Regulatory Thresholds and Caps in India

A “promissory note” is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money to, or to the order of, a certain person, or only to bearer of the instrument. Option (3) satisfies all the conditions of a promissory note.

There is no limitation in the Comapnies Act,2013 on the amount maximum amount of premium on issue of shares. For example, a company in its growth stage enjoying a very good market reputation and making high profits can issue a share of Face Value of rs 10 at a premium of Rs. 990.

For equity mutual funds with annual assets up to Rs.1,000 crore, SEBI permits maximum recurring expenses of 2.25% of average annual assets. Therefore, 2.25% of Rs.1,000 crore equals Rs.22.5 crore. Option B (Rs.20.50 crore) appears to reflect the 2.05% rate which was applicable under earlier regulations. This represents the maximum allowed, not actual expenses. The other options don't align with SEBI's expense ratio limits.

For closed-end funds, SEBI permits investment and advisory fees up to 1.125% of average weekly net assets. With Rs.200 crore average weekly net assets, 1.125% equals Rs.2.25 crore. This is lower than the 2.25% allowed for open-ended schemes because closed-end funds have fixed capital. The fee structure recognizes that closed-end funds don't have ongoing redemption pressures.

As per SEBI regulations, mutual funds can recover initial issue expenses up to a maximum of 6% of the amount mobilized during the NFO period. This is amortized over the scheme's life. Options A, B, and D are incorrect. The 6% limit is fixed regardless of the actual mobilized amount. This expense cap protects investors from excessive fundraising costs.

Mutual fund regulations in India allow a maximum of three joint holders for a mutual fund folio. This includes the primary holder plus two additional joint holders. This limitation is in place to ensure clarity in ownership and facilitate smooth operations.

With NAV of Rs.50 and maximum entry load of 7%, the calculation is 50 × 0.07 = Rs.3.50. This represents the highest charge an investor could pay at entry under historical SEBI norms.

SEBI mandates that an Asset Management Company (AMC) must maintain a minimum net worth of Rs. 10 crores at all times. This capital adequacy requirement ensures financial stability and operational capacity. The requirement is continuous - not just at inception - and Rs. 10 crores is the regulatory floor, not Rs. 100 crores or a variable amount.

SEBI (Securities and Exchange Board of India) is the regulatory authority that sets limits on maximum entry and exit loads that mutual funds can charge. AMCs (Asset Management Companies) manage the funds, AMFI is the industry association, and agents sell funds - none of these determine load limits.

Basic investment = 100 units × Rs. 20 NAV = Rs. 2000. Entry load of 1.5% is calculated on this amount: 2000 × 0.015 = Rs. 30. Total amount required = Rs. 2000 + Rs. 30 = Rs. 2030.

RBI mandates that non-bank White Label ATM Operators (WLAO) must maintain a minimum net worth of Rs. 100 crore to ensure financial stability and operational capability. This requirement safeguards ATM network reliability and protects customer interests.

RBI permits banks to grant loans against dematerialized shares up to a maximum of Rs. 20 lakh per individual borrower. This limit exists to control risk exposure from pledged securities while allowing retail investors to access liquidity from their shareholdings.

Under the MSME (Micro, Small and Medium Enterprises) classification in India, manufacturing enterprises with investment in plant and machinery between 1 crore and 10 crore rupees are categorized as Medium Enterprises. This classification framework helps determine eligibility for various government benefits and priority sector lending. The current definition follows the MSMED Act, 2006.