Market regulator Sebi today said its latest move to introduce no-frills demat accounts would help 50% of investors being able to transact without any account maintenance charges.
Sebi chief U K Sinha also said its proposal to enable investors use credit and debit cards, ATMs and mobile banking facilities for making payments in Initial Public Offers (IPOs), would need some consultations with the RBI.
"This is something which needs consultation with the Reserve Bank of India as they are the banking regulator. We have already taken steps like e-IPO for simplifying the IPO process. This (use of credit or debit card in IPO process) is the next step," Sinha told reporters.
These steps are being undertaken by Sebi with an aim to attract more and more people to the market and form part of an extensive primary market reform process.
Speaking on the sidelines of a CAMS event here, Sinha also said that 50% of the demat account holders would not have to pay any charge and 10% would have to pay a very small charge after the introduction of Basic Service Demat Accounts.
With an aim to encourage an investment culture in the country, Sebi yesterday announced no-frills or basic trading accounts for retail individual investors with no charges applicable for holdings up to Rs 50,000.
The investors can hold securities worth up to Rs two lakh in these no-frills accounts, to be called Basic Services Demat Account (BSDA), but the charges would be capped at a maximum of Rs 100 a year for funds exceeding Rs 50,000.
As per estimates, the new demat accounts would cover about 60% of total investor base in the country.
Regarding the plan to have single Know Your Customer (KYC) norms for all financial products such as insurance offerings, Sinha said that Sebi has initiated consultation with all regulators from other industries on the matter.
"The government has set up a committee. The government is in favour of that. But, it will take some more time," he said.
Common KYC norms would save investors the hassle of filing up multiple forms and satisfying different requirements framed by different financial sector regulators.
