sebi:Order/SS/RK/2023-24/29909

SEBI · SEBI · 2023-09-12 · Santosh Kumar Sharma, Adjudicating Officer

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Facts / Headnote

Adjudication proceedings disposed of without any penalty

Provisions invoked

• s. 15
• s. 12(1)
• s. 15H
• s. 15J

Regulations

• Reg. 3(1)

Parties

• Tamilnad Mercantile Bank

Holding

The Noticee (Tamilnad Mercantile Bank) was found not to be in violation of Section 12(1) of the SEBI Act and Regulation 3(1) of the Banker to an Issue Regulations, and the adjudication proceedings were disposed of without any penalty.

Full text

Adjudication order in the matter of Tamilnad Mercantile Bank . Page 2 of 10 APPOINTMENT OF ADJUDICATING OFFICER 2. In this regard, SEBI initiated Adjudication Proceedings against the Noticee and appointed Shri Santosh Kumar Sharma as the Adjudicating Officer (AO) vide order dated September 12, 2023, communicated vide communique dated November 06, 2023 under Section 15-I of the SEBI Act, 1992 read with Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under Section 15HB of the SEBI Act, 1992 for the aforesaid violation alleged to have been committed by the Noticee as specified in the Show Cause Notice (SCN).

Adjudication order in the matter of Tamilnad Mercantile Bank . Page 3 of 10 served through email. The said hearing was attended to by employee of the Noticee in the echelon of the Deputy General Manager (DGM). The said employee reiterated the submissions made vide its letter dated November 29, 2023. Further, Noticee made additional submission in the matter vide email dated December 06, 2023. The reply submitted by the said Noticee vide its letter dated November 29, 2023 and December 06, 2023 is mentioned as under:  As per the Certificate of Registration issued by Securities and Exchange Board of India (SEBI) dated 22nd December 1994, our Bank was permitted to do transactions under “Banker to an Issue” privilege, for the period from 16th November 1994 to 15th November 1997. Our registration code for the Banker to an Issue (BTI) is INBI00000013. Subsequently, the BTI certificate was renewed once in three years, till the validity period up to 28th August 2013. Afterwards, we have inadvertently not renewed the BTI registration certificate.  During January 2023, our Bank had applied for grant of Bank’s UPI handle which could be used as a payment mechanism during public and rights issue. For considering the request, we were asked to submit the BTI registration details on 09.01.2023. We informed that we did not have our BTI registration renewed. Subsequently, on 13.01.2023, we were informed by SEBI that the Bank cannot be Self-Certified Syndicate Bank (SCSB), unless we are registe

Adjudication order in the matter of Tamilnad Mercantile Bank . Page 4 of 10 Subsequently additional documents and declarations were sought by SEBI on 25.01.2023. Further,were instructed to remit the renewal fee for the entire period starting from 28.08.2013. We received the confirmation mail from SEBI for the renewal of the certification as BTI with registration No.INBI00001276 with effect from 14.06.2023.  Now, we have paid the fee for the entire break period of renewal from 28.08.2013 with retrospective effect for the period of 12 years in 4 blocks valid until 28.08.2025 we have also paid the registration fee to continue as BTI. We have now complied with all other guidelines by SEBI for acting as SCSB to process the ASBA applications  We have handled 1069 number of ASBA functions during the period from 29.08.2013 to 13.06.2023, other than that we have not carried out any of the Merchant Banking activities during that period.  Considering our unblemished conduct with regard to the depository participant operations for ASBA applications, we request your good office to condone our omission in renewal of the BTI certificate as a special case.  The bank has not carried out any business as Banker to an Issue during the period from 29.08.2013 to 13.06.2023.  Our banks’ name is appearing name is appearing in the list of SCSBs in SEBI website and that it had been offering ASBA services to its customers as the same was being allowed by SEBI in the absence of a mechanism to link,

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