1. Issue Management 2. Portfolio Management 3. Loan/Lease Syndication 4.

Corporate
Counselling 5. Arranging Foreign Collaboration 6. Advising on Acquision or Mergers 7.
Project Counselling 8. Advising on Capital Restricting.
Fee Based Activity: Type # 1. Issue Management:
Like ordinary issue, the process of issue management is same. It is, however, the duty of the
Non-Banking Financial Company to supply a complete set of services and must try to improve
and develop the process of marking the issues by which the net work of the promoters will be
extended.

It is needless to say that the institutions who will take the responsibility to supply the services,
must be able to improve the network of the brokers which ultimately brings a success relating to
the issue.

If the issues are not subscribed the same may be closed on the earliest closing date. In order to
overcome this difficulty, these companies join with others and form a club taking 5 to 10
merchant bankers (those who are authorised) who must take a minimum corpus of funds.

Now, if the issue goes in the hands of the club, there will be, no doubt, hesitation on the part of
anyone regarding the investment in the issue having a public support and as such, the issue
closes at the earliest closing date which relieves the promoters regarding the issue.

As a result of the above, the merchant bankers and the Non-Banking Financial Companies
(NBFCs) will earn a reputation in the market by which they can promote many businesses.
NBFC, to some extent will capture and curtail the business that flows to the institutions
belonging to the state level.

Once the technique becomes successful the club can be extended to 10 or more i.e., instead of
acting as competitors among themselves, the sharing of income in the form of fees as a result of
the close co-ordination becomes more profitable and rewarding as well.

In future, they can easily form a group and the regional guilds in order to supply the services
more effectively and efficiently as well which will be a blessing to the business world.

Fee Based Activity: Type # 2. Portfolio Management:

Portfolio management implies the investment of funds taken from numbers/clients in various
securities and an adequate return should be given to them. In other words, it is a scheme by
which the portfolio manager raise funds from his clients/members with a commitment in order to
operate the securities market together with the information, in well explained terms relating to
the composition of portfolio, annual return, appropriation of capital, the extent of risk etc.

The manager must be authorised by the Securities and Exchange Board of India positively.
Before certifying a manager as authorised, the SEBI will enquire about the infrastructure and
truck record of the firm For this purpose, a minimum amount of net worth/shareholders’ fund has
been fixed at Rs. 50 lakhs.
It is the duty of the portfolio manager to maintain the funds which belong to his clients/ members
with the schedule bank in a separate account, which will be invested according to the terms
specified. The manager is, however, entitled to a fixed fee and not a variable one depending upon
the returns to the clients/members accordingly.

It is also the duty of the NBFCs to see that guidelines that are laid down by the RBI relating to
the restrictions on announcement of guaranteed returns, are followed properly in addition to the
other guidelines.

The NBFCs may adopt the approach of investing in the debentures of good companies and a
particular proportion should be invested in shares through the primary market route and the
balance amount of the fund, should be invested in the secondary market.

Fee Based Activity: Type # 3. Loan/Lease Syndication:

The practising Chartered Accountants who supply the liaison services to the clients where they
are in need of funds whether for the purpose of working capital or for term loan purposes.

At present, it has been found that the Chartered Accountant firms are keen interested to keep in
touch with the large group of companies and are trying to improve their contact with others with
the help of such giant clients who are doing quite successful business.

When a company finds it difficult to procure funds who has some problems, weakness and is not
able to get various services, these firms appear in the picture and act as an intermediary between
the institution and the company as well In this particular case, NBFC, can play a very prominent
role for procuring funds and assist them in various ways, can supply the necessary services for
those clients.

They can act as a broker and their fees must be comparable with the fees charged by the
Chattered Accountant firms. In order to serve these services, NBCFs should have a direct contact
with the high officials of the banks and various financial institutions simply in order to collect
the necessary information.

In fact, when the company will be able to know the rules, regulations, procedures of the financial
institutions and-its proper operation and will grow its contact, its requirements will be fulfilled
very soon.

About leasing, however, it becomes necessary to collect a list of institutions/companies who are
engaged with leasing business along with their respective quotation which will assist the
company to evaluate the offers received by it in near future.

It is to be noted that many companies are engaged with leasing business usually in the 2nd half
of the year and deal in 100% depreciable items which is, rather, considered as their primary
objectives.

Thus, any information about them can easily be collected by the company and it can make
necessary arrangement for the clients particularly who can pay the rent as soon as it becomes
due. In this way NBFCs, can help a lot which may be considered as their moral duty which will
prove worth in future. For this services the NBFCs can charge a fee which must not exceed 5%
of the funds being a fee based activity.

Fee Based Activity: Type # 4. Corporate Counselling:

The corporate counselling is an another attractive fee based service. At the time of
diversification, expansion and development, a medium size company needs the service of an
expert relating to the above for which they seek the advice from various institutions. The
institutions also come forward to assist them as soon as they receive the formal request from
such firms.

Now, in this context the role of NBFCs is very important. They can perform various functions
relating to the generation of funds by developing the existing systems and pointing out the weak
areas of the companies.

Usually, the company receives the services either from an individual who is an expert in this line
or from the firm of Chartered Accountants who possess the latest data relating to financial
information although their area of services is to some extent limited.

In other words, they can supply the information and necessary data which they have collected
from their clients in the past and can apply only the same and particularly, beyond this level, they
are helpless. For example, if a company wants to invest a greater amount of funds in a capital
project, which requires the services of capital budgeting and as such, can eliminate the various
projects which are less profitable.

This sort of information is readily available with them. So, a company who is going to take an
extension programme, it can have the readymade information relating to the various attractive
projects. On the basis of such data and necessary information, it can suggest a few concrete
propositions which may be proved worth.

Moreover, these brokers and brokerage firms under the NBFCs group possess the old data and
information that they collect from the Government publication which may not have any
relevance to the present day economic condition and changing circumstance of the society.

However, the corporate counselling requires every aspect of the project in details. That is why, a
company which is specialised on a particular line, e.g., product selection, must be able to supply
the necessary related information about the utility of the product, its various cost structure,
market competition etc.

In short, it is practically impossible for a single company to maintain all the data relating to
various kinds of products.

They should, of course, have a close contact with other NBFCs who are related in that particular
line. In short, a company should not change its position. Needless to mention here that the
various institutions are not able to supply this sort of services to the clients concerned.
Thus, NBFCs should enquire about it very carefully and at least one or two areas of
specialisation must be selected by it and to maintain a close contact with other for other
necessary information and data which are also very important in order to serve them better.

Fee Based Activity: Type # 5. Arranging the Foreign Collaboration:

It is one of the most significant tasks of the project management and the companies to arrange
the foreign collaboration particularly who wants to specialise in the above area and should
consider the matter carefully.

As a result of the liberalisation relating to industry and capital market by the Government of
India, the companies are employing their resources which they acquire by issuing shares via
primary capital route and as such, are interested for good projects relating to either export
oriented project or import substitution projects.

Needless to mention here that the companies need technical know-how for both the types of
project from the suppliers who supply overseas technology. NBFCs should collect the necessary
information about it.

It may also be mentioned here that it is impossible for companies to maintain the data for all
kinds of industries, rather they should have specialized either one or two types of industries in
the beginning and if possible gradually to maintain the data relating to suppliers of foreign
technology.

However, NBFC must contain such data and keep the information relating to the latest
technology from them who have already acquired earlier along with the result. Details of the
similar technology, if any, may be taken into consideration along with their particulars.

Moreover, necessary information relating to the fees, mode of settlement and remittance of such
fees or royalties, together with the various rules and regulations relating to them, should be
collected