Banker to an issue

Scheduled banks play a vital role in the financial system, providing a wide range of services to individuals and businesses. One important aspect of their operations is their involvement in issue-related activities.

Acceptance of Application and Application Monies

Scheduled banks act as intermediaries in the process of issuing securities, such as shares or debentures. They play a crucial role in accepting applications and the accompanying application monies from investors. This involves collecting and verifying the necessary documents, including application forms and Know Your Customer (KYC) details. By accepting these applications, banks facilitate the smooth functioning of the issuance process.

Acceptance of Allotment or Call Monies

After the applications are processed, the issuing company allots shares or debentures to the investors. Scheduled banks are responsible for accepting the allotment or call monies, which are the subsequent payments made by the investors. This process ensures that the issuing company receives the required funds from the investors according to the terms of the offering. Banks play a crucial role in streamlining these transactions, ensuring transparency and efficiency.

Refund of Application Monies

In certain cases, investors may choose to withdraw their application before the allotment is finalized. Scheduled banks handle the refund process by returning the application monies to the investors. This involves thorough verification and adherence to regulatory guidelines to ensure that the refund is processed accurately and promptly. The banks act as custodians of the investors’ funds, safeguarding their interests throughout the refund process.

Payment of Dividend or Interest Warrants

Once the securities are allotted, companies may distribute dividends to shareholders or pay interest to debenture holders. Scheduled banks play a crucial role in facilitating these payments by issuing dividend or interest warrants. These warrants are financial instruments that represent the entitlement of the shareholders or debenture holders to receive their respective payments. Banks ensure the secure and timely distribution of these warrants to the investors, enhancing investor confidence and trust in the system.