on capital raising, mergers, acquisitions, restructuring and financial advisory
and private equity for Indian corporates in the international and domestic capital markets.
Through innovation and value-added services, the firm has contributed immensely to the
overall development of the capital market and mergers and acquisitions in India. It have the
merchant banking and underwriting licenses from the Indian securities market regulator, the
Securities and Exchange Board of India. Some of the recent transactions of JM Morgan
Stanley  US$ 20MM fund raising for Nipuna Services (a BPO subsidiary of Satyam Computer
Services) ` 49 Merchant Banking  Rs. 3,219 MM preferential allotment of equity shares/
warrants in Bajaj Auto Finance Limited to financial investors and the promoter, Bajaj Auto
Limited. The services of JM Morgan Stanley are:  JM Morgan Stanley has a dedicated group
that regularly interacts with over 40 financial investors in India as well as overseas.  JM
Morgan Stanley offers research-based investment advisory and equity broking services to
corporates, high net-worth individuals and retail investors across a wide range of financial
products.  They are known for lead managing some of the most complex and innovative and
large equity and debt offerings in India and abroad by the Indian issuers. A robust deal-flow
across sectors has allowed them to build significant traction with the financial investors. This
helps in raising private equity capital for the companies.

8. DECCAN MERCHANT CO-OPERATIVE BANK

CREDIT FACILITIES:
 For Business
 Construction Tools Credit
 Auto Credit
 Business Vehicle Credit
 Credit against Gold

SAVING SERVICES

 Recurring Deposits
 Fixed Deposits

ENDOWENT FACILITIES
 Life Insurance
 General Insurance
 Demat Account Services
 Mutual Funds
 Licensed Banking
 Smart Bussiness Facilities

ACCOUNT SERVICES
 Current account
 Savings Account

FUNCTIONS OF MERCHANT BANKING

The important functions of merchant banking are depicted below.

1 Raising Finance for Clients : Merchant Banking helps its clients to raise finance
through issue of shares, debentures, bank loans, etc. It helps its clients to raise finance from
the domestic and international market. This finance is used for starting a new business or
project or for modernization or expansion of the business.

2 Broker in Stock Exchange : Merchant bankers act as brokers in the stock exchange.
They buy and sell shares on behalf of their clients. They conduct research on equity shares.
They also advise their clients about which shares to buy, when to buy, how much to buy and
when to sell. Large brokers, Mutual Funds, Venture capital companies and Investment Banks
offer merchant banking services.

3 Project Management : Merchant bankers help their clients in the many ways. For e.g.
Advising about location of a project, preparing a project report, conducting feasibility studies,
making a plan for financing the project, finding out sources of finance, advising about
concessions and incentives from the government.

4 Advice on Expansion and Modernization : Merchant bankers give advice for


expansion and modernization of the business units. They give expert advice on mergers and
amalgamations, acquisition and takeovers, diversification of business, foreign collaborations
and joint-ventures, technology up-gradation, etc.

5 Managing Public Issue of Companies : Merchant bank advice and manage the
public issue of companies. They provide following services: Advise on the timing of the
public issue.Advise on the size and price of the issue. Acting as manager to the issue, and
helping in accepting applications and allotment of securities.Help in appointing underwriters
and brokers to the issue .Listing of shares on the stock exchange, etc.
Handling Government Consent for Industrial Projects : A businessman has to get government
permission for starting of the project. Similarly, a company requires permission for expansion
or modernization activities. For this, many formalities have to be completed. Merchant banks
do all this work for their clients.
6 Special Assistance to Small Companies and Entrepreneurs : Merchant banks
advise small companies about business opportunities, government policies, incentives and
concessions available. It also helps them to take advantage of these opportunities,
concessions, etc.

7 Services to Public Sector Units : Merchant banks offer many services to public
sector units and public utilities. They help in raising long-term capital, marketing of
securities, foreign collaborations and arranging long-term finance from term lending
institutions.

8 Revival of Sick Industrial Units : Merchant banks help to revive (cure) sick
industrial units. It negotiates with different agencies like banks, term lending institutions, and
BIFR (Board for Industrial and Financial Reconstruction). It also plans and executes the full
revival package.

9 Portfolio Management : A merchant bank manages the portfolios (investments) of its


clients. This makes investments safe, liquid and profitable for the client. It offers expert
guidance to its clients for taking investment decisions.

10 Corporate Restructuring : It includes mergers or acquisitions of existing business


units, sale of existing unit or disinvestment. This requires proper negotiations, preparation of
documents and completion of legal formalities. Merchant bankers offer all these services to
their clients.

11 Money Market Operation : Merchant bankers deal with and underwrite short-term
money market instruments, such as: Government Bonds .Certificate of deposit issued by
banks and financial institutions .Commercial paper issued by large corporate firms. Treasury
bills issued by the Government (Here in India by RBI).

12 Leasing Services : Merchant bankers also help in leasing services. Lease is a contract
between the lessor and lessee, whereby the lessor allows the use of his specific asset such as
equipment by the lessee for a certain period. The lessor charges a fee called rentals.
Management of Interest and Dividend : Merchant bankers help their clients in the
management of interest on debentures / loans, and dividend on shares. They also advise their
client about the timing (interim / yearly) and rate of dividend.

DEFINATION OF MERCHANT BANKERS

A merchant banker is someone who works for a merchant bank.

ROLE OF MERCHANT BANKERS


The role of merchant banker is dynamic in the wake of diverse nature of merchant
banking services. Merchant banker’s dynamism lies in promptly attending to the
corporate problems and suggests ways and means to solve it. The nature of merchant
banking services is development oriented and promotional to help the industry and
trade to grow and survive. Merchant banker is, therefore, dedicated to achieve this
objective through his dynamism. He is always awake to renew his skills, develop
expertise in new areas so as to equip himself with the knowledge and techniques to
deal with emerging new problems of corporate business world. He has to keep pace
with the changing environment where Government rules, regulations and policies
affecting business conditions frequently change; where science and technology create
new innovations in production processes of industries envisaging immediate
renovations, diversification, modernizations or replacements of existing plant and
machinery or other equipments putting new demands for finances and necessitating
overhauling of the capital structure of the firms.
Merchant banker has to think and devise new instruments of financing industrial
projects. He has to assume wider responsibilities of saving industrial units from going
sick and guiding industries to be set up industrially backward areas to eliminate
regional imbalances in industrial development of the country. He has to guide the
wider section of the community possessing surplus money to invest in corporate
securities and other productive investment channels. He has to help the industry in
different forms to ensure that it runs risk free and devoid of uncertainty by assisting
the has to watch the interest and win over the confidence of the Government, its
agencies, along with the entrepreneurs, the investors and the whole community. He
must bridge the communication gap between different sections and resolve the
problem being faced in different areas concerned with the business world.
To discharge the above role, a merchant banker has t be dynamic. For this reason, a
merchant banker is sometimes, called M.B i.e. Moving Bottom, i.e., one who never
sits at one place, always moving- attending meetings and meeting clients and
constituents, doing business and getting business by attending meetings and
conferences, imparting knowledge to others and acquiring new knowledge to maintain
his supremacy in possession of latest information. His role depicts a personality cult,
which is unique and envious to be followed by others.
In the days ahead, merchant bankers have very significant role to play tuning their
activities to the requirements of the growth pattern of corporate sector, the industry
and the economy as a whole, which is, in it, a challenging task and to meet these
challenges merchant bankers will have to be more vigorous and strategic in playing
their role. They will have also to adopt new ways and means in discharging their role

ROLE IN THE MARKET

The Securities and Exchange Board of India (SEBI) has stated that merchant bankers
must be involved more closely in the market making process as share brokers do not
have the requisite expertise to evaluate the fundamentals of the scrips before taking
over the role of market makers. Further, share brokers generally being partnership;
firms do not have the financial clout which is necessary for market making activity.
Resultantly, the SEBI has suggested that any member of the stock exchange along
with one merchant banker registered with SEBI could act as a market maker.
The SEBI has felt that to ensure liquidity of scrip it was necessary to facilitate greater
movement, which could only be achieved through the institution of market makers.
Market makers would also create a market for the scrips by offering two way quotes
to the investors. A minimum of ten scrips has been proposed by SEBI for the market
makers.

CHAPTER 2

DECCAN MERCHANT BANK:

HISTORY
The Deccan Merchants Co-op. Bank Ltd. is one of the leading co-operative bank in Mumbai,
which provides services through its 13 Branches located at Mumbai, Navi Mumbai, Thane,
Pune areas and two Offices Head Office and Central Office. The area of operation of the bank
is whole of Maharashtra State. We have 99 years excellent long journey with Golden Days
and now from the year 2017 we are going to celebrate our Centenary Year. For the last 99
years we are providing trusted and excellent services. The brief history of our 99 years
journey is as follows.

From decade Mumbai is known as financial Capital of India. Many industries, factories and
traders were established in Mumbai. At that time Mumbai's population was around 14 to 15
lakh and Three-Fourths of the population was of Marathi speaking people.Marathi peoples
were mainly engaged in service sector, doing labourers jobs or small business and professions
like Advocates and Doctors etc.for the livelihood.They were less in trading and
manufacturing vocation.

The Marathi businessmen were in scarcity of capital. Therefore, the educated Marathi
businessmen were realized the need of their own financial institute which can assist them to
explore their business. On the basis of that on 16th April, 1914 some Cloth sellers,Printing
Press Owners, Book Publishers, Chemist and Traders were gathered and established their
own association called "The Deccan Merchants Association".

The meeting of the members of Deccan Merchants Association was held on 20 August 1917
and it was decided to establish a co-operative society. This meeting was headed by renowned
Economist Shri. Chintamanrao Samant and with his blessing "The Deccan Merchants Co-op.
Society" was established on 30th August 1917. Thereafter, in 1929 on the occasion of
Dipavali Padva i.e. Balipratipada the said society was converted into "The Deccan Merchants
Co-op. Bank Ltd." The bank was started with its single branch at Girgaum, Mumbai and In
August 1937 another branch of bank was opened at Dadar, Mumbai.

The growth of the bank was increased after Independence, the bank which was started with
the core capital of Rs.375, enhanced its capital to Rs.1.25 lakh in the year 1957. At that time
the Deposits of bank was Rs.29.50 lakh.

However, the real progress of the bank was started from the year 1968. Taking into
consideration the progress of the bank The Reserve Bank of India offered the merging of
Goregaon based "Kalavihar Co-operative Bank Ltd. in our bank and on 23 December 1978
this bank was merged with us, where our Goregaon branch was started. As mentioned above
initially the bank had two branches, Girgaum and Dadar. In the year of 1966 the bank opened
its third branch at Byculla and thereafter in the year 1978 at Ghatkoper (West). After that the
bank received further Licenses and opened its branches at Borivali, Dhaisar and Ghatkopar
(East) in Mumbai. Till the year 1990 the bank had total 8 branches and two offices, the Head
office and Central office.

The bank was doing well but its progress was not as good as other banks, as the expansion of
bank was stopped due to various reasons. In the year 2002 existing Chairman Shri. Kashinath
Dinkar More had taken the charge of Chairmanship of the bank, his first objective was
expansion of the bank. He put real efforts and we received license from Reserve Bank of
India on 24th May 2004 to open new branch at Vashi, Navi Mumbai. The Vashi Branch was
inaugurated by former Deputy Chief Minister Shri Chhaganraoji Bhujbal. At present this
branch is our highest profit making branch. In the same year the ground floor premises of our
Girgaum building which was with M/s. Bombay Book Depot was taken back from them and
our Girgaum Branch was shifted to ground floor for the convenience of our customers.

Meanwhile bank was trying to expand its branch network but could not succeed, as the MOU
between the Government of Maharashtra and Reserve Bank of India was not signed.
Therefore the RBI was granted stay on issuing new branch licenses to UCBs. Thus, during the
period from 2004 to 2009 the bank was unable to open new branches. After execution of
MOU between the RBI and Government of Maharashtra in the year 2009 the RBI granted us
the permission to open new branches at Thane and Kharghar. Thane Branch was inaugurated
by deputy CM. Honorable Shri. Chhaganraoji Bhujbal and Kharghar branch was inaugurated
by Honorable Minister Shri. Ganeshji Naik.

At that time the bank's jurisdiction was Mumbai, Thane, Pune and Raigad district but the
bank had no branch in Pune district. In the year of 2011 bank made debut in Pune by
inaugurating its new branch at Hadapsar, Pune on 16th January 2011 and thereafter on 30th
November 2011 it had opened another branch at Saswad Pune. Both these branches were
inaugurated by former deputy CM. Honorable Shri. Ajit Pawar.

The present status of the bank branches is as follows:

Sr.No Branch Date of Opening


1 Girgaum 19 July, 1929
2 Dadar August, 1937
3 Byculla 22 April, 1966
4 Ghatkopar - West 20 July, 1978
5 Goregaon 23 December, 1978
6 Borivali 25 May, 1985
7 Dahisar 31 May, 1986
8 Ghatkopar-East 19 August, 1990
9 Vashi 24 May, 2004
10 Thane 28 May, 2009
11 Kharghar 27 December, 2009
12 Hadpsar, Pune 16 January, 2011
13 Saswad, Pune 30 November, 2011

The working of the bank was manual till 1990. In the year 1992 the bank started
Computerization process, at first the Girgum Branch was computerized and there after step by
step computerization was done in all the branches and offices. Though the branches of the
bank were fully computerized they had different softwares hence there was no uniformity in
the working of the bank. So there was need to implement unique software in all the branches
and offices of the bank. The said subject was taken on agenda and while discussing the
thought come up, why we should not go for core banking? and the resolution was passed in
year 2005-2006 to implement Core Banking software in the bank and CBS of M/s. Next Step
InfoTech Pvt. Ltd. was successfully installed in bank. This software is still running
successfully and effectively in the bank.

The next vision of the bank was 24x7 banking service and on the basis of that in the year
2007-2008 bank started it's ATM services in its Ghatkopar(East) branch and Borivali branch
and thereafter in Girgaum branch. But scope of ATM services was limited. As Our Account
holders had access limited to local ATM network of the bank. So there was low response to
our ATM services, It was the dream of our Honorable Chairman Shri. Kashinath D. More to
facilitate our customers with ATM facility in all over India by using ATM's of other banks
and his dream was fulfilled by introduction of 'Rupay Card'. On 28th June 2014 the bank
started its Rupay card services and our customer got access to more than 166K ATM's of
other bank in all over India.

The Chairman and Board of Directors are always trying to give all latest banking facility to
our customers. The Bank started giving RTGS/NFTS facility from 2009. The facility like
Online VAT Payment, Demand Draft on prime cities of India, safe deposit locker facility,
Aadhar link saving account facility, franking, life insurance etc. are successfully provided by
the bank and the customers are availing benefit of the same. The bank has obtained license for
giving Franking services through its Dadar, Thane and Byculla branches. The e-Franking
facility is also provided under sub membership of IDBI Bank from all the branches of the
bank. The government Schemes of 'Pradhan Mantri Jeevanjyoti Bima Yojna' (PMJBY) and
'Pradhan Mantri Suraksha Bima Yojna' (PMSBY) is also effectively implemented by the
bank.

The bank is doing continuous progress under the efficient leadership of a Chairman Shri.
Kashinath D. More, the bank has seen its real growth in his tenure. The members of the bank
have a bonding trust in his leadership and the testimony of that the election of the Board of
Directors was held unopposed in the year of 2009 and 2015. The Bank was felicitated by an
Award of Most Excellent Institute by the 'Rashtriya Sahakarita Vikas Tatha Gramin
Prabandh Sanstha'. The Brihan Mumbai Nagari Sahakari Banks' Association had also honored
our bank continuously for two years for its working.

In these 99 years the bank has seen different scenarios and experience ups and downs but still
its stand firmly and continuously marching towards progress. It was headed by many well
known personalities as a Chairman and all of them had contributed their efforts in the
progress of bank in their own fashion.

Sr.No. Year Name


Late. Mr. Chintamanrao
1 1917 TO 1920 Samant
Late. Mr. Keshav Balkrishna
2 1920 TO 1923 Joshi
Late. Dr. Shankar
3 1924 TO 1929 Ramakrishna Machave
Late. Mr. Govind Narayan
4 1929 Potdar

Late. Mr. Dharmaveer


5 1930 Shankarkrishna Puppala
Late. Dr. Motiram Balkrishna
6 1931 Velkar
7 1932 TO 1936 Late. Mr. Ganesh Hari Pethe
Late. Dr. Motiram Balkrishna
8 1936 TO 1950 Velkar
Late. Dr. Vitthal Balkrishna
9 1950 TO 1953 Gandhi
Late. Mr. Vaman Vasudev
10 1953 TO 1958 Wagh
Late. Mr. Vaman Pundlik
11 1958 (6 Month) Varde
Late. Mr. Vinayak Dattaram
12 1960 TO 1965 Dalavi
Late Mr. Shantaram Mahadev
13 1965 TO 1984 Dahanukar
Late Mr. Dattatraya Damodar
14 1984 TO 1986 Kale
1987 TO February, Late Mr. Pramod Jagannath
15 1993 Vaidya
March, 1993 TO
16 October, 1994 Mr. Prakash Aatamaram Atre
November, 1994 TO Late Mr. Laxman Mahadeo
17 January, 1997 Khadtare
February, 1997 TO Mr. Vinodakumar Takhatamal
18 November, 1998 Kacchara
December, 1998 TO Late Mr. Pramod Jagannath
19 December, 2001 Vaidya
20 Since January, 2002 Mr. Kashinath Dinkar More

On the achievement of every mille stone there was a grand celebration. The Silver Jubilee of
the bank was celebrated on 19th September 1942 in a garden at 'Vanita Vishram' and the
Chairperson of the programme was Raja Sir Raghunath Panth Sachiv, the King of Bhore
Sansthan. The programme was concluded by dinner in Hotel Taj.

The Golden Jubilee celebration of the bank was arranged at Vanmali Hall, Dadar on 3rd April
1968. The Chairperson of the Program was Honorable Shri. S. K. Patil and Mr. Balasaheb
Desai, the then Revenue Minister of Maharashtra was the Chief Guest, who gave slogan to
the bank "असमर्थास समर्ा करणे " .

The Platinum Jubilee celebration was arranged at Swatantryaveer Sawarkar Hall, Shivaji Park
Dadar. on 10th and 11th October 1992.. On 10th October the get together of Volunteers of
Co-operative Banks was arranged and the Chief Guest was the then Honorable Opposition
leader Shri. Gopinathji Munde. On 11th October the ceremony of platinum jubilee concluded
in presence of Finance Minister Shri. Ramrao Adik as a Chief Guest.

The bank is now waiting to celebrate its Centenary Year in 2017, the Members, Account
holders, Depositors, Customers, Board of Directors and Employees are eager to see the grand
celebration of completion of 100 years trusted service of the bank . So many have come, so
many have taken benefits, so many have contributed, some of them are still there to share
their experience, some of them are gone with history and memories but still the Deccan
Merchants Co-operative Bank exists and will exist forever.

MISSION AND VISSION OF DECCAN MERCHANT CO-OPERATIVE


BANK:

The Deccan Merchants Co-operative Bank Ltd (DMCB) was founded in 1917 by Shri.
Chintamanrao Samant and has the unique distinction of being a witness to history from
India's freedom movement and the glorious chapter of post-independence India and is in the
business for the past 99 years. Today The DMCB has 15 locations, which includes Head
office, Central Office, Data Center and 13 branches, branches spread over Mumbai , New
Mumbai & Raigad and Pune Dist. The Bank have plans for moderate growth in branches,
total business and profits. The bank has plans to open branches in Thane, Pune and Raigad
region. All 13 branches are computerized with a Total Branch Automation solution. The
Board of Directors and the management of the Bank continued to demonstrate their steady
faith in the progress of the common man and the co-operative movement and they encouraged
the shareholders to save despite all odds. Though the bank has medium size banking business
structure but has been successful to maintain the pleasant position in the changing scenario.
The bank has always kept the respect of RBI norms and followed to match the expectation of
regulators.

DMCB has plans to provide modern, competitive service to its retail and small-scale
customers using IT as a driver to provide the best customer conveniences. The bank started to
incorporate Core Banking Solution (CBS) to achieve the projected business growth and to
match the expectation of customers. The bank has started to implement the CBS in true
centralized environment.

Hon. Shri. K. D. More currently heads the Bank as a Chairman and has continuously adopted
the practice of fast and effective decision-making and has a perfect futuristic view. He is
basically a practical businessman and social worker having broad techno-banking vision. His
work, views, practices is always supported by other colleagues in the board. Shri. More
always considers the opinion of each and every entity in the bank, and based on that he takes
the effective decisions. He always believes in the Team Work and Team Spirit. He and his
team in the Board has planned to adopt modern technology and wish to start Internet
Banking, ATM Services, Mobile/SMS Banking, Tele-Banking etc. within short span of time.

Now Shri. S. L. Abhang - General Manager have been handling day-to-day operations and
have shown his manageability and effectiveness by maintaining a strong position of the bank
in this modern and competitive era.

SCHEMES PROVIDED BY DECCAN BANK

DAILY
SAVING
RECURRING
DEPOSIT
DEPOSIT

DAILY
FIXED
CURRENT
DEPOSIT
DEPOSIT

1:Savings Deposit
Facilities and Services

For All Facilities and Services


* Minimum balance required Rs.1000/-
Free cheque book facilities upto 105 leaves

RuPay ATM Card Facility

ADHAR Enabled DBTL Transactions

Pradhan Mantri Jivan Jyoti Bima Yojna


* Life Insurance upto Rs. 2 lac

* Accidental Insurance upto Rs. 2 lac


RTGS / NEFT Facility

Online Tax Payment Facility

Core Banking Facility

SMS Alert Facility

E-Statement Facility

2. Daily Recurring Deposit

 Minimum daily deposit in multiples of Rs.50 /- per day


 Tenure of account 1 year to 3 year.
Branch representative will visit personally and collect the daily investment from you.

Rate of Interest

Sr.No. Duration Rate

A Account for 1 year 3%

B Above 1 year 4%

C Above 2 year 5%
3. Daily Current Deposit

Specially Designed for Repayment of Loan

4 FIXED DEPOSITS

Interest Rate from w.e.f. 01-10-2017

General Senior Citizen / All types of Registered Co-op. Society /


Sr.No. Period Depositors Registered Charitable Trust for Interest Rate

1 15 to 90 days 4.00 % 4.00 %

2 91 to 180 days 5.00 % 5.00 %

181 days to 12
3 months 6.00 % 6.00 %

Above 1 year to 2
4 years 7.50 % 8.00 %

Above 2 years to 3
5 years 7.25 % 7.75 %

Above 3 years to 5
6 years 7.60 % 8.10 %

7 More than 5 years 7.00 % 7.50 %

0.50% Additional Intrest


 On deposit more than 1 year 0.5 % more interest for senior citizen, 60 year above.
 Deposit (trust and co-operative society, Registered charitable trust)
Loan facility available

LOANS AND ADVANCES

 Personal Loan
 Consumer Loan
 Housing Loan
 Vehicle Loan
 Education Loan
 Pledge Loan Against Gold/NSC
 Loan Against Deposit
 Rebate On Regular Repayment

Personal Loan
Sr.No. Type of Loan Schemes Present Rate of Interest
PERSONAL LOANS SECURED AGAINST DIRECT
DEDUCTION UNDER SECTION 49 of M.C.S Act

For personal Loan where undertaking of Direct deduction from the salary
of Borrower under section 49 of M.C.S Act from the Company of
organized sector / Government / Semi Govt. Undertaking / Public Sector
Undertaking. (Employees Working in Private Ltd. companies, Proprietary
A and partnership concerns will not be considered under this scheme) 14.50 %
UNSECURED PERSONAL LOAN i.e. LOAN OTHER
B THAN TYPE A 16.50 %
DECCAN SHATABDI SECURED PERSONAL
C LOAN(FOR NEW LOAN w.e.f 30.09.2016) 13.00 %

Maximum Loan Available : Rs.5 Lac (Depends on income of the borrower)

Guarantors Required : 1] Upto Rs.50,000/-One


2] Above Rs.50,000/-Two

Purpose : For Various Personal Requirement

1. Documents Required of Applicant


1. Loan Application duly filled in all respect.
2. Four latest Passport size photographs.

3. Proof of Identity - Photo copy of PAN Card (must) and Any one from photo Copy of ID Card
/Passport /Driving License / Aadhaar Card etc.

4. Proof of Residence - Photo copy of Ration Card (must) and Any one of the following -
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID /
Aadhaar Card etc.

5. Bank A/c Statement for last one year.

6. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other
7. In case of salaried person - Direct Deduction Letter U/s 49 if applied under secured personal
loan.

8. ECS mandate copy, Post Dated Cheques (PDC), Standing Instruction (SI) for debiting
monthly EMI from SB or CD A/c.

9. Documentary proof of purpose of loan.

10. Opening of Saving Bank A/c or business Current A/c is compulsory.

11. Collateral securities as per condition.

12. Share linkage- 5% of loan amount.

13. Process fees as per bank's rule.


Consumer
14. No pre-closer charges.

15. Interest on reducing balance.

3. Documents Required of Guarantors


16. Two pass port size photographs.

17. Proof of Identification ... as above.


18. Proof of residence ... as above.

19. Proof of Business.

20. Income proof ... as above for two months.

Loan

Sr.No. Type of Loan Scheme ROI


CONSUMER LOANS SECURED AGAINST
DIRECT DEDUCTION UNDER SECTION 49 of
M.C.S Act

For consumer Loan where undertaking of Direct


deduction from the salary of Borrower under section
49 of M.C.S Act from the Company of organized
sector / Government / Semi Govt.
Undertaking / Public Sector Undertaking.(
Employees Working in Private Ltd. companies,
Proprietary and partnership concerns will not be 14.50
A considered under this scheme.) %
UNSECURED CONSUMER LOAN i.e. LOAN 16.50
B OTHER THAN TYPE A %

Maximum Loan Available : Rs.75,000 Thousand(depends on income)


Guarantors Required
: Two

Purpose : To Purchase various consumer durables items like Electronics,Furniture


etc.

1. Documents Required of Applicant


1. Loan Application duly filled in all respect.

2. Four latest Passport size photographs.

3. Proof of Identity - Photo Copy of PAN Card (must) and Any one from following; Photo Copy
of ID Card/ Passport / Driving License / Aadhaar Card etc.
4. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone/Bill / Electricity Bill / Property Tax paid / Passport / Voters ID /
Aadhaar Card etc.

5. Bank A/c Statement for last one year.

6. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other

7. Proforma Invoice for consumer durables & articles to be purchased.

8. In case of salaried person - Direct Deduction Letter U/s 49 of M.C.S Act. If applied under
secured consumer loan.

9. ECS mandate copy, Post Dated Cheques (PDC), Standing Instruction (SI) for debiting
monthly
EMI from SB or CD A/c.

10. Opening of Saving Bank A/c or business Current A/c is compulsory.

11. Collateral securities as per condition.

12. Process fees as per bank's rule.

13. No pre-closer charges .

14. Interest on reducing balance.

3. Documents Required of Guarantors


15. Two Passport size photographs.

16. Proof of Identification ... as above.

17. Proof of residence ... as above.

18. Proof of Business.


19. Income proof ... as above for two months.

Housing Loan

S
r
.
N Present Rates
o (w.e.f. Special
. Type of Loan Scheme 01.10.17) Rebate
A) Housing Loan Scheme

Upto Rs. 5 lac

Above Rs.5 lac To Rs.15 lac 10.00 %


No
Above Rs.15 lac To Rs.35 lac 10.00 % Special

Above Rs.35 lac 10.00 % Rebate


for
Deccan Shatabdi Gruh Karja 10.00%
Yojana(for New Housing Regular
1 Loan)w.e.f 30.09.2016 9.00% Payment

Maximum Loan Available : Rs.70.00 Lac (depends on income)

Guarantors Required ;Two

Income of Surety : As per Bank's policy

Max Repayment : 240 Months

1 Documents Required of Applicant


1. Loan Application duly filled in all respect.

2. Four latest Passport size photographs.

3. Proof of Identity - Photo Copy of PAN Card (must) and Any one from following; Photo Copy
of ID Card/ Passport / Driving License / Aadhaar Card etc.

4. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID /
Aadhaar Card etc.

5. Bank A/c Statement for last one year.


6. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other
7. Property Documents -
Original Registration / Sale Agreement / Chain Agreement, NOC to mortgage the flat
from the Society / Builder Concerned Authority, Share Certificate, Latest Property Tax Paid
Receipt and Maintenance Paid Receipt, Copy of Registered Development Agreement and
power of Attorney, CC, OC, Architect's Work Completion Certificate and all other
related title documents as per legal opinion.

8. In case of salaried person - Direct Deduction Letter U/s 49 of M.C.S Act.

9. ECS mandate copy, Post Dated Cheques(PDC), Standing Instruction (SI) for debiting monthly
EMI from SB or CD A/c.

10. Opening of Saving Bank A/c or business Current A/c is compulsory.

11. Collateral securities - LIC sum assured should not be less than 25% of loan amount.

12. Share linkage- 2.5 % of loan amount.

13. Process fees as per bank's rule.

14. No pre-closer charges.

15. Interest on reducing balance.

3 .Documents Required of Guarantors


16. Two pass port size photographs.

17. Proof of Identification ... as above.

18. Proof of residence ... as above.

19. Proof of Business.

20. Income proof ... as above for two months.


House Repairs Loan

Present Rate of
Interest (w.e.f.
Sr .No. Type of Loan Scheme 01.06.17)
A HOUSE REPAIRS LOAN 12.00 %

Maximum Loan Available : Rs.10.00 Lac (depends on income)


(IF THE APPLICANT IS ENJOYING LOAN
FACILITY WITH US THEN THE MAXIMUM
LIMIT WILL BE RS. 5.00 LAKHS.)

Guarantors Required : Two

Income of Surety : As per Bank's policy

Max Repayment : 120 Months

1 Documents Required of Applicant


1. Loan Application duly filled in all respect.

2. Four latest Passport size photographs.

3. Proof of Identity - Photo Copy of PAN Card (must) and Any one from following; Photo Copy
of ID Card/Passport / Driving License / Aadhaar Card.

4. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID/
Aadhaar Card etc.

5. Bank A/C Statement for last one year.

6. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other
7. Property Documents -
Original Registration Receipt / Sale Agreement / Chain Agreements, NOC to mortgage
flat from the Society / Builder concerned Authority, Share Certificate, Latest Property
Tax paid Receipt and
Maintenance paid Receipt, Copy of Registered Development Agreement and power of
Attorney, CC, OC, Architect's Work Completion Certificate and all other related title
documents as per legal opinion.

8. Valuation Report of property.

9. Self Quotation or Contractor's Quotation.

10. In case of salaried person - Direct Deduction Letter U/s 49 of M.C.S Act.

11. ECS mandate copy, Post Dated Cheques(PDC), Standing Instruction (SI) for debiting
monthly EMI from SB or CD A/c.

12. Opening of Saving Bank A/c or business Current A/c is compulsory.

13. Share linkage - 2.5 % of loan amount.

14. Process fees as per bank's policy.

15. No pre-closer charges.

16. Interest on reducing balance.

3 Documents Required of Guarantors

17. Two passport size photographs.

18. Proof of Identification ... as above.

19. Proof of residence ... as above.

20. Proof of Business.

21. Income proof ... as above for two months.

Vehicle LOAN

Revised Rate of
Sr Interest from
.No. Type of Loan Scheme 01.06.17
"RIDE-ON FINANCE" FOR TWO
1 WHEELERS 12.00 %
2 "OWN YOUR CAR SCHEME"
10.00 %
1) For Purchase of New Brand Car for own
use 11.00 %

2) For Purchase of New Brand Car for 14.00 %


Tourist Business,Taxi & Professionals

3) For purchase old car for not more than 5


years. Old car for own use as well as for
Tourist Business, Taxi & Professionals
HEAVY VEHICLES-NEW
11.00 %
3 HEAVY VEHICLES-OLD 15.00 %
A) AUTO RICKSHAW LOANS-NEW
14.00%
AUTO RICKSHAW LOANS-OLD
15.00 %
CNG KIT LOAN (AUTO & TAXI)
15.00 %

B) Deccan Shatabdi New Auto Rickshow


Loan(for New Loan) 13.00 %
4 w.e.f 30.09.2016

New Vehicle

Sr.N
o. Type of Vehicle Margin
1 Two Wheeler Rs. 5000/- (Irrespective of Invoice Price)

85% of Profarma Invoice of Authorised


2 Taxi Dealer
95% of Profarma Invoice of Authorised
3 Heavy Vehicles Dealer + 75% for Body Building
85% of Profarma Invoice of Authorised
4 Car for Self Use Dealer
Car for Tourist
Business
Registered
5 Professionals Rs. 25000/- (Irrespective of Invoice price)
Auto Rickshaw 95% Profarma Invoice of Authorised
Dealer 75% or Rs. 10,000/- whichever is
6 for Accessories less
7 CNG Kit for 90% of Profarma Invoice of Registerd
Rickshaw & Taxi Dealer

Guarantors Required : Two

Income of Surety : As per the Bank Policy

1. Documents Required of Applicant


2. Loan Application duly filled in all respect.

3. Four latest Passport size photographs.

4. Proof of Identity - Driving License and Photo copy of PAN Card compulsory and Any one of
following; photo copy of ID Card / Passport / Aadhaar Card.

5. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID/ Aadhaar
Card etc.

6. Bank A/C Statement for last one year.

7. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other

8. Proforma Invoice for new vehicle to be purchased and valuation Report in case of old vehicle
from Banks approved valour .

9. Driving License of applicant or driver appointed by him.

10. In case of Vehicle for commercial use :


* necessary permit to own & run the vehicle.
* business assurance letters.

11. In case of Car Finance to registered professionals-


* copy of Certificate of Registration of profession.
12. ECS mandate copy, Post Dated Cheques (PDC), Standing Instruction (SI) for
debiting monthly EMI from SB or CD A/c.

13. Opening of Saving Bank A/c or Business Current A/c is compulsory.

14. Share linkage - 2.5 % of loan amount.

15. Process fees as per bank's policy.

16. No pre-closer charges .

17. Interest on reducing balance.

3. Documents Required of Guarantors

18. Two pass port size photographs.

19. Proof of Identification ... as above.

20. Proof of residence ... as above.

21. Proof of Business.

22. Income proof ... as above for two months.

Educational Loan

Sr Present Rate of
.No. Type of Loan Scheme Interest
EDUCATION LOAN (In India and
Abroad)

11.00 %
Upto Rs. 5.00 lac
A Above Rs.5 lac to Rs.25 lac 11.00%

Maximum Loan Available : Rs.20.00 Lac (depends on Income of the applicant)

Guarantors Required : Two Guarantors

Income of Surety : As per the bank policy

Maximum period for repayment : 84 Months

Maximum moratorium period: Upto actual period of educational course

1 Documents Required of Applicant


1. Loan Application duly filled in all respect.

2. Four latest Passport size photographs.

3. Proof of Identity - Driving License and Photo copy of PAN Card compulsary and Any
one of following; photo copy of ID Card / Passport / Aadhaar Card.

4. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID/
Aadhaar Card etc.

5. Bank A/c statement for last one year.

6. Income Proof:
● Salary earner
* last 3 months original authenticated salary slips.
* Copy of Form No.16 for last 2 years.
● Businessman
* Acknowledged copies of last three years I.T. Return with IT paid Challans.
* CA certified Trading and Profit Loss A/c, Balance Sheet with all schedules.
* Computation of Income statement.
* Business proof.

2. Other

7. All necessary documents in relation to Educational Programme.

8. Necessary travelling and hostelling which will satisfy the norms of educational loan.

9. ECS mandate copy, Post Dated Cheques(PDC),Standing Instruction (SI) for debiting
monthly EMI from SB or CD A/c.

10. Opening of Saving Bank A/c or business Current A/c is compulsory.

11. In case of immovable property the margin shall be 25% of loan amount.
In case of liquid security i.e. FDR/NSC/KVP/LIC margin shall be 15%.

12. Share linkage - 2.5 % of loan amount.

13. Process fees as per bank's policy.

14. No pre-closer charges.

15. Interest on reducing balance.

3. Documents Required of Guarantors.


16. Two pass port size photographs.

17. Proof of Identification ... as above.

18. Proof of residence ... as above.

19. Proof of Business.

20. Income proof ... as above for two months.

Pledge Loan

Pres
ent
Rate
s
(w.e. Specia
f. l
Sr. 01.06 Rebat
No. Type of Loan Scheme .17) e

Loan Against Gold


Ornaments 12.50
%
Deccan Shatabdi Sone
Yojana(Taran For New 11.00
1 Loan w.e.f 30-09-2016) %

Overdraft Against Gold 13.00 No


2 Oranaments % Specia
l
Loan/OD Against
Rebate
Govt.Secuities 11.00
for
3 (NSC,KVP,etc.) %
Regula
Loan/OD Against LIP r
a) Upto Rs.10.00 Lakh 11.00 Payme
4 b) Rs.10.00 Lakh and above % nt

Loan Against Deposit


Open fixed deposit scheme-85% overdraft available with cheque book facility.
85% Loan/Overdraft against all type of term deposits.

Business Loan
RATE OF INTEREST ON THE BASIS OF LOAN AMOUNT

Size of Rate of
Sr.No. Advance Interest Special Rebate

Upto Rs.
1 10 lac 13.50 % For the business
Term Loan &
Above Rs. Overdraft
10 lac to 1% rebate will be
2 Rs. 50 lac 13.00 % given against the
regular repayment .
Above Rs. Details as per Loan
3 50 lac 12.50 % Policy of the Bank.

RATE OF INTERST ON SPECIAL BUSSINESS LOAN SCHEME

SR NO TYPE OF LOAN INTERST


1 TERM LOAN AGAINST
MORTAGE OF
PROPERTY AND OD
AGAINST FIXED
ASSETS 13.50%
UPTO RS 10 LAC
13%
ABOVE RS 10 LAC TO
RS 50 LAC 12.50%

ABOVE RS 50
2 CASH CREDIT

UPTO RS 10 LAC 12.50%

ABOVE RS 10 LAC TO 12%


RS 50 LAC

ABOVE RS 50 LAC 11.50%

3 LOANS AND 15.50%


ADVANCES TO
COMMERCIAL REAL
ESTATE
4 TOD (Sanctioned by board 2% more than rate
as well as Sanctioned by applicable to CC\OD
Branch Manager Under
10% criteria)
5 SMALL SCALE
INDUSTRIES
(SSI)\MICRO AND
SMALL ENTERPRIES
(SME)
6 ALL TYPE ODF LOANS 11%
AND ADVANCES TO
PROFESSIONALS

Maximum Loan Available : Upto Bank's Loan Exposure Limit or As per Scrutiny of Loan
Application whichever is less

Guarantors Required : Two Guarantors (All Partners, Directors and owners of property
will be taken as a guarantors.)

Income of Surety : Net salary income Rs.15,000/- p.m. OR Rs.2 Lac p.a. for businessman

1. Documents Required of Applicant (Individual, Partners and Directors)


2. Loan Application duly filled in all respect.

3. Four latest Passport size photographs.

4. Proof of Identity - Driving Licence and Photo copy of PAN Card compulsary and Any one
of following; photo copy of ID Card / Passport / Adhar Card)

5. Proof of Residence - Photo Copy of Ration Card (must) and Any one from following;
Latest Telephone Bill / Electricity Bill / Property Tax paid / Passport / Voters ID/ Adhar
Card etc.

6. Proof of Business - Partnership Firm's and Company's PAN Card, Shop Act Licence,
Partnership Deed with Registration Certificate, CST / VAT Registration Certificate,
Company Incorporation Certificate with Memorandum & Article of Association, Board
Resolution, SSI Registration Certificate and all copies of certificates issued by the various
Authorities related to specifc business.

7. Proof of Business Address (Shop/Regd. Office/Factory/Godown) - Maintenance Receipt


/ Telephone or Electricity Bill or Leave & Licence Agreement in force.

8. List of Sister Concern

9. Statement of other Bank Business A/cs (Current A/cs & Loan A/cs) for last one year

10. Income Proof:


11. * Acknowledged copies of last three years I.T. Return with IT paid Challans
* CA certified Trading and Profit & Loss A/c, Balance Sheet with all schedules
* Computation of Income statement
2. Others

12. For calculate Assessment of Working Capital - Stock Statement, List of Sundry Debtors
(Below 90 Days) & Sundry Creditors, List of monthwise Sales & Purchases

13. Collateral Security -


a) For Immovable Property Documents - Sale Agreement / Chain Agreement, NOC to
mortgage . Property from the concerned Authority, Share Certificate, latest Property Tax paid
Receipt and Maintenance paid Receipt, Registered Development Agreement and Power of
Attorney, CC, OC, Architect's Work Completion Certificate,Consent letter/s of property
owner/s and all other
related Title documents.
b) Movable property - FDR/LIC/NSC/ICVP

14. Valuation Report of immovable property

15. Documentary proof of end use purpose of loan.

16. Project Report (showing Brief History of business, Cost of Project, Assessment of Working
Capital and Repayment Capacity with DSCR)

17. Opening of business Current A/c is compulsory.

18. Collateral securities - Business loan above Rs.5 Lac require Collateral securities.

19. Share linkage- 2.5% of loan amount.

20. Process fees as per bank's policy.

21. No pre-closer charges.

22. Interest on reducing balance.

3 Documents Required of Guarantors

23. Two pass port size photographs.

24. Proof of Identification ... as above.

25. Proof of residence ... as above.

26. Proof of Business.

27. Income proof ... as above for two months.

28. For the salaried guarantors latest 3 months salary slip along with form 16

Rebate on Regular Repayment


1% Rebate on Business Loans

2% Rebate on Real Estate Loans

Present Bank Charges


DEPOSITS

Type of
Service/
Facility
Arrangement Service Charges
A DEPOSITS :
MICR
Cheque-Book
1 issue charges
1)
Current/Cash First cheque book free for new A/c
Credit / Opened.
Overdraft Rs.2.00 per Cheque leaf at the time of
A/c issue of cheque book.
Free 105 leaves per year (April to
March).
2) Savings Over 105 Leaves Rs.2/- per cheque leaf.
Bank (This charge will be applicable from
Account 1st April, 2013.)
Outstation
Cheques /
2 Bills
1) Upto
Rs.10,000/-
2) Rs.10,001/-
to
Rs.1,00,000/-
3) Above
Rs.1,00,000/-

(the above
charges will
be all
inclusive, no
additional
charges such
as courier or Rs.50/-
postage Rs.100/-
charges) Rs.150/-
3 Collection of Rs.35/- Handling charges plus Equal
foreign Commission charged by the collecting
currency bank.
cheques
/Foreign
currency
remittance
through other
Bankers
4 RTGS
Outward
Transaction
Upto Rs. 5
Lac
Above Rs. 5 Rs.25/-
Lac Rs.50/-
Inward
Transaction Nil
5 NEFT
Outward
Transaction
Upto Rs. 1
Lac
Above Rs. 1
Lac to Rs. 2
Lac Rs.5/-
Above Rs. 2 Rs.15/-
Lac Rs.25/-
Inward
Transaction Nil
SPEED
6 CLEARING
Upto Rs. 1
Lac
Above Rs. 1 No Charges
Lac Rs.150/-
ECS Debit
7 Return
1) Upto
Rs.5,000/- Rs.50/-
2) Rs.5001/- Rs.75/-
to Rs.10,000/- Rs.100/-
3) Rs.10,001/- Rs.200/-
to Rs.50,000/- Rs.500/-
4) Rs.50,001/- Rs.750/-
to .1,00,000/- Rs.2500/-
5)
Rs.1,00,001/-
to
Rs.5,00,000/-
6) Rs.
5,00,001/- to
Rs.10,00,000/-
7) Above
Rs.10,00,000/-
MICR
Cheque
Return
Charges
(Outward
8 Rtd.)
1)Local
Cheques /
National
Clearing
Cheque

a) Upto
Rs.10,000/-
b) Rs.10,001/-
to Rs.50,000/-
c) Rs.50,001/- Rs. 25/-
to .1,00,000/- Rs. 50/-
d) Above Rs. 100/-
Rs.1,00,000/- Rs. 150/-
a) Outstation Cheques Rs.100/- Per
instrument
(Plus actual Postage/ Courier charges)

b) Cheques Collected through tie up


Arrangement Collecting Bank's
2) Outstation Commission/charges PLUS Rs.100/-
Cheques Per Instrument.
MICR
Cheque
Return
Charges
(Inward
9 Return)
1) Upto Rs.50/-
Rs.5,000/- Rs.75/-
2) Rs.5001/- Rs.100/-
to Rs.10,000/- Rs.200/-
3) Rs.10,001/- Rs.500/-
to Rs.50,000/- Rs.750/-
4) Rs.50,001/- Rs.2500/-
to .1,00,000/-
5)
Rs.1,00,001/-
to
Rs.5,00,000/-
6) Rs.
5,00,001/- to
Rs.10,00,000/-
7) Above
Rs.10,00,000/-
Issue of
Duplicate
Pass-Book /
10 Statement
1) Pass -
Book Rs. 50/-
2) Statement Rs. 10/- per page Maximum Rs. 1000/-
Closure of
A/c
1) S.B.
account
closed Within
one year.
2) Current
account
closed Within Rs. 150/-
11 one year Rs. 300/-
Minimum
Balance
maintenance
12 charges
Minimum Balance maintenance
Rs.1000/- With cheque-book and
without cheque-book
If no such balance is maintained
1. Savings Charges: Rs.50/- p.m.will be charged for
Bank A/c. S.B. account
Minimum Balance maintenance

Rs. 3,000/-
If no such balance is maintained Charges:
2. Current Rs.100/- p.m. will be charged for Current
Account A/c.
Faith
13 Enquiry: Rs. 150/-
14 Folio Charges Rs.100/- for 40 entries,
(Incidental Minimum Rs.100/- & Maximum Rs.1000/-
Charges) Will be charged half yearly in the month of
For C.D., C.C. September and March every year.
& O.D.
accounts
Except OD
against
Deposit, Govt.
Security and
OD against
Gold, OD
against
Deposit.
Rs.10/- per instrument
Maximum Rs.100/- (If cheque returned
Stop Payment due to insufficient balance, return
15 Charges charges will also be applicable)
Penalty for
delay in
monthly
installment in
16 MRD A/c R.D. Late Fees Rs. 1.50 per Rs.100/-
TERM
B DEPOSITS
Issue of
Duplicate
Term Deposit
Receipt/ R.D. Rs.50/- per Receipt OR R.D. / D.R.D.
Pass-Book / Pass-Book. (Stamp paper charges will be
D.R.D .Pass extra for issue of Duplicate Term Deposit
1 Book Receipt)

Present Bank Charges


LOANS

Type of Service/Facility
Arrangement Service Charges
C LOANS
1 Issue of No Dues Certificate Rs.100/- per Account
Encashment of :
UNITS of UTI/
2 SHARES/LIC Rs.200/- per certificate / Policy document
3 Encashment of : Rs. 200/- Per Certificate.
NSC/KVP/ Indira Vikas
Patra
4 Legal Notice from Advocate Rs.300/- plus Advocates actual charges
I) Borrower / Guarantor
notice
II) Final demand notice
III) Salary attachment
notice
IV) Monthly Stock Rs.50/-
Statement & Renewal Paper Rs.100/-
Reminder Rs.100/-
V) Locker Rent Reminder Rs.200/-
5 Notice Rs.50/-
Non submission of monthly
Stock statement & List of
Creditors & Debtors on or
before 10th day of the
6 month Rs.300/- p.m. per statement
Commitment Charges
for Under Utilization of Cash-
Credit Limit i.e. Utilization 0.10 % p.m. On unutilized funds.(charges
7 below 50 % to be applied on monthly basis)
8 Cash-Credit / Overdraft
Extension Charges Rs.1000/- for each
month Lump sum.

2.00 % p.a. Penalty for delayed period


on daily outstanding balance from the
Extension Charges date of expiry of limit to the date of
submission of renewal proposal
Penalty for defaulted period completed in all respect.
9 Gold Appraisal Charges As per the Board approval Time to Time.
Visit charges per visit to
1 Borrower / their sureties for
0 recovery of overdue. Rs. 150/-
OTHER SERVICE
1 CHARGES ON LOANS &
1 ADVANCES AMOUNT:
Cost of Application Form for all types of
loans Rs.50/- and no cost of application
A form for - Loan Against Gold / Deposits /
. Cost of Loan Applications: Govt. Securities / LIP and Units.
B
. Processing Fees :
Type of Loan Processing fees
1 Gold Loan Rs. 0.50%
2 Loan Against Deposits Nil
Loan Against Govt.
3 Sec.(NSC/KVP etc.) Rs.0.50%
Loan Against Insurance
4 Policy Rs.0.50%
5 Loan Against Units of UTI Rs.0.50%
6 Personal Loans Rs.1.00%
7 Consumer Loans Rs.1.00%
8 Vehicle Loans Rs.1.00%
9 Housing Loan Rs.1.00%
1
0 Educational Loans Rs.0.75%
a) Up to Rs. 50 lac - 1.00%
b) Above Rs. 50 Lac to Rs. 1 Cr. -
1 0.75%.
1 Plant & Machinery Loan c) Above Rs.1 Cr. - 0.50%
a) Up to Rs. 50 lac - 1.00%
1 b) Above Rs. 50 Lac to Rs. 1 Cr - 0.75%.
2 Mort. Of Property Loans c) Above Rs.1 Cr. - 0.50%
a) Up to Rs. 50 lac - 1.00%
1 b) Above Rs. 50 Lac to Rs. 1 Cr - 0.75%.
3 Cash Credit/Overdraft (NEW) c) Above Rs. 1 Cr. - 0.50%
Cash Credit /Overdraft
(Renewal) a) Up to Rs. 50 lac - 1.00%
1 b) Above Rs. 50 Lac to Rs.1 Cr - 0.75%.
4 Enhancement c) Above Rs. 1 Cr. - 0.50%
1 Overdraft Against
5 NSC/KVP/LIP/UNITS 0.50%
1 Bill Discounting / Cheque
6 Purchase 1.00%
1 Auto Finance- Rickshaw
7 CNG 1.00%
1
8 Ride On Scheme 1.00%
1 Advance to Medical
9 Practitioners- Car Finance 1.00%
2 House Repairs Loan 1.00%
0
C 2.00% p.a. on defaulted amount for
. Penal Interest defaulted period.

Present Bank Charges


GENERAL

Type of Service/Facility
Arrangement Service Charges
D GENERAL
Issue of Pay
1 orders
1) Upto
Rs.5,000/-
2) Rs.5,001/- to
Rs.10,000/- Rs.30/-
3) Rs.10,001/- Rs.50/-
to Rs.75,000/- Rs.125/-
4) Rs.75,001 Rs. 2/- per Thousand OR Part there of
and above Maximum Rs.2000/-
Issue of DD
through Tie-
Up
arrangement
2 Banks
Rs.100/-
Rs.5/- per thousand per part thereof.
1) Upto Minimum Rs.100/- and maximum Rs.
Rs.10,000/- 2500/-
2) Above Note - Issuing Bank's Commission / Charges
Rs.10,000/- (if any) will be paid from our commission
Issue of D. D.
through Non
Tie-up Issuing Bank's Commission Plus 50% of the
2- Arrangement said Bank's Commission be recovered as our
A Banks. Commission.
1) Issue of
Duplicate Pay Rs. 50/- per instrument
order
Rs. 50/- per instrument
2)
Revalidation ( If a new pay order issued in lieu of
OR cancelled pay order then only the
Cancellation cancellation charges be recovered and no
3 of charges be levied for the New Pay order)
Pay order
1) Issue of
Duplicate DD

2)
Revalidation
of DD OR
Cancellation Rs.75/- per instrument
of DD
Rs.75/- per instrument
Issued under
Tie-up [Tie-Up Arrangement Bank's Charges (if
4 Arrangements any) will be paid from our charges only]
1) If Bank Guarantee issued against 100%
Deposit, Commission ofRs.500/- will be
charged upto Rs.1.00 Lac & @ 0.50%
p.a. on remaining amount.

2) If Bank Guarantee issued to our regular


customer against less than 100% Deposit,
1. Bank then commission will be @ 3% p.a. lump
Guarantee. sum on entire amount.

3) If Bank Guarantee issued through other


banks, Commission charges of our Bank will
be equal to the Commission charged by such
other Banks. Subject to Minimum as
mentioned in point 1 & 2 above.

(Entire commission for full period of


guarantee to be recovered at the time of issue
of Bank Guarantee)
2. Issue of
Foreign LC L.C. opened through other Banks;
OR Other Commission charges of our Bank will be
Bank's Inland equal to the Commission charged by such
5 LC other Banks.
Signature
verification
6 charges Rs.50/- per document.
Issue of
Duplicate
Share
Certificate to
7 member Rs.50/- per certificate

* Issue of
Solvency Rs. 500/-
Certificate Rs. 750/-
8 1. Up to Rs.1 Rs. 2000/-
lac -
2. Over Rs.1
Lac to 5 lac -
3. Over Rs.5
lac -
Issue of
Identity Card
9 to a Member Rs.35/-
Handling
Charges for
Inland Bills
for Collection/
Payment
(When
payment in Rs.100/- per Documents
Indian currency (Plus actual postage or courier charges if any
10 ) )
* Service Tax
is Not
Applicable
Handling
Charges for
Export/Import
Bill for
Collection/
Payment
(When
payment in Rs.100/- per document
foreign Plus equal commission charged by the
11 currency ) remitting Bank .
Issue of
Inland LC
12 (Our Banks) 0.50 % of the LC amount
Issue of any
Certificate
other than
Interest
Certificates of
13 Deposits Rs.50/- per Certificate
Securitization
Notice
Charges

Loan upto
Rs.10 Lac
Loan Above Rs.1000/-
Rs.10 Lac to Rs.2500/-
14 Rs.50 Lac Rs.5000/-
Loan Above
Rs.50 Lac
Vehicle Loans

i) Seizing
charges for 2
wheelers, 3
wheeler and
light motor

ii) Seizing
charges for
tempo, truck Rs.1000/- (One time charges)
& other heavy
vehicles.
Rs.2500/- (One time charges)
(In additional
to above
towing Godawn charges to be received extra:-
charges actual 1) At actual if kept in other's garage
to be 2) If kept in Bank's Premises Rs. 50/- Per
15 received.) day.
Charges will be fixed on the basis of actual
16 ATM CARDS cost incurred and other recurring expenses
Franking
17 Charges Rs.10/- per document.

Present Bank Charges

SAFE
DEPOS
IT
LOCKE
E RS :

Typ
e of
the
Loc
ker Locker Rent
Adva Adva
nce nce
For 1 For 3
Year Years
Rs. Rs.
A 800/- 2300/-
Locker
1 Rent : B Rs. Rs.
950/- 2750/-

Rs.
Rs. 4100/
C 1400/- -
Rs. Rs.
H1 1500/- 4400/-
Rs. Rs.
D 1600/- 4700/-
Rs. Rs.
E 1800/- 5300/-
Rs. Rs.
F/L 2200/- 6500/-
G
Sma Rs. Rs.
ll 2400/- 7100/-
H Rs. Rs.
Big 2800/- 8300/-
Rs.
G Rs. 10100
Big 3400/- /-

Locker rent should be adjusted on quarterly


Basis in advance Locker rent accounts.

Note: No arrears of locker rent will be recovered


from those who have paid locker rent in
advance for 3 years on or before 01.01.2013
If party has surrendered the locker within the
period of 3 years then key changes charges
Surrend should be recovered extra from him. Rent to be
er of recovered month wise pro-rata basis (Minimum
2 Locker 1 Year)

A&B Rs. 100/-

Penalty C & H1 Rs. 150/-


for
delay in D&E Rs. 200/-
paymen
t of F/L & G SMALL Rs. 250/-
Locker
3 Rent H & G BIG Rs. 300/-

Break
4 open of Rs.500/- plus actual charges of break-open.
Lockers
in case
of loss
of Key/
Non
paymen
t

Financial Growth

Growth in the Business for Last Five Years (figures in lac)

DESCRIPTION 2013- 2014- 2015- 2017-


2014 2015 2016 2018
SHARE 1453.53 2199.98 2,342.84 2,192.21
CAPITAL
RESERVE FUND 4,056.21 5,583.13 8,297.71 9,396.99
& OTHER
RESERVES
INVESTMENTS 20,802.21 24,895.53 30,989.39 28,506.55
DEPOSITS 50,794.43 57,412.82 64,53.33 60,793.21
WORKING 57,400,24 65,36,9.41 76,874.49 73,505.06
CAPITAL
PROFIT 313,12 331,51 346,91 57’83

10% PROVISION IS TO BE MADE

GUIDELINES OF SEBI

After the obligations of the CCI, the place was occupied by a legal organ called as
“Securities and Exchange Board of India”. The issue of capital and pricing of
issues by companies has become free of prior approval. The SEBI has issued
for the issue of capital by the companies. The guidelines broadly covers
the requirement of the first issue by a new or the first issue of a new company set
up by the existing company, the first issue by the existing private companies and
public issues by the existing listing companies. The SEBI is the most powerful
organization to control and lead both the primary market and secondary market.

The SEBI has announced the new guidelines for the disclosures by the
Companies leading to the investor protection. They are presented below:
✓ If any Company’s other income exceeds 10 per cent of the total income, the
details should be disclosed.
✓ The Company should disclose any adverse situation which affects the
operations of the Company and occurs within one year prior to the date
filing of the offer document with the Registrar of Companies or Stock
Exchange.
✓ The Company should also disclose the information regarding the capacity
utilization of the plant for the last 3 years.
✓ The Promoters of the Company must maintain their holding at least at 20 per
cent of the expanded capital.
✓ The minimum application money payable should not be less than 25 per cent
of the issue price.
✓ The company should disclose the time normally taken for the disposal of
various types of investor’s grievances.
✓ The Company can make firm allotments in public issues as follows:
✓ Indian mutual funds (20%),
✓ FIIS (24%),
✓ Regular employees of the company (10%),
✓ Financial institution (20%).
✓ The Company should disclose the safety net scheme or buy back
arrangements of the shares proposed in public issue. This scheme is
applicable to a limited number of 500 shares per allottee and the offer should
be valid for a period of at least 6 months from the date of dispatch of
securities.
✓ According to the guidelines, in case of the public issues, at least 30
mandatory collection centres should be established.
✓ According to the SEBI guidelines regarding rights issue, the Company
should give advertisements in not less than two news-papers about the
dispatch of letters of offer. No preferential allotment may be made along
with any rights issue.
✓ The Company should also disclose about the fee agreed between the lead
managers and the Company in the memorandum of understanding.

FUNCTIONS OF DECCAN MERCHANT BANK

❖ Consulting advice on going public and international business.


❖ Advice and help in taking your company public. If they are unwilling to supply Investment
Banking bridge loans, they have a low cost strategy for taking your company public.
❖ They do PIPE (Private Investment in Public Equities) financings.
❖ They can advise or help with a company’s M&A strategy.
❖ They are essential advisors for companies seeking to become multinational corporations

Corporate Counseling
Corporate counseling covers the entire field of merchant banking activities viz.
project counseling, capital restructuring, public issue management, loan
syndication, working capital, fixed deposit, lease financing acceptance credit, etc.
Merchant bankers also offer customized solutions to their client’s financial
problems.
Project Counseling
Project counseling includes preparation of project reports, deciding upon the
financing pattern to finance the cost of the project and appraising the project report
with the financial institutions or banks. It also includes filling up of application
forms with relevant information for obtaining funds from financial Institutions and
obtaining government approval.

Credit Syndication
Merchant bankers arrange to tie up loans for their clients. This takes place in a
series of steps. Firstly they analyses the pattern of the client’s cash flows, based on
which the terms of borrowings can be defined. Then the merchant banker prepares
a detailed loan memorandum, which is circulated to various banks and financial
institutions and they are invited to participate in the syndicate.

Issue Management and Underwriting


Management of issue involves marketing of corporate securities viz. equity shares,
preference shares and debentures or bonds by offering them to public. Merchant
banks act as an intermediary whose main job is to transfer capital from those who
own it to those who need it.

After taking action as per SEBI guidelines, the merchant banker arranges a meeting
with company representatives and advertising agents to finalize arrangements
relating to date of opening and closing of issue, registration of prospectus,
launching publicity campaign and fixing date of board meeting to approve and sign
prospectus and pass the necessary resolutions. Pricing of issues is done by the
companies in consultant with the merchant bankers.

Under writing of public issue


Underwriting is a guarantee given by the underwriter that in the event of under
subscription, the amount underwritten would be subscribed by him.
Banks/Merchant banking subsidiaries cannot underwrite more than 15% of any
issue.

Bankers to the Issue


The merchant banker can automatically become the banker to the issue in the
following cases:
The bank is a broker to the company
It has given underwriting commitments.
It acts as a manger to the issue
The function of a banker to the issue is to accept application forms from the public
together with subscription money and transfer them to the account of the
controlling branch.

Portfolio Management
Portfolio refers to investment in different kinds of securities such as shares,
debentures or bonds issued by different companies and government securities.
Portfolio management refers to maintaining proper combinations of securities in a
manner that they give maximum return

Advisory Services with minimum risk.Relating To Mergers and Takeovers

A merger is defined as a combination of two or more companies into a single


company where one services and other looses their corporate existence. A merger
is also defied as an amalgamation wherein the shareholders of the combining
companies become substantially the shareholders of the company formed.
A takeover is referred to as an acquisition, which is the purchase, by one company
of a controlling interest in the share capital of another existing company.
Merchant bankers are the middlemen settling negotiations between the offered and
the offeror. Their role is specific and specialized in handling the mergers and taker
over assignments. Being a professional expert, the merchant banker is apt to
safeguard the interest of the shareholders in both the companies and as such his
assistance is useful for both the companies, i.e. the acquirer as well as the acquired
company.
Based on the purpose of business objective, the search of the acquirer company
will start for a merger partner company. If the objective of merger is growth
oriented i.e. seeking expansion in production and market segments, utilization of
existing companies or optimum utilization of resources, then the acquirer company
will select a business related company as a merger partner.
If the objective is diversification in production line or business activities, then it
will select a non-related company as a merger partner.
Once the merger partner is proposed the merchant banker has to appraise the
merger/takeover proposal with respect to financial viability and technical
feasibility. He has to negotiate with the parties and decide the purchase
consideration and mode of payment. He has to comply with the legal formalities
like getting approval from the Government/ RBI; drafting the scheme of
amalgamation; getting approval of company Board, financial institution, high court
if required; arranging for the meeting etc.

Venture Capital Financing


Financing an emerging high-risk project is called venture capital financing. Many
merchant bankers are entering into this area by also financing viable upcoming
projects. The financing is by subscription to the equity capital, while repayment is
by selling the equity through stock market when the shares are listed.

Leasing
Is there another lucrative area of financing where merchant bankers are turning?
Leasing is a viable source of financing while acquiring capital assets. The services
include arrangement for lease finance facilities for leasing companies, legal;
documents and tax consultancy.

Non Resident Investment


To attract NRI investments in the primary and secondary markets, the merchant
bankers provide investment advisory services to the NRIs in terms of identification
of investment opportunities, selection of securities, portfolio management, etc. they
also take care of operational details like purchase and sale of securities securing the
necessary clearance from RBI under FERA for repatriation of dividends and
interest, etc.

Acceptance Credit and Bill Discounting


Though merchant bankers world over specialize in acceptance credit and bill
discounting, these services are not currently provided by merchant bankers in India
the principal reasoning being the lack of an active market for commercial bill
Arranging Offshore Finance
The merchant bankers help their clients in the following areas involving foreign
currency.
(a) Long term foreign currency loans
(b) Joint Ventures abroad
(c) Financing exports and imports
(d) Foreign collaboration arrangements

Management of Fixed Deposits of Companies


Recently, merchant’s bankers have begun to structure and mobilize fixed deposits
for their corporate clients. They take care of the procedural and legal aspects, and
also mange the collection and subsequent servicing of the deposits. Advice with
regard to the amount to be raised, interest charges, terms of deposits and other
related issues are also offered to the client.

Relief to Sick Industries


The services offered by merchant bankers to sick industries can be summarized as
follows:
1 Assessment of capital requirements and counseling on capital restructuring;
2 Appraisal of technological, environmental, financial and other factors
causing sickness;
3 Preparations of programs and packages for rehabilitation of sick units;
4 Providing necessary assistance where the rehabilitation package involves
mergers or amalgamation;
5 Obtaining necessary approval for implementation the rehabilitation package
from the statutory authorities;
6 Monitoring the implementation of the scheme of rehabilitation.

PROBLEMS OF DECCAN MERCHANT BANK:

Restriction of merchant banking activities:


SEBI guidelines have authorized merchant bankers to undertake issue
related activities and made them restrict their activities or think of
separating these activities from present one and float new subsidiary
and enlarge the scope of its activities.

Minimum net worth of Rs.1 crore:


SEBI guidelines stipulate that a minimum net worth of Rs.1 crore for
authorization of merchant bankers.

Non co-operation of issuing companies:


Non co-operation of the issuing companies in timely allotment of
securities and refund of application money is another problem faced
by merchant bankers.

Merchant Banker’s Commission:


Maximum :- 0.5%
Project appraisal fees
Lead Manager :-
- 0.5% up to Rs.25 crores
- 0.2% more in excess of Rs.25 crores
Underwriting fees
Brokerage commission :- 1.5%
Other expenses :-
- Advertising
- Printing
- Registrar’s expenses
- Stamp duty

In spite of problems popping up, merchant banking in India has vast scope to
develop because of lot of domestic as well as foreign businesses booming here.
Indian economy provides an amicable environment for these firms to set up,
flourish and expand here.