SEBI might well simply delivery one extra avenue for retail investor to pick out shares in IPOs


The aim is to ease the bother all for subscribing for recent share gross sales and enable merchants in smaller cities and towns to pick out stock

June 09, 2021 / 05: 58 PM IST

India’s capital markets regulator might well simply delivery one extra avenue for particular particular person merchants to pay for shares offered in initial public choices (IPOs) by permitting payments banks to accept money from IPO candidates.

Funds bank attain most banking operations, accepting diminutive deposits and providing remittance companies and products, safe banking and fund transfer facilities, but are no longer allowed to rob in change that entail credit ranking threat, cherish giving loans or issuing bank cards. Additionally they don't seem like allowed to accept IPO subscriptions.

To ease the bother all for subscribing for recent share gross sales and enable merchants in smaller cities and towns to pick out stock, the Securities and Commerce Board of India (SEBI) is in talks with the central bank and price banks, which own requested the market regulator to enable them to accept IPO capabilities, treating them on par with commercial banks, extra than one people responsive to the topic said.

“If the regulator enables price banks to rob investor money, then it would be valuable for retail merchants, who can without problems fabricate payments from their apps. Now, app-based mostly mostly price reach is a lot elevated in Tier 2 or Tier 3 cities,” one particular person conclude to the event said, soliciting for anonymity.

SEBI and a few price banks that Moneycontrol reached out to, did no longer answer to inquire of of for comments.

Six price banks are active in India: Airtel Price Bank, India Post Price Bank, Fino Price Bank, Jio Funds Bank, Paytm Price Bank and NSDL Price Bank. NSDL is brief for National Securities Depository Ltd.

“Sebi is in dialogue with Reserve Bank of India, which is the only real regulator of this price banks,” a 2nd particular person conclude to the event told Moneycontrol.

A 3rd particular person said handiest after the Reserve Bank of India clears the transfer would SEBI enable price banks to take part in the IPO job.

Price banks are allowed to accept deposits of as a lot as Rs 2 lakh – a restrict that will well simply even be applied to them accepting capabilities for share purchases in IPOs.

With attain from 1 January 2019, SEBI made the consume of the Unified Funds Interface (UPI) compulsory for particular particular person merchants applying to salvage to Rs 2 lakh of shares in IPOs by customary intermediaries.

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