Markets regulator Sebi is in discussion with NPCI and others to develop an alternate payment mechanism, which could enhance the efficiency in payment system and reduce the listing time, Parliament was informed today.
"An efficient payments mechanism has the potential to reduce the time and cost associated with public issue and reduce the market risk for shareholders by allowing unblocking of capital," Minister of State for Finance Pon Radhakrishnan said in a written reply to the Lok Sabha.
The Securities and Exchange Board of India (Sebi) has already reduced the IPO listing time from the seven days in the past to six days after the close of the bidding.
"At present Sebi is undertaking discussions with national Payments Corporation of India (NPCI) and other intermediaries associated with IPO process to assess the feasibility of developing an alternate payment mechanism, which building upon the ASBA mechanism, could enhance the process efficiency in payment system and may curtail the post issue timeline for listing from existing six days," the minister added.
Earlier, the regulator had ended the practice of allowing the issuer to block the entire subscription amount in demat accounts by allowing the money to be blocked in the investors account through the applications supported by blocked amount (ASBA) facility.
This helped not blocking the investor's money in a third party account till the IPO process was over.
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