In a reprieve for HDFC Bank, Securities and Exchange Board of India (Sebi) today allowed the bank to open new demat accounts saying there was no need to continue its earlier directions that barred the bank from opening new accounts.The bank was stopped from opening fresh demat accounts by Sebi in its interim order in the initial public offering (IPO) scam in April. In an order today, Sebi whole-time member Dr T C Nair said: " I hereby direct that there is no need to continue the directions issued to HDFC Bank not to open fresh demat accounts."He, however, clarified that the "present order gives only a prima-facie finding as to the necessity of interim directions at this stage, and accordingly all issues and contentions are left open to be considered by the enquiry officer and to be decided in subsequent proceedings consistent to his report."Sebi had barred HDFC Bank for alleged violation of know your clients (KYC) norms while allowing clients to open multiple demat accounts. The regulator had found that 10,213 demat accounts were opened with a common address raising concern over the genuineness of the account holders.In its submission before Sebi, HDFC Bank had pointed out that out of the total alleged 10,213 multiple accounts with common addresses, over 4,800 accounts were opened by employees or ex-employees of corporate houses where the address of the corporate houses had been provided as the correspondence address.
