Section 7 in Securities and Exchange Board of India (Custodian) Regulations, 1996
7. Capital requirement.
(1)The capital requirement referred to in clause (a) of sub-regulation (1) of regulation 6 shall be a net worth of a minimum of rupees fifty crores.Explanation.- For the purposes of this regulation, the expression "net worth" means the paid-up capital and the free reserves as on the date of the application.(2)Notwithstanding anything contained in sub-regulation (1) any [custodian] [Substituted 'custodian of securities' by Notification No. SEBI/LAD-NRO/GN/2019/01, dated 1.1.2019 (w.e.f. 16.5.1996).] which:(a)has been approved by the Board under the provisions of Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, or the Government of India Guidelines for Foreign Institutional Investors dated September 14, 1992, even if it does not have the net worth specified in sub-regulation (1) may continue to function as a [custodian] [Substituted 'custodian of securities' by Notification No. SEBI/LAD-NRO/GN/2019/01, dated 1.1.2019 (w.e.f. 16.5.1996).] and shall within a period of one year from the date of commencement of these regulations raise its net worth to that specified in sub-regulation (1);[Provided that the period specified above may be extended by the Board upto a maximum of 5 years;] [Inserted by S.O. 851(E), dated 4.12.1996 (w.e.f. 16.5.1996).](b)has made an application under regulation 3 shall be permitted to fulfil his capital adequacy requirements within one month of the receipt of certificate under regulation 8.
