Digital payments: Sebi bars stock brokers from accepting cash from clients

Sebi on Thursday barred stock brokers from directly accepting cash from their clients as it looks to promote digital payments.

Besides, stock brokers are not permitted to receive cash deposits in their bank accounts from clients.

"In view of the various modes of payment through electronic means available today, it is directed that stock brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker," the regulator said in a circular.

According to Sebi, all payments would be received or made by stock brokers from/ to the clients strictly by account payee crossed cheques or demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India (RBI).

"The stock brokers would accept cheques drawn only by the clients and also issue cheques in favour of the clients only, for their transactions. Stock Brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker," it added.

Also, the government has been promoting various means for transfer or receipt of funds through digital mode for encouraging a cashless economy.

Financial institutions and banks have introduced various modes of electronic payment facility including mobile banking, Unified Payment Interface (UPI) etc.