Markets regulator Sebi on Tuesday introduced additional payment mechanism, including ASBA, for making subscription and payment of balance money for calls in respect of partly paid securities issued by listed entities.
The decision has been taken as payment through Application Supported by Blocked Amount (ASBA) mechanism is investor friendly and enables faster completion of the process, Sebi said in a circular.
A call, in market parlance, is a demand made by the company on its shareholders to pay whole or part of the balance remaining unpaid on each share at any time during the life time of a company.
"It has been decided to introduce additional payment mechanism (i.e. ASBA, etc) for making subscription and/or payment of calls in respect of partly paid specified securities through SCSBs and intermediaries such as trading members/ brokers - having three in one type account and Registrar and Transfer agents (RTA)," Sebi said.
The additional payment methods provided by Sebi are online as well as physical ASBA and the facility of linked online trading, demat and bank account (three-in-one type) account offered by some brokers.
Investors can apply through an online portal of the self-certified syndicate banks (SCSBs) or physically submit application at the branch of a SCSB.
The SCSBs would then send the application to RTA and block funds in shareholders accounts.
Sebi said payment period for payment of balance money in calls will be kept open for 15 days.
It, further, said intermediaries including the issuer company and its RTA would provide necessary guidance to the specified security holders in use of ASBA mechanism while making payment of calls.
This circular will be applicable for all call money notice wherein the payment period opens on or after January 1, 2020.
To protect investors' interest and reduce investor grievances relating to refund, Sebi had introduced ASBA as the sole payment mechanism in the IPO and rights issues.