The Securities and Exchange Board of India (Bankers to an issue) Rules, 1994 defines the term, "Banker to an Issue" as:

"Banker to an Issue"
means a scheduled bank carrying on all or any of the following issue related activities namely:-

1. acceptance of application and application monies;

2. acceptance of allotment or call monies;

3. refund of application monies;

4. payment of dividend or interest warrants.<>/P>

As per Rule 3 of the Rules- "No person shall carry on any activity as a banker to an issue unless he holds a certificate granted by the Board under the regulations"

The Board may grant or renew a certificate to a banker to an issue subject to the following conditions, namely:-

1. he shall enter into a legally binding agreement with the body corporate for or on whose behalf he is acting as banker to an issue stating therein the duties and responsibilities between himself and the body corporate for the issue for which he is acting as a banker to an issue

2. he shall pay the amount of fees for registration in the manner provided in the regulations;

3. he shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaints and he shall keep the Board informed about the number, nature and other particulars of the complaints received and the manner in which such complaints have been redressed, and

4. the certificate granted shall be valid for a period of three years from the date of the grant of the same.

The Securities and Exchange Board of India (Bankers to an issue) Rules, 1994 are supplemented by Securities and Exchange Board of India (Bankers to An Issue) Regulations, 1994

An application by a scheduled bank for grant of a certificate as a banker to an issue shall be made to the Board in Form A.

The Board shall take into account for considering the grant of a certificate, all matters which are relevant to the activities relating to banker to an issue and in particular whether the applicant fulfils the following requirements, namely:-

1. the applicant has the necessary infrastructure, communication and data processing facilities and manpower to effectively discharge his activities;

2. the applicant or any of its director is not involved in any litigation connected with the securities market and which has an adverse bearing on the business of the applicant or has not been convicted of any economic offence;

3. the applicant is a scheduled bank;

   (cc) the applicant is a fit and proper person.

4. grant of certificate to the applicant is in the interest of investors.

Every applicant eligible for grant of a certificate shall pay fees in such a manner and within the period specified in Schedule II to the Regulations.

12. (1) Every banker to an issue shall maintain the following records with respect to:-

1. the number of applications received, the names of the investors, the dates on which the applications were received and the amounts so received from the investors;

2. the time within which the applications received from the investors were forwarded to the body corporate or registrar to an issue as the case may be;

3. the dates and amount of refund monies paid to the investors;

4. dates, names and amount of dividend/interest warrant paid to the investors.

13. Every banker to an issue shall furnish to the Board when required the following information, namely:-

1. the number of issues for which he was engaged as banker to an issue;

2. the number of applications and the details of the application monies received by the banker to an issue;

3. the dates on which applications received from the investors were forwarded to the body corporate or registered to an issue;

4. the dates on which and the amount refunded to the investors;

5. the payment of dividend or interest warrants to the investors.

14. (1) Every banker to an issue shall enter into an agreement with the body corporate for whom it is acting as banker to an issue.

(2) The agreement referred to in sub-regulation (1) shall contain the following clauses namely:-

1. the number of centres at which the application and the application monies of an issue of a body corporate will be collected from the investors;

2. the time within which the statements regarding the applications and the application monies received from the investors investing in an issue of a body corporate will be forwarded to the registrar to an issue or the body corporate, as the case may be;

3. that a daily statement will be sent by the designated controlling branch of the bankers to the issue to the registrar to an issue indicating the number of applications received on that date from the investors investing in the issue of a body corporate and the amount of application money received.

15. Every banker to an issue shall inform the Board forthwith, if any disciplinary action is taken by the Reserve Bank against the banker to the issue only in relation to issue payment work;

Provided that if as a result of any such action, the banker to an issue is prohibited from carrying on the activities, the certificate shall be deemed to have been suspended or cancelled as the case may be

Every banker to an issue shall inform the Board forthwith, if any disciplinary action is taken by the Reserve Bank against the banker to the issue only in relation to issue payment work;

Provided that if as a result of any such action, the banker to an issue is prohibited from carrying on the activities, the certificate shall be deemed to have been suspended or cancelled as the case may be (Regulation 16).

Regulation16(1)

1. Every banker to an issuer shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions, etc., issued by the Board or the Central Government and for redressal of investor's grievances.

2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him.

1. Powers & Procedure for Inspection - Chapter IV

2. Procedure for Action in Case of Default - Chapter V

1. A banker to an issue shall in the conduct of his business, observe high standards of integrity and fairness in all his dealings with his clients, the investors and/or other members of his profession.

2. A banker to an issue shall exercise due diligence, ensure proper care. A banker to an issue shall not make any statement or become privy to any act, practice or unfair competition, which is likely to be harmful to the interests of other bankers to an issue or is likely to place such other bankers to an issue in a disadvantageous position in relation to the banker to the issue, while competing for or executing any assignment.

3. A banker to an issue shall not make any exaggerated statement, whether oral or written to the client, either about the qualification or the capability to render certain services or his achievements in regard to services rendered to other clients.

4. A banker to an issue shall always endeavour to-

   1. render the best possible advice to the clients having regard to the clients' needs and the environments and his own professional skill; and

   2. ensure that all professional dealings are effected in a prompt, efficient and cost effective manner.

5. A banker to an issue shall not divulge to other clients, the press or any other party any confidential information about his client, which has come to his knowledge.

6. A banker to an issue shall not -

   1. allow blank application forms bearing brokers stamp to be kept at the bank premises or peddled anywhere near the entrance of the premises.

   2. accept applications after office hours or after the date of closure of the issue or on bank holidays.

7. A banker to an issue shall not at any time act in collusion with other agents in a manner that is detrimental to the smaller investor.

A banker to an Issue shall abide by the provisions of such Acts, Rules, Regulations, Guidelines, resolutions, Notifications, directions, circulars and instructions as may be issued from time to time by the Central Government, the Reserve Bank of India, the Indian Banks Association or teh Board and as may be applicable and relevant to the activities carried on by the Banker to the Issue.

8. (a) A banker to an issue shall abide by the provisions of such Acts and rules, regulations, guidelines, resolutions, notifications, directions, circulars and instructions as may be issued from time to time by the Central Government, the Reserve Bank of India, the Indian Banks Association or the Board and as may be applicable and relevant to the activities carried on by the banker to the issue.