Merchant bankers can't undertake any other business, says Sebi

A merchant banker cannot carry on any business other than those pertaining to the securities market, according to the capital markets regulator Sebi.

Providing an informal guidance in this regard to PNB Investment Services, an arm of Punjab National Bank (PNB), the Securities and Exchange Board of India (Sebi) indicated that its views might differ on a case-to-case basis.

The clarification came after PNB Investment Services, which is registered as a merchant banker, sought informal guidance on whether it can act as a direct selling agent by starting a fresh business vertical for marketing retail products such as home loans, car loans on behalf of PNB or other banks.

The applicant was intending to venture into another activity to act as a direct selling agent for PNB and other banks for canvassing the retail customers for generation of leads and conversion of prospects into customers.

After looking into submissions, Sebi said, "since referral activities for non-security related ...