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Mumbai, Aug 28 Three banks — Corporation bank, Union Bank of India and HDFC bank — have received SEBI nod for offering the new payment facility for IPOs under SEBI’s new scheme where investor application money will not be blocked with the IPO issuer till allotment. It also does away with the refund process.

These three banks can now be part of the Applications Supported by Blocked Amount (ASBA) process.

This process allows for a new mode of payment in IPOs wherein the application money of an investor will remain in an account until the allotment process. After the shares are allotted, only the amount of money required for payment for the allotted number of shares will be debited from the applicants’ accounts. These three banks are eligible to act as Self Certified Syndicate Banks (SCBS) in public issues which open on or after September 1, said a release issued by SEBI today. The respective banks have also announced the select bank branches where this facility will be available from September 1, 2008.

More Stories on : Regulatory Bodies & Rulings | Public Sector Banks | IPOs

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