SEBI Merchant Banker Rules: Net Worth, Revenue and NISM Mandates
Why in the news
SEBI toughened merchant banking rules from 3 January 2026 to weed out dormant firms and lower systemic risk.
Key facts
- Regulated by SEBI under the SEBI (Merchant Bankers) Regulations.
- Underwriting exposure is limited to 20x liquid net worth.
Net worth requirements
| Category | Phase I (Jan 2027) | Phase II (Jan 2028) |
|---|---|---|
| Category I | Net worth ₹25 crore; liquid net worth ₹6.25 crore | Net worth ₹50 crore; liquid net worth ₹12.5 crore |
| Category II | Net worth ₹7.5 crore; liquid net worth ₹1.87 crore | Net worth ₹10 crore; liquid net worth ₹2.5 crore |
- Missing Category I standards means demotion to Category II; missing Category II bars new issues.
Revenue mandate
- Category I: ₹25 crore across a rolling three years.
- Category II: ₹5 crore.
- Enforced from April 2029, with relief for pandemics or global recessions.
Staffing and governance
- NISM Series-IX Merchant Banking Certification is compulsory for all employees.
- Existing staff by 2 January 2027; new joiners within 90 days.
- Core activities cannot be outsourced beyond 90 days from 3 April 2026.
Exam angle
- Effective 3 January 2026; certification: NISM Series-IX.