Can an NBFC function as a Merchant Banker? Under what circumstances a merchant banker shall be deemed to be an associate of the issuer?

Can an NBFC function as a Merchant Banker? No, an NBFC (Non-Banking Financial Company) cannot function as a merchant banker. Regulation 6 of the SEBI (Merchant Bankers) Regulations, 1992 states that the applicant shall be a body corporate other than a non-banking financial company as defined under clause (f) of section 45-I of the Reserve Bank of India Act, 1934. However, a Merchant Banker who has been granted registration by the Reserve Bank of India to act as a primary or satellite dealer may carry on such activity subject to the condition that it shall not accept or hold public deposit. Circumstances where a merchant banker shall be deemed to be an associate of the issuer: Regulation 21A of the SEBI (Merchant Bankers) Regulations, 1992 provides that a merchant banker shall not lead manage any issue or be associated with any activity undertaken under any regulations made by SEBI, if he is a promoter or a director or an associate of the issuer of securities or of any person making an offer to sell or purchase securities. However, a merchant banker who is an associate of such issuer or person may be appointed, if he is involved only in the marketing of the issue or offer. A merchant banker shall be deemed to be an "associate of the issuer or person" if: Either of them controls, directly or indirectly through its subsidiary or holding company, not less than 15% of the voting rights in the other; or Either of them, directly or indirectly, by itself or in combination with other persons, exercises control over the other; or There is a common director, excluding nominee director, amongst the issuer, its subsidiary or holding company and the merchant banker.